Image by George Eastman House
Image by George Eastman House.

Editor’s Note: Santa, if you’re out there, Joe Esposito has been very good this year. He’s still waiting for this gift, for which he asked back in 2009.

As the holiday season approaches, many of us will be writing Santa with special requests for gifts.

All I want for Christmas is a library card.

Yes, yes, of course I have a library card, but that card is to my hometown public library.  I love our little library, but what I really want is remote access to the digital collections of the University of California,  one of whose campuses is a mere 100 yards from my house. As I do not have a university affiliation, the only way I can use the digital collections is to go on campus and use a computer within the walls of the library. This would not be so bad if I were involved with a research project that required me to spend the better part of a day at the library, but for the most part my research needs are one-shot questions — the need to look up a single article from a journal, perhaps, or a desire to check out the etymology of one word in the Oxford English Dictionary. Remote access would be a godsend — or a Santa-send.

It’s mind-boggling that I cannot obtain it at any price.

Santa, I have been real good this year!

I can hear the objections from non-elves already. I could purchase individual subscriptions to the publications, but no one who has added up these figures seriously believes that individual subscriptions are an option except in those cases where the individual requires not casual use of a publication but concerted, professional use (e.g., a library consultant who might subscribe to a journal on collection-building). The cost of an annual subscription for individuals to the OED, for example, is $295 per year. If you look up a handful of terms in the OED each week (a credible definition of non-professional use), you begin to do the arithmetic:  $3 per look-up? $5? For this reason, most individuals make a default decision — subscribe to a handful of heavily used publications, get unauthorized access to materials that are too dear to purchase, and use the free, if often unreliable, resources of the open Web the rest of the time. I suspect that the goal of unauthorized access accounts for a certain number of liaisons with librarians that are, as they say, “not in the catalog.”

Objection #2:  That’s why we need open access. Maybe so, but it is hard to envision a method by which the world’s publications suddenly became available free of charge for the casual user. Whatever one thinks of the social or moral aspects of the world of publishing, as a practical matter, access is a privilege.

Many people are knocking at the door, but only a few (those with access privileges) get in. As a businessman, I sense an opportunity here: How to monetize the pounding at the door?

One proposed solution comes from the library world. Many librarians would like to be able to grant remote access to their collections for their institutions’ alumni, and alumni are willing to pay an additional, if modest, fee for these rights. On the surface, this sounds like a neat solution. A library already has much of the infrastructure in place:  subscriptions to publications, a means to make digital collections available remotely, and authorization schemes to determine who is and who is not an authorized user, not to mention years of experience in determining what materials are worth including in a collection. Thus, a publisher that charges, say, $1,000 for an annual subscription to a library may grant alumni rights for an additional 10%. This is potentially found money for the publisher and an additional service that universities could provide to their alumni, who may demonstrate their gratitude with donations—which could be used to purchase more publications.

On closer examination, however, it becomes clear that enabling libraries to become broader resellers of materials is not in the publishers’ interests. The reason for this is that however one defines the relationship between a library and its parent university, a library is not the center of the universe. (Whenever I talk to librarians about this relationship, I’m reminded of the incessant punning on “universe”/”university” in John Barth’s novel “Giles Goat-boy”.) Alumni go out in the world to take jobs at corporations like Merck, Microsoft, Fujitsu, and countless others, where publishers have assiduously developed markets for their materials. An undergraduate who gets access to Lexis-Nexis may go on to become a senior partner at a Wall Street law firm, where the fees paid to Lexis-Nexis are staggeringly high. If undergraduates carried their institutional access privileges with them through life, the markets for the sale of publications to the corporate and government sectors would collapse—and likely lead to a huge price increase to academic libraries to offset the loss. While some publishers, particularly those with little or nothing in the way of corporate or government sales, may eventually decide to grant alumni rights to libraries, this will at best be a solution with gaping holes. So, once again we are back to a library bypass strategy, which, I repeat for the umpteenth time,  is the single most pressing item in the world of scholarly communications today.

