Academic publishing viable in Australia?

From "The end of the paper trail", Rosemary Neill, The Australian, December 09, 2006:

"CAROLYN Leach-Paholski was tickled pink when her first novel was accepted by academic publishing house Pandanus Books. ... Just days after The Grasshopper Shoe's launch last year, Leach-Paholski learned Pandanus was to be closed down. ...

The publisher, set up in 2001 under the auspices of the Australian National University, was in debt to the tune of $170,000 and the university was no longer prepared to subsidise it. Instead, Pandanus would be absorbed into the university's electronic press, ANU E Press ...

Australia's most prominent university presses, the University of Queensland Press and Melbourne University Press, have undergone radical restructures in recent times, including drastic staff cuts. In 2003, MUP shed most of its staff as part of a commercial overhaul; UQP has survived an exodus of senior staff and a $3.5 million debt burden. The ANU's vice-chancellor Ian Chubb said earlier this year the university could no longer afford to subsidise the loss-making Pandanus as it fell outside the core activities of teaching and research. (Chubb did not respond to Review's requests for an interview.)..."

Also Vic Elliott, Director, Scholarly Information Services and University Librarian at The Australian National University talked on Electronic publishing at Australian universities at the NLA November 27, 2006.

I agree with the VC, but even low cost e-publishing university operations will need some work on their business models to be commercially viable. Universities need to be clear about why they are doing e-publishing: is it as a commercial operation, or a subsidized one to aid scholarly communication. There is a danger that by trying to do both, they will achieve neither.

With the ACS Digital Library we are seeing if advertising will cover the costs. It will take about a year to find the answer. But the reason the ACS is publishing journals and conference proceedings is to provide information about research and practice in IT, not to make money. If we cover the costs, that would be good.