It has been clear to many analysts (including myself) for years that publishers of academic journals were facing the slow death of their business. Despite the view of publishers and the more optimistic analysts that peer reviews journals were irreplaceable, the evidence continues to emerge for a slow, but certain, decline.
The latest is this study , which is nicely summarised by economist Danni Rodrik. What matters most to academics is improving their reputation, on which grants, status and promotions depend. This is most commonly measured by citations of their papers by others, although output in terms of the number of papers they publish also matters.
The problem (for the publishers) is that academics can use the internet to disseminate a paper. This gives it a good chance of being cited, regardless of where it is publsihed. This means that publishing in a top journal matters.
Academics had a strong motive for publishing in the journals with the strongest reputations, because they the most widely read. However they were widely read because they attracted the best papers. A powerful barrier to entry, that gave publishers apparently ever increasing margins.
Now, if it no longer matters so much where papers are published (at least for academics from universities with strong reputations), then it will become easy to established journals, and perhaps journals may disappear altogether. There go the high margins, and probably the revenues as well.
Added 27th July 2007: The importance of this is that it does not require the replacement of existing journals with new channels for the publishers to have serious problems. We can now see and intermediate step, allowing lesser known journals can complete on more equal terms. This will both depress margins in itself and ease the transition to a completely new way of doing things.
Given the academics aim is to disseminate their research as widely as possible, and given their sources of funding, the likely eventual outcome is likely to be that open access will become the norm. I have blogged on the benefits for academics and society before. As for the publishers … bye, bye, it was nice knowing you.