But still there is that knocking at the door. It’s time for publishers to join hands and create a consortium whose aim is to monetize users like me, people who have a need to get access to the vast collections of a major university library, but whose anticipated use of any single publication is modest. This is a prospective market segment that will pay for information—it is, in other words, a market and not an unfunded social need. Consortia have served publishers well in other areas; consider CrossRef, the Copyright Clearance Center, and the recent development of CourseSmart, a joint venture of the major college textbook publishers, whose goal is to advance the sale and use of digital textbooks. A carefully planned joint venture could open up a new market segment.

Let’s imagine that all the publishers that currently market digital resources to academic libraries were to participate in the consortium. For the price of a single subscription, an individual would then get remote access to a digital library on the scale of Harvard’s or the University of California’s. The cost of a subscription would not be inexpensive — $500 a year?  $1,000? Identifying the right price (or prices, as there could be a tiered model for users who access the service more heavily) would be an interesting exercise; perhaps there could be some guidance by deriving the allocated cost per undergraduate for the use of the library at a research institution.  But whatever the price, the proceeds, after subtracting the cost of operating the service, would be shared pro rata by the participating publishers. My $1,000 subscription might yield $50 to Oxford University Press, $75 to Elsevier, and $2 to the Bulletin of the Atomic Scientists.

The reason publishers resist this kind of formulation is that they mistakenly add up the value of all the content they create (which is indeed worth a tidy sum) and confuse that with the amount of time an individual actually has to spend with any single publication. Few people who are not themselves academics or professional researchers spend many hours doing research. They can’t, as their days are filled with meetings, phone calls, email, and traipsing to and from airports and trade shows. The question for publishers to determine is not how much is a publication worth but how much of an “information tax” they can reasonably impose on one hour of my time.

There are publications for which this will not work, namely, any publication that already has an established consumer market. Let’s say (picking a few publications at random) that the Economist, the Chronicle of Higher Education, the Wall Street Journal, and the New York Review of Books were to be included in the service. This would lead to many cancellations of subscriptions to those products in favor of the omnibus subscription to the consortial service (assuming no atavistic yearning for print editions). The profile of a target publication for this service is one that is delivered electronically, has a casual readership beyond the world of specialists, and has little in the way of individual subscribers.

Even if publishers are cool to the idea of working jointly, they should consider the comment of Professor Stevan Harnad, who, speaking of another program to reach a new market segment, notes that such initiatives could hamper the movement for open access to research literature:

The current bids to “monetize” the existing OA content — whether from OA journals or from OA repositories — are likely to reduce the momentum (from both users and authors) to provide that missing OA content, as well as to reduce the institutional and funder momentum to mandate that they provide it.

I couldn’t have said it better.

Santa, it’s time to make the North Pole into a sustainable business.

Joseph Esposito

Joseph Esposito

Joe Esposito is a management consultant for the publishing and digital services industries. Joe focuses on organizational strategy and new business development. He is active in both the for-profit and not-for-profit areas.

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Discussion

35 Thoughts on "Stick To Your Ribs: A Library Card Under the Christmas Tree"

But still there is that knocking at the door. It’s time for publishers to join hands and create a consortium whose aim is to monetize users like me, people who have a need to get access to the vast collections of a major university library, but whose anticipated use of any single publication is modest.

Isn’t the simple answer pay-for-download at a cost of $1 per paper rather than the current typical $35? Delivery is free to publishers, so if they sell 36 times as many downloads, they’d be ahead of the game — and they probably would.

(I guess the reason this doesn’t happen is fear that libraries would cancel all subscriptions and just buy access to the individual papers they need, right?)

But then if all the subscriptions are cancelled there will be no journals, so no individual papers to buy. If so then their fear (as you call it) is well grounded. Self ruin is not a good decision.

If the sale of 36 $1 articles brings in more revenue than a single $35 article, then that is an improvement in PPV income. The question becomes how many copies they’d have to sell, or at what price, to make up for the loss of subscription revenue. And of course that’s impossible to tell because subscription prices continue on the whole to be a closely guarded secret (although one that’s being progressively eroded by FOI responses).

If the sale of 36 $1 articles brings in more revenue than a single $35 article, then that is an improvement in PPV income.

Correct, but there’s no guarantee that lowering the price 35X results in 36X sales. As I noted above, given the small size of the market, this is highly unlikely.

