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An Interview with Bob Weinschenk, CEO of SIPX

Bob WeinschenkThe move from print to digital has led to all sorts of innovations in scholarly publishing, including the launch of many new startups that are adding value at various stages of the scholarly communication cycle.  One of the more recent, SIPX (formerly the Stanford Intellectual Property Exchange), which launched in 2012, aims to simplify digital rights management for end users – faculty and students – while at the same time making life easier for the publishers and purchasers of the content (librarians).  Over 30 publishers, representing around 30% of all scholarly book and journal content, have already signed up with SIPX, as have more than a dozen higher-education institutions and consortia in the United States.

The CEO of SIPX, Bob Weinschenk, kindly agreed to be interviewed by phone at the SIPX headquarters in Palo Alto, CA. He is a man who is clearly passionate about what SIPX does and about the good he hopes they can help to do in the world because, as he says, “Education is good for everyone – an educated population makes better decisions, so being able to help with this is one of the most exciting things about this job.  We are just a small cog in the overall solution, and the willingness of publishers and libraries to work closely together to bring content to a much broader base, for example, is critical. There’s money to be made certainly, but even more importantly there’s information to be shared…. every day provides a new opportunity to make a difference.”

Read on to find out more about SIPX and see if you think they will, indeed, revolutionize how copyright is managed in the future.

Q: What is the history of SIPX?

A: SIPX (formerly the Stanford Intellectual Property Exchange) started as a research project at Stanford, funded with $2.5m of gifted research, looking at how to solve the digital copyright ‘problem’, i.e. the fact that there was no system in place that allowed copyrights to be handled digitally other than through a manual process. I joined SIPX in December 2011, when the product was already up and running, being used at Stanford, and ready to commercialize

Q: Who is leading the charge for SIPX (with libraries, with publishers)?

A: No one single constituent has driven the demand: it has been embraced by everyone in the industry – libraries, publishers, end users. We have tried to create a win/win situation for everyone, but learning from what other products and services, like iTunes, have done in the market, both in a positive way ( e.g. in terms of mitigating piracy = good) and a negative way (e.g. constraining how materials are used = bad). Librarians love SIPX because it recognizes their institutional holdings, which allows end users – who typically don’t understand the value of librarians (in my experience some of the hardest working and undervalued people in world) – to be recognized for their work. Publishers love it because, in an increasingly international market, it allows them to set rights on an individual basis by offering contextual pricing – which differs by country, or segment, or community, for example – in same way that other consumer markets do.

Typically, if you make it easy for people to use your content legally, most people will, so SIPX makes end users more likely to embrace copyright than they would otherwise be. From the start, SIPX not only helped people legitimately buy copyright permissions easily, but also made sure to let people know when they already had existing rights to use certain content without requiring further payment.

Q: Who are your other main customer groups and what problems does SIPX solve for them?

A: Our two main customer groups are instructors and students. Instructors typically just want to teach, so the easier we can make it for them to select their reading list/core materials, the less of a barrier to change there is and the more likely they are to comply with copyright requirements. SIPX enables instructors to get real-time feedback and information on the teaching materials they select – price, availability, format, etc. – and which in turn allows them to make informed decisions about which materials to use, including how much it will cost them and their students.

In addition, for MOOCs, where professors teaching tens of thousands of students across multiple countries, being able to charge different prices for course materials based on the economics of the countries involved makes a lot of sense. Publishers can make decisions about which markets they want to enter and price accordingly, which creates reading materials more affordable for the students in those countries, as well as reducing the risk of piracy. I believe that, just like Costco or Amazon, publishers will in the future use contextual pricing for their customers so that, depending on how much information you share (e.g. I’m a Stanford alumni, a resident of Palo Alto, a customer of XX) systems like SIPX will allow you to find the best possible price based on these relationships. So our ultimate goal is to develop this much broader solution, starting with the academic market and then opening up new markets for publishers, while at the same time making their customers happier.

Q: How does SIPX work?

A: SIPX is a web service that is intended to be on a par with services like Google. It starts with a professor searching for an article using the title, keywords, ISSN, DOI, etc. Because they are typically already signed into their university’s library management system (LMS), and SIPX is integrated with this, we are able to give them immediate feedback about availability, pricing, rights, etc. The system creates a simple and flexible SIPX URL link, which the professor can then share with their students in all sorts of ways to distribute course materials.  Students can choose to purchase all or some of those materials, either via the university’s or SIPX’s payment system.  SIPX can also be used where there is no LMS or multiple LMSs or if some professors are using another system (like a website or a wiki), and it reduces the copyright liability for universities because a much greater amount of course material content has been authenticated.

Q: Who are some of your early adopters and what has their experience been?

