1. © 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

2. 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

3. © Rightscom 2009 – All rights reserved Torquay, trains and terrorism A short diversion into family history

4. 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

5. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 5 “System cruel”

6. 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

7. 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

8. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 8 But what of tomorrow’s pressures?

9. 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?

10. 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 )

11. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 11 Economic context

12. 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

13. 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

14. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 14 Responding to threats

15. 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

16. 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

17. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 17 A guide to the options

18. 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

19. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 19 Viable options  Follow  Fix  Or some combination of the two?  Are they compatible?

20. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 20 Any option only viable if…

21. 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?

22. 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

23. 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

24. 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

25. 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

26. 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

27. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 27 It’s never too late

28. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 28 Or is it?

29. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 29 „Gegen die Dummheit, kampfen die Gotter selbst umsonst“ Schiller

30. UKSG conference 2009: Hugh Look © Rightscom 2009 – All rights reserved/ 30 Thank you Hugh Look Rightscom Ltd www.rightscom.com