The question becomes how many copies they’d have to sell, or at what price, to make up for the loss of subscription revenue.

Or you could lower your PPV prices as much as you could without threatening your subscription sales. I sincerely doubt that many journals are charging libraries greater than $35 per download for most of their journals. Given Rick’s comments about administration and overhead, you could likely lower PPV prices without seeing too many dropped subs. It is unclear, however, if that would result in enough of an increase in sales to overcome the reduced revenue per sale.

And of course that’s impossible to tell because subscription prices continue on the whole to be a closely guarded secret (although one that’s being progressively eroded by FOI responses).

From what I’ve read (http://poynder.blogspot.co.uk/2014/12/the-open-access-interviews-richard.html), there is only one major publisher that requires a non-disclosure agreement with libraries.

From what I’ve read (http://poynder.blogspot.co.uk/2014/12/the-open-access-interviews-richard.html), there is only one major publisher that requires a non-disclosure agreement with libraries.

That may be true in their dealings with UK institutions, but when dealing with US institutions I believe there are still quite a few publishers insisting on nondisclosure of both license terms and pricing. It’s been a while since I’ve negotiated a license directly, but I could check with my collection development staff to verify that, if desired. (Public institutions are often able to invoke local law in negotiating out at least some of the confidentiality language, but not always and not all of it — and private institutions don’t have that luxury.)

Thanks Rick, if you learn more I’m sure many would be interested in hearing. If you read the linked Poynder interview, there may be some issues beyond NDAs that prevent disclosure of some of these deals.

In some cases we might cancel, but the problem with this model is that the $1 price would be only a small part of the cost of the transaction. In a library that brokers hundreds of thousands of article downloads per year, the actual cost of managing those transactions individually would be huge. If the payment process were automated, however…

Why $1? Why not 50 cents? Why not $2? Why not $10? Where does that price come from, and what testing has been done to determine that this is the optimum level? Businesses charge what the market will bear and shouldn’t be based on random numbers. That said, I do share your suspicion that many PPV rates are based more on protecting subscription sales than on optimizing sales levels. There is likely a better balance that could be achieved.

The problem in your assumption above is that the demand for scholarly papers is elastic, and that a drop in price will result in an equivalent increase in sales. The majority of scholarly papers are at best a niche product, requiring a great deal of specialized knowledge to fully appreciate. There is a big difference between the potential size of the market for the latest work on string theory than there is for a catchy pop song or a piece of delicious chewing gum.

The lack of uptake of access to papers through DeepDyve, which if one buys a package deal costs significantly less than $1 per paper, is indicative of the small size of the market. One can argue that selling read-only rentals is a detriment to that uptake, but if the market were really as linear as you suggest (dropping the price by 36X yields a 36X increase in sales) then we’d at least see some significant level of uptake, which hasn’t happened.

Why $1? Why not 50 cents? Why not $2? Why not $10? Where does that price come from, and what testing has been done to determine that this is the optimum level?

None at all. I just plucked an illustrative figure out of thin air. I suppose that the $1 price of an iTunes song was floating around in the back of my mind, but no, before anyone asks, I am not saying that scholarly articles are of the same value of Taylor Swift songs.

What would be a good price? You will be much better positioned to make that judgement than I am.

The problem in your assumption above is that the demand for scholarly papers is elastic, and that a drop in price will result in an equivalent increase in sales.

Ah, no, not at all. I think price and demand are related catastrophically. At some point a threshold is crossed where a purchase becomes catastrophically less likely. If the iTunes price went up from $1 to $35 their sales would fall to nearly zero; but probably the same would happen if they hiked the price only to $5 or maybe even $2. At $1, a lot of people just think, “Sure, why not”. I suspect that if pay-to-download scholarly articles are ever to take off, they will need to come down in price to below whatever that analogous threshhold is in academia. But I could say where that threshhold is.

(Of course, I don’t want pay-per-download to take off. Even at one cent, it would be the wrong solution for me, because I am interested in freedom as well as cost.)

The lack of uptake of access to papers through DeepDyve, which if one buys a package deal costs significantly less than $1 per paper, is indicative of the small size of the market.