A: There are a number of schools signed up and operational with SIPX already, but Stanford was the original guinea pig – the university is very willing to embrace new technology, but that technology has to work! The library staff of Stanford would not roll out the SIPX service to the university until it worked flawlessly and could be shown to bring clear value to Stanford.  Their experience has been very positive, and we have never let them down. Stanford has extensive institutional holdings and, by comprehending these, SIPX has saved students and faculty significant cost. SIPX enables the university to fully understand how their materials are being used and to be confident that they are legally compliant. The ultimate sign of their happiness with SIPX and belief in the value of the SIPX service is that they are investing in us.

Q: How do libraries and publishers get started with SIPX?

A: We aim to make the whole process frictionless. So our agreement with publishers is just a few pages long and enables them to use SIPX for anything from single articles through to all their publications. SIPX ingests the publisher’s metadata, so anyone using our system can find the relevant copyright information either from publishers (where we have a direct relationship – about 30 publishers and 30% of all books and journals to date, including open access publishers), or via the Copyright Clearance Center (CCC), who have relationships with 16,000+ publishers worldwide. It’s a really simple process – we take publishers’ data in any format, adjust it as necessary, and then populate the SIPX database. As soon as the publisher is ready we can start ingesting their data.  For libraries it’s just as easy. Once the license is signed, we deploy the LMS integration for that particular university (or support the institution in starting to use SIPX right away, in advance of an LMS integration) and ingest the institutional holdings.  We are able to handle payments by billing course material costs to the university, or have students purchase directly from SIPX via PayPal -whichever the institution prefers. Despite the simplicity of set-up, SIPX effectively provides complete coverage of academically relevant published content because we’ve also taken extra steps to connect with aggregated data and content sources.

Q: What’s your business model?

A: There is no annual subscription fee for SIPX – we instead charge a web transaction fee for readings that require a royalty payment, but there is no web transaction fee for readings from material that is already available free (eg because it’s OA or in their institutional holdings). There is also a small one-time setup fee to universities to cover our integration costs. In addition, we take a small fee from publishers with whom we have a direct relationship.

Q: What types of content can be included in SIPX?

A: Every kind of reading material right now.  More specifically, the content collection so far has focused on book and journal content from both the academic and trade markets, including content from both commercial and non-profit sources.  Publishers need not have digital content to participate. But broadly speaking, we are completely neutral on content so we can include all data types, though there are still some outstanding challenges with video as a format, which we are working hard to resolve. Typically the content is then delivered via the publisher’s platform but we can also deliver direct.

Q: How does Open Access impact what SIPX offers?

A: We don’t want to constrain, or be constrained by, any business model, so we completely support inclusion of OA content as quality academically relevant content.  I believe it will be a critical part of the future of education, but I don’t necessarily believe that everything will become fully available OA. SIPX will support the OA and non-OA markets equally.

Q: How does SIPX interact with existing copyright licensing agencies (CLAs)?

A: We are already working closely with CCC as noted above, and are just starting to interact with other CLAs as we become more international. We don’t want to duplicate what they do, but we do hope to both capitalize on their existing relationships and to expand their influence by making it easy for readers to use information appropriately.

Q: How about your work with leading MOOC (Massive Online Open Course) providers?

A: MOOCs are an incredibly exciting market for us. They are opening up education and using technology to bring a higher quality of education to a wider base than ever before. We have worked with major MOOC providers already. But the MOOCs of today are about 0.001 of what the MOOCs of tomorrow will be. I believe there will be a MOOC for everyone in future, so SIPX will be clearing data for a very diverse audience geographically and contextually. It’s really exciting to see the same content being used to teach students in countries as diverse as America and Afghanistan. And it’s a perfect fit for us because it requires that matching up of content, person, and price. It’s going to be an explosive part of our business.

Q: What kind of analytics does SIPX capture?

A: We have analytics that provide great insights for both producers and consumers of content. We know who bought the content, where it came from, and what they paid, and we can make this data available to publishers and librarians so they, in turn, can make better decisions. Publishers can use the data to help with pricing decisions, like geographic pricing, or creating more diverse pricing models. Universities can use the data to understand what their students are purchasing and which institutional holdings they are using. We don’t ever share individual data –it’s all aggregated and anonymized, whether at class, university, or country level (especially relevant for MOOCs because, for example, you can see whether similar countries react in the same way to the same price points).  We have also seen strong interest from authors and editorial boards wanting to know where their content is being used and now their publishers will have that information.

Q: What does the future hold for SIPX in the short and longer term?

A: The challenges of making copyright easily understood and of creating an open marketplace doesn’t stop with U.S. post-secondary educational materials. We are looking to expand and feel that there are a number of interesting new markets in our future. Everyone should be able to easily get whatever materials they want and we should help them do this. If there are markets where we can bring value and do so in a credible fashion, then we are interested in exploring and  pursuing them.

It is also very important for us to build our brand: everything we do has to reinforce the openness and transparency that we want our brand to be associated with.

About Alice Meadows

I am Director of Communications for Wiley's Global Research (Scientific, Technical, Medical, and Scholarly) business. I previously held a range of marketing roles in both the US and the UK, including most recently as Director of Society Relations for Wiley. I was also a founding partner in a small business offering marketing services to scholarly and STM publishers. Note: The opinions expressed here are my own and do not necessarily represent those of my employer.

