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© Rightscom 2009 – All rights reserved Clubs, jokers and the ace of spades: consortia and business models beyond the Big Deal Hugh Look Senior Consultant, Rightscom Ltd
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 2 Of course I'm an optimist "If we maintain our faith in God, our love of freedom, and superior global air power, I think we can look to the future with confidence." General Curtis LeMay, mid-1960s
© Rightscom 2009 – All rights reserved Torquay, trains and terrorism A short diversion into family history
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 4 “Oligarchies are seldom destroyed. They more frequently commit suicide” ＞ Lord Reay, at the time of Lloyd George’s Finance Bill
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 5 “System cruel”
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 6 Today’s pressures: libraries Already well described by Jill; more to come from Katherine Exchange rates Inflexible big deal subscription models Tension with academics Increasing “libraries don’t matter any more” thinking Collection development still essential Increasing gold OA costs Holding consortia together under pressure
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 7 Today’s pressures: publishers Problems sustaining margins Increasing pressure from customers for more flexible model Less capital available/harder to get investment agreed Impact of public policy developments The share price/value to society The other parts of the business
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 8 But what of tomorrow’s pressures?
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 9 But what of tomorrow’s pressures? Continuing economic uncertainty: a shared problem How much will we have to spend? How can we sustain our markets? Could the sky fall in? Changes in research & education Boundaries between institutions becoming more flexible Funders looking for different value A drive to economic impact?
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 10 But what of tomorrow’s pressures? The impact of developments already underway Publication charges Repositories Free access More demanding students What pattern emerges? Problems for the subscription model This does not mean it’s fatal! ＞ ( But it might be )
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 11 Economic context
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 12 Economic context Double-digit declines in funding for content Exchange rates Impact of recession on other divisions of publishers Impact on other functions of institutions Continuing growth in new markets High potential, but must offer very high value to secure business Impact on planning Short-range visibility only
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 13 Two models pulling in different directions? Consortium deals Size gets better deals ＞ Cost and T&Cs Scale allows for acquisition of “surplus” resources at marginal cost ＞ Higher perceived value Change can be slow ＞ The cost of doing politics Big deals Limit to what can be achieved – customer size “Surplus” resources have actual cost (tradeoffs) Change easier to implement in theory – 1 to 1 In practice, bargaining power limits flexibility
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 14 Responding to threats
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 15 Responding to threats Fight Try to stop it happening Flight Give in, exit the sector Face-off Stare down the other side, ignore problems, pretend it’s not happening (or at least, not to you) Fix Make it more attractive for people to stick with the existing model Follow Stay in, accept alternatives are needed Faff Dither, tinker, hope it will get better
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 16 How has the sector responded? …and I’m including publishers and libraries here: interdependent components Combination of Fight, Fix and Face-off With quite a lot of added Faff And a small amount of Follow Fight and Face-off can involve politics Fix is mainly tactical solutioneering Faff is…well, faff Faffing can look like fixing Confusing the two is very tempting… and very dangerous
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 17 A guide to the options
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 18 A guide to the options OptionPublishersLibraries FightLobby; spend money on consultants; become indignant Lobby; get someone to spend money on consultants; become indignant FlightSell the business (but who to?); close the business; turn out the lights Devolve everything to academic departments; turn out the lights FollowAccept revenue loss from new models Cost & pain of transition to new models FixBig deal; better terms; more/enhanced product Consortia; add more users; negotiate limited additional flexibility Face-offMaintain prices, deals; accept (short-term?) loss of business Refuse to pay more/accept less; cancel; face (short-term?) hostility from users FaffMake many small changes; trivial experiments; whinge that libraries are never satisfied Whinge about changes being disruptive; whinge about changes not going far enough
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 19 Viable options Follow Fix Or some combination of the two? Are they compatible?
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 20 Any option only viable if…
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 21 Fix Make it more attractive for people to stick with the existing model Often comes about as a response to Face-off The internal combustion engine as we know it “Superconsortia” The same but bigger Up to national level? Cost/time involved in setting up Increased flexibility in big deal Rule-driven models lead to binary decisions Create efficiencies that allow reduced prices without lower margins Sounds a bit like Faff?
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 22 Follow Stay in, accept alternatives are needed Change pricing model (again) Redistribute functions and costs i.e. change where value is added and paid for ＞ Examples: Gold OA, overlay journals Let the academy do more ＞ Allows overhead reduction for publishers ＞ Lower prices, but maintain margin
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 23 Redistributing roles: where do you find value in a networked world? At the periphery - closest to the user, where specialist expertise is needed and relationships developed Control of the user interface Individualised experiences At the core - where the shared infrastructure and expertise is Generic Benefit from scale Not in the middle, with the process and pipeline operators
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 24 Alternative models Advertising, sponsorship But not a good climate at the moment Usage pricing We all know it creates barriers Cheap subscriptions with usage caps Mobile phones How much feedback do users need? No publishing company has a back office that could sustain this level of transaction Volume Complexity
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 25 What really matters? Transition, transition, transition Many of these models could work The problem is the cost and disruption involved (for everyone) in getting there Can only be managed system-wide
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 26 Is this a solvable problem? And if not, what do we do about it? If it works for libraries, it won’t work for publishers? Is it cyclic? Probably, but impossible to predict the length of this phase Managing polarities is a key skill We all have to live with high levels of uncertainty There is a lot more Face-off and Fix to come
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 27 It’s never too late
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 28 Or is it?
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 29 „Gegen die Dummheit, kampfen die Gotter selbst umsonst“ Schiller
UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 30 Thank you Hugh Look Rightscom Ltd www.rightscom.com
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