October Ivins (speaker), Rick Burke (speaker)

1. October Ivins, MLS
october.ivins@mindspring.com
Charleston Conference
November 8, 2013

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Introduction
Definitions
The Why and How of Publisher Pricing
Models - October
Models Librarians Love and Hate– Rick
Face Off in the Corral- You, Rick and
October
Please: Points of clarification during; questions
during Face Off
1

3. 
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Business Model- the big picture, how the
publisher makes money or supports itself.
May include seeking grants, private
investment, advertising– sources separate
from income from selling publications
Pricing Model- the model can be simple or
complex but covers how a specific
product, product group, or multiple
product groups are priced and discounted.
Price Points- the list prices assigned to
points in the pricing model structure
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4. 
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Market research responses
Librarians are fine with even complex models
“So long as I can find my library’s price in the
model”
3

5. 
Define Goals
Identify team and timeline
Environmental scan
Choose market research role
Estimate direct costs and indirect costs
Consider pricing models that fit product,
market, and estimated price point
Use estimated prices to model
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Preview with market research; adjust
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o Current customers
o Prospective customers
o Repeat as needed
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6. 
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New product? Enhanced product? Underpriced
product?
New competitors?
Bundle or market with other content?
Cover increased costs/move to commercial
publisher?
Create lower priced option for smaller
customers?
Support international outreach?
Customer, consortia feedback?
Differentiate member benefits?
Phase out print version?
5

7. 
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Timeline, work back from price
implementation
Team- staff; outsource, consultant(s)?
What staff expertise is needed; how much
time?
Quality of current customer and price data
Access to historical data?
Access to vendor data?
Market research options?
Create, vet, revise project timeline
6

8. Examine product and its position in the
marketplace
 Retention rate; new customers
 Profile former customers; why dropped?
 Availability in aggregators, embargo;
Packages?
 Identify cohort publications
 ISI Impact Factor, altmetrics ?
 Assess pricing model and pricing of
publishers of cohort publications
 Visibility: reviews, conference programs,
social media?
 Librarian Advisory Board, formal, informal?
7

9. External Data Resources
 Carnegie Classifications
http://classifications.carnegiefoundation.org/
 Vendor comparative publisher data
 Library Journal journals prices March-April
 Ulrich’s
 Impact factor, altmetrics
 ACRL Library Statistics
 ARL Library Statistics
 Peterson’s Guide
 Many for international
8

10. ARL and ACRL 2001 Survey of Library Materials Budgets
Associates
Bachelors
Masters
Doctoral
$
$
$
$
High, $
880,461
4,502,600
4,716,460
23,518,761
$
$
$
$
Mean, $
111,311
265,197
434,215
3,063,815
Median, $
$
83,100
$
125,352
$
287,760
$ 1,647,072
$
$
$
$
Total, $
Institutions, n
40,896,211
368
70,012,027
264
209,291,857
482
1,216,334,523
397

11. 
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Timeline, upcoming meetings and
locations
Before, during, pre-launch, post-launch
Existing Library Advisory Board?
Squeaky wheel/champion customers?
Phone interviews, focus groups, surveys,
town halls, conference one to to one, etc.
Transparency vs. confidentiality
But…Not a democracy
May not take advice
10

12. Direct
Indirect
Acquisitions
Editorial
Indexing
Production
Hosting
Marketing
Sales
Customer Service
Preservation
Rent
Utilities
Insurance
Management
Equipment
R & D Investment
“The strong carry the
weak”
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13.  Sustainable
income (non-profit) vs.
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Maximize revenue (commercial)
 Prevent competitors from gaining more
revenue
 Make up for loss of additional print
subscriptions on campus
•
Base on historical revenue/titles
 Big Deals- inflexible w individual titles
 Per site fee with remote access
 Transparent vs. Opaque
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14. 
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Aggregator products also have pricing model
for royalty distribution to publishers
Tiers, plus: lower price for smaller
institutions/multiple price points for variety
of institutions
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Carnegie Classification
Student enrollment FTE
Number of faculty
Number of simultaneous users
Disciplinary users = usage, but Discovery services
Disciplinary users = academic program.
Population served = public library
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15. 
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Absolute vs. comparative
Differentiate institutional, individual and
member rates
Oppose/Support/Promote consortial sales
Backfile (sell separately; with current
subscription only; rolling bundled backfile)
New ebooks with print counterpart discount
Textbook model- static vs. interactive
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16.  Map
proposed prices to existing customers
 Calculate percentages affected: pay more,
stay same, pay less
 Calculate dollar amounts of change
 Identify other causes of large increases, such
as reassigned Carnegie values, change in FTE,
etc.
 Continue modeling until the prices are the
most moderate that can achieve revenue
goals
 Publish price schedule vs. Require Quotes
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17. Library
Tiers
5
4
3
2
1
1
71.4%
47.5%
33.3%
25.0%
15.0%
Usage Quartiles
2
3
4
81.0% 90.5% 100.0%
52.4% 57.1% 61.9%
38.1% 42.9% 47.6%
26.0% 28.5% 30.0%
16.0% 18.5% 20.0%

18.  Contact
customers with large increases
 Explain rationale and result
 Note timeline for implementation
 Adjust as needed
 Expand outreach other customers
 Inform all participants in market research
 Prepare public announcements
 Incorporate into marketing timeline
 Monitor impact on renewals; Mediate
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19. October Ivins, MLS
october.ivins@mindspring.com