Maybe; or maybe people just don’t like the model. Most importantly, the restriction on what you can do with many articles via DeepDyve — no printing, image-extraction, copy-paste, etc. — make it a non-starter for a lot of people.

… but if the market were really as linear as you suggest (dropping the price by 36X yields a 36X increase in sales)

Just to reiterate, I don’t at all think it’s linear. I suspect dropping from $35 to (say) $20 would do almost nothing for sales, and that $10 or even $5 would probably not help much. It’s all about finding that threshold where the psychological nature of the transaction changes qualitatively.

Regarding DeepDyve, I think the explanation for the pace of uptake has many factors: 1) our own limitations as a company to build a better user experience, i.e. resources, mistakes, etc; 2) the limitations of access which is of course intentional to not overlap with the functionality of our partners’ PPV; 3) the limitation of content in our service, which affects user uptake, as not all publishers are participating; and 4) the limits of our publisher partners’ ability to accept and absorb the many tests and innovations we would like to do given their many other priorities and constraints. I do not believe we are anywhere near the limits of the market demand based on the census data of the number of information professionals worldwide that are unaffiliated with an academic library at a macro level, and the high bounce rates and low conversion rates of unaffiliated visitors to publisher web sites at a granular level.

Having said that, this market is most definitely growing quickly (although not evenly, i.e. certain subject areas are in higher demand than others), and appears to bear a resemblance in growth to the OA market when comparing them at similar stages.

It might be pointed out that the CCC recently acquired Infotrieve, so is moving into this space in a big way. The CCC has already been involved in a limited way in document delivery as well as rights clearance (through its Get It Now program, for instance), but it will now become involved in a much more expansive way–far beyond what DeepDyve has been able to achieve in market penetration.

Sandy, it might be pointed out that CCC had to acquire Infotrieve, but was not able to develop such a service itself in-house. Acquisitions are expressions of poor foresight. There will always be acquisitions because there will always be companies whose culture is inherently not innovative.

I’m not sure what the force of your words “had to” are meant to be, Joe, but the CCC didn’t “have to” do anything. It chose to do so for very good business reasons, which you would know if you were on the board as I am. Do you think all acquisitions are signs of failure? Was Google’s acquisition of Yahoo a sign of failure? If you think the CCC has not been “innovative,” you simply haven’t been paying attention for the past decade.

I have never understood Joe’s apparent bias against acquisitions. No company can have a monopoly on good new ideas, so there is a market for them. The whole venture capital industry is based on this concept.

Who said I have a bias against acquisitions? Much of what I do professionally concerns M&A. My point is that some people confuse it with product innovation.

But then there is John D’s “pioneering don’t pay” acquisition strategy, which was very innovative.

We’re already doing this: no need to subscribe, all our content placed in your library, any downloads made charged at $5 each. Works fine. Yes some subscriptions lost but across the board more revenue per institution. Its given us access to institutions which never subscribed to anything. Interestingly, formerly non-subscribed content now gets, in many cases, more usage than formerly subscribed content: ie the gate-keepers, who decided what was needed for their researchers, did not necessarily know best. We’re starting to look at how this can be expanded to include alumni: looks tricky – who pays, and how? Might find a way through.

Have you looked at DeepDyve? Only thing I’ve found that solves this problem affordably… nice alternative for independent researchers.

The cost of an annual subscription for individuals to the OED, for example, is $295 per year. If you look up a handful of terms in the OED each week (a credible definition of non-professional use), you begin to do the arithmetic: $3 per look-up? $5?

The OED is an interesting case, as there’s been a very successful arrangement in the UK between the local public library services and various publishers to provide digital access to reference works for local subscribers. In most cases, the arrangement is “type in your library card number here”, and some resources like the OED are taken by almost all county library services. (Oxford has been a major participant in this)

I don’t have numbers for what the OED usage is, and I don’t know what it costs the libraries, but the ODNB has reported something like a quarter of its readership coming through the public library routes – which suggests fairly good takeup.

Resources which are restricted to on-site access only tend to be those which, as you’ve noted, have an existing and proven consumer market – so things like Ancestry, the British Newspaper Archive, etc.