Discussion

13 thoughts on “An Interview with Bob Weinschenk, CEO of SIPX

  1. Above in “How does SIPX work?” I believe the “LMS” in this case is for LEARNING Mgmt System, not Library Mgmt System.

    Posted by Catherine Tierney | Jul 17, 2013, 12:49 pm
  2. After reading all this, I still don’t understand what SIPX offers that the CCC already doesn’t through its many programs like Rightslink, Get It Now, PubGet, its transactional and blanket academic licensing, etc. It’s interesting that SIPX should choose to focus on the academic market initially, where the challenge to copyright is most troublesome through aggressive interpretations of fair use promoted by the ARL and other groups.

    Posted by Sandy Thatcher | Jul 17, 2013, 3:46 pm
    • SIPX integrates with the Learning Mgmt System, so no need for the instructor to go to a 3rd party site. It works with the libraries to recognize holdings, and it recognizes the CCC Annual License. The LMS integration allows SIPX to collect the analytics that are so useful to all sides: Authors and Editorial Boards always want to know where there content is used in a classroom setting, and librarians want to know what content instructors are using that is not covered by their subscriptions.

      Posted by Catherine Tierney | Jul 17, 2013, 5:54 pm
    • First of all let me state that we work closely with CCC and I’m a big fan of all the programs you mentioned. Our service complements these CCC services plus other services offered directly by publishers and makes them available at the easiest possible point of engagement for most professors and students – the Learning Management System (LMS). Actually we support whatever means instructors use to communicate/distribute content to their students (wikis, websites, MOOCs, or LMS). We also provide a comprehensive coverage for all material used at a university or college by including no-cost material such as that available via public domain, library subscriptions, open access, etc..

      Posted by Bob Weinschenk | Jul 18, 2013, 3:17 pm
  3. Since SIPX handles the payments for a fee this seems to make it a wholesaler of sorts. Is it a for profit or not for profit operation? I agree that MOOCs may be a major new content market, even if the course is free.

    Posted by David Wojick | Jul 18, 2013, 9:31 am
    • SIPX is a for-profit corporation. Our goal is to make copyright transactions frictionless (easy, open, and transparent) so we act as an easy-to-use distribution channel versus a wholesaler. We pass through publisher pricing and content licensing terms and simply add a nominal flat transaction fee. It’s important to note that we do not charge this transaction fee on any free material (e.g. public domain, or content under library subscription).

      Posted by Bob Weinschenk | Jul 18, 2013, 3:00 pm
      • That’s one difference from the CCC, which is non-profit.

        Posted by Sandy Thatcher | Jul 18, 2013, 9:17 pm
  4. Thanks Bob. Is Stanford a major owner? Any thought of an IPO? What can you tell us about the business?

    Posted by David Wojick | Jul 19, 2013, 8:05 am
    • Hi David. Stanford is the licensor of our core technology and patents, and is one of many investors. More important, they have been very supportive of what we do in so many other ways that I couldn’t begin to mention. Regarding an IPO – if we stay focused on creating a great service and building a brand of trust, integrity, and innovation – the rest will take care of itself and we’ll be fine. As you might be able to tell from the interview I’m incredibly passionate about what we’re doing and feel that we’re making great progress so I can say that business is very good. Then again we’ve only just begun so there are many more ideas that we need to get to…

      Posted by Bob Weinschenk | Jul 19, 2013, 2:42 pm
      • Then you’ll need to be concerned about the way the ARL is interpreting “transformative use” to sanction copying of everything except textbooks, at any length, for classroom use on the theory that such things as journal articles and academic monographs, not to mention fiction and poetry, were not written primarily for students and thus any classroom use of such materials is a “repurposing” and hence “transformative” fair use. That argument, if successful, will effectively out your company out of business.

        Posted by Sandy Thatcher | Jul 19, 2013, 5:13 pm
        • That indeed might be the case for works distributed physically and then, subsequently scanned into digital forms. However, works-of-art solely distributed digitally can be, and most often are, licensed for use under intellectual property licensing practices. Such terms of use can be reinforced by digital rights management technologies, but in any case, I.P. licensing can limit fair-use protections. Micro-licensing approaches used by CCC and SIPX for digitally distributed publications are the future for readers, writers, and publishers alike.

          Posted by Open Publishing | Jul 22, 2013, 3:25 pm
          • But almost anything can be printed out, and most digitally delivered publications offer print-on-demand options. What is to prevent any academic library from obtaining a POD copy from a faculty member (under the “first sale” doctrine), then scanning it into the library’s system, and making it available through the university’s course-management system for classroom use? Since the library did not sign any license, it is not bound by the terms, under this scenario, which is quite easy to envision on the ARL-recommended model.

            Posted by Sandy Thatcher | Jul 22, 2013, 4:54 pm

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