1. Evolving E-Journal Business Models
and Pricing Update
SSP – 2005 Annual Meeting
Pre-meeting Seminar
June 1, 2005
Dan Tonkery
Vice President Business Development
EBSCO Information Services
Look at the E-Journal Landscape
• 15,716 titles in electronic format
• 30 plus Host services
• 341 publishers with e-format offerings
• 3509 titles available with Pay for View
• Subscription agents supplying over $1 billion in
E-Content sales to librarians
• Consortium sales also major sales channel
• Publisher direct sales???
• We all have come a long way since 1996!
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Common Elements of Most Business Models
• Some form of license is required
– Terms and conditions vary greatly
• Individual and institutional rates still offered
• Free or low cost access to the Developing World
• Flexible options are available
– Print plus free online (25.8% of EBSCO subscriptions)
– Print plus paid online – combination rate (9.0%)
– Online plus print at steep discount
– Online only (5.6% of EBSCO subscriptions)
– Single site and multi-site licenses – custom priced
– Consortium deals - custom priced
• Opt-i n
– Big deal
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2. Factors Included in Institutional Pricing
• Preservation of current revenue by most publishers
• Single installation vs multi-site or global
• Length of deals is three years with optional years
• Normally, limits on cancellation – publishers seeking
revenue protection
• Fixed annual price increases for length of contract
• Price set by some form of user population analysis
– Full time equivalents – with price bands/tiers
• Small, medium, large
• Classification schemes for Academic/Libraries
– Carnegie Classification of Institutions
– NEJM – self produced tier system
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Sample Carnegie Classification Scheme
List of Institutions by
Carnegie Classification, Control, and State
The 2000 Carnegie Classification groups using more recent data.
Doctoral/Research Universities --Extensive
Doctoral/Research Universities --Intensive
Master’s Colleges and Universities I
Master's Colleges and Universities II
Baccalaureate Colleges—Liberal Arts
Baccalaureate Colleges—General
Baccalaureate/Associate's Colleges
Associate's Colleges
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Sample Carnegie Classification Scheme
Specialized Institutions
Theological seminaries and other specialized faith-related institutions
Medical schools and medical centers
Other separate health profession schools
Schools of engineering and technology
Schools of business and management
Schools of art, music, and design
Schools of law
Teachers colleges
Other specialized institutions
Tribal Colleges and Universities
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3. It all starts with the License!
Terms & Conditions.
Access options for institutional customers
• Single vs multiple site options – Global
• Back volume access rights
– Rolling back file vs set-terms
– What happens if current subscription is cancelled
– Separate back-files purchase or subscription
• Roaming Access – off campus access
• Interlibrary loan and electronic reserves are
controlled items
• Shared access to non-subscribed titles in consortia
• Pricing is set by FTE, Platform fees, access rights
– Set in license agreement 7
Fundamental Business Rules for the Publisher
I. Maintain the level of revenue your print
subscriptions provided to pay for supporting two
formats.
II. Recover the costs of creating electronic versions
and ongoing staff and development costs
III. Devise a flexible sort of business model to meet
your financial goals.
IV. Be able to explain your model
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What are the business models for e -journals
content in the future?
Libraries like to have:
- Flexibility – selection and collection coverage
- Predictability – for budgeting
- Widest possible access for their user community
- Reliable usage statistics
- Decrease in cost over print expenditures
Publishers would like to continue:
- Maintain current or see better levels of profitability
- Reduce print dependence
- Libraries to find more funding for library acquisitions
- See some relationship between usage and price 9
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4. What are the emerging business models?*
• National license
– Allows universal access and single national payment
• PPV converting to subscription
– Non-core titles available on PPV with cap on expenditures.
Publisher sets up premium rate that converts to subscription
• PPV with pre-purchase
– PPV with pre-purchase of blocks of PDF downloads
• Core & peripheral
– Core titles by subscription with peripheral covered by PPV
• Open access – author pays e.g. OUP
• Open access – hybrid model e.g. Springer
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* Based on JISC Study published 6 April 2005
Summary of Business Models for E-Content
• No single model will meet the needs of publishers and
libraries
• No model can make up for reduced funding or cut backs in
acquisition funding
• Both libraries and publishers want models that offer
predictability. Predictable costs for libraries and revenue
streams for publishers
• Open access models need a period of experimentation. Too
early to measure impact.
• Shifting the cost of subscriptions or e-content to faculty will
not help libraries in the long run.
• Publishers want to see some relationship between usage and
price
• Librarians want flexibility in terms of selection, cancellation
and access rights 11
Subscription Agent Advice to Publishers
• Develop or follow simplified license agreement with clear
terms and conditions
• When changing business model, communicate to agent,
libraries and end users early in the process
• When changing hosts, don’t make extra work for libraries
i.e. re-registration
• Keep your price increases realistic!
– Extra papers and/or extra issues don’t justify price increase
• Keep your pricing models as simple to understand as possible
– 26 tiers are too much
• Target June-July for communicating changes to libraries and
agents
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5. References
Business Models for Journal Content. Report prepared
for Joint Information Systems Committee, 6 April
2005, United Kingdom.
www.nesli2.ac.uk/jwg -studies.htm
Excellent survey of where we are going in the future.
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