Incidentally, in regard to alumni access, the big success story here seems to be JSTOR – any idea what they’re charging or how effective it is?

Or, you could request the article on interlibrary loan from your public library or buy the single article from the publishers website. I do understand the issue, when my niece completed her master she asked me how she was going to have access to JSTOR and I had to tell her she wasn’t going to have access (this was some years ago). Some of us at my library would like to expand access to our alumni but the politics say this is the demand has to come from the alumni association and until/unless it does we’re not even able to expand to Project Muse and HaithiTrust where we already have the rights. In our case there are no fees associated with being a member of the association so the idea of enticing more people to join with associated revenues isn’t a compelling argument.

It seems to me like the greatest opportunity in this arena is for EBSCO. They already act as the broker to hundreds of scholarly (and popular) publishers, and they have the infrastructure in place to license access to their third-party content databases. The barrier, I think, is transactional scale: they know how to work with institutional customers, but do they have the kind of structures in place that would be necessary to start licensing access on a retail level — moving from a customer base of thousands to one of hundreds of thousands or millions? They are certainly far better poised to do this than the community of publishers is as a collective. (And as Andrew points out above, JSTOR has led the way on trying this kind of thing already.)

You could also use library services like Ask NYPL (http://www.nypl.org/ask-nypl) for quick reference questions or more in depth research…this supports the valuable services and resources so many public libraries offer.

Many universities now offer alumni access to digital collections at no cost to the alumni, and JSTOR is indeed one of these collections. But Project Muse has always allowed in its license for alumni to be included. So these are two large collections that are very important for researchers in the humanities and social sciences.

Sandy, do you know roughly how many is “many,” and what kinds of access these libraries are offering? Because the great majority of existing license agreements don’t allow alumni access. Separate agreements would have to be established, and there would be additional charges to the library. My impression is that JSTOR and Project Muse are outliers, but there may be more of this type of thing going on than I’m aware of.

I used “many” for rhetorical effect, Rick, and I don’t really have any hard data on how many libraries do this now. Of course, any library that subscribes to Project Muse can do it, if they want. I know that Yale began offering JSTOR to its alumni about two years ago. I pestered Princeton until they followed suit about six months ago. I suspect the practice is now widespread in the Ivies. I wonder if ARL has data on this?

For JSTOR, there are 99 institutions worldwide currently signed up (heavily US/UK, with a scattering in Ireland, Canada, Australia, NZ) – http://about.jstor.org/alumni#Institutions-in-program

One that doesn’t provide access is Harvard, though interestingly they’re studying this very question – http://library.harvard.edu/05022014-1545/project-update-alumni-access-library-electronic-resources – and the initial summary has some enticing details:

“In recent years, some publishers have begun to offer alumni editions of their journal packages which include access to journals from a limited number of publishers and often carry some kind of embargo period. Such packages from EBSCO, ProQuest, HeinOnline and Gale, for example, are available at a relatively low cost. Some, like Sage, Annual Reviews and Project Muse, include alumni access in licenses for current users at no extra cost. Others, such as JSTOR and JAMA for example, charge an additional 10%. Oxford University Press provides special pricing based on number of users.”

So JSTOR charges 10% extra on their annual fee in order to join the alumni program – not pocket change, but a reasonable-sounding figure.

I recently authored an article “Beg, Borrow, or Steal: Accessing Unaffordable Science Journals” detailing a variety of ways that those outside of academia gain access to the scientific literature. Here’s a link to it: http://www.xconomy.com/national/2014/11/10/beg-borrow-or-steal-accessing-unaffordable-science-journals/?single_page=true. And as regards the $1 per article model, I suggested this several years ago as a service called iPubSci and which was modeled on iTunes. Here’s the link for that article as well: http://www.xconomy.com/seattle/2011/12/05/ipubsci-a-solution-to-the-problem-of-unaffordable-science-journals/?single_page=true

As an amateur historian, I rejoice that the National Library of Scotland provides this kind of service free to anyone resident in Scotland giving free access to a host of resources that would otherwise cost a fortune. It is a wonderful service and I can’t praise the NLS highly enough. Check it out at https://auth.nls.uk/ldc/ and ask your major research library to match it.

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