1. JISC Collections *| Slide 1 Untrammelled Access What is the business models for E-books? Lorraine Estelle JISC Collections ANKOS Annual Meeting 2011

2. JISC Collections Opportunity of digital age! The digital age provides us with wonderful opportunities for providing information to students and researchers: Opportunities for flexibility, convenience and perhaps most important of all, enabling in minutes, search results that would take years in the physical library In order to realize these opportunities the library community would like to license lots of e-books at an affordable price and with access terms that are simple and easy to understand However, despite this articulated demand from libraries, the landscape is messy There is confusion and even disagreement about the best business models, and in some cases publishers will not make the e-books libraries want available – or at least not at an affordable price | | Slide 2

3. JISC Collections national e-books observatory project In 2007 JISC Collections undertook the e-books observatory project (www.jiscebooksproject.org).www.jiscebooksproject.org The purpose was to: –understand (though deep log analysis ) how students and lecturers use e-books –analyse the impact of the free at the point of use e-books upon publishers’ sales of print books We licensed a collection of 36 e-books relevant to UK university students in four discipline areas. This collection of e-books was made available to almost every university in the UK, with unlimited concurrent use This provided us with the opportunity to study the behaviours of students across 150 institutions. 52,000 users of these e-books responded to our online survey – we think the largest survey ever of this kind | | Slide 3

4. JISC Collections We found that: The use of text e-books appears to be based on convenience, enabling students and staff to fit work and study more easily into their busy lifestyles Almost a third of the pages viewed were viewed off campus and at all hours of the day and night A more recent study undertaken at the University of Liverpool, also found that: “eBooks are overwhelming preferred in the areas that one would expect: accessibility, availability, currency, and the ability to transfer the information from the text. But where aesthetics are concerned, as in ease and pleasure of reading, print books were clearly favoured” | | Slide 4

5. JISC Collections When studying the behaviours of users we found: E-books are used for quick fact extraction and brief viewing rather than for continuous reading, they are being used as though they are encyclopedias and dictionaries rather than extended continuous text This was finding was supported by the more recent study at the University of Liverpool: “… [users] browsed titles within a certain discipline, but the preferred method for locating material was keyword search, the most direct and efficient method for finding information on a given topic. These findings support a key conclusion … a ‘database of chapter’s’ is a highly effective means of acquiring content for a research institution.” | | Slide 5

6. JISC Collections So, in summary these two studies support the idea that: “What users like about e-books is that they can get to them whenever they want to and from wherever they happen to be What users do with e-books is to treat them like a huge database of information, which they mine for the facts needed to answer their immediate questions Does that sound rather like Google? My 18 year old daughter says: “I like Google, because you can type anything in and get an answer” 19 May 2015 | Click: View=>Header&Footer | Slide 6

7. JISC Collections I would argue that if publishers and libraries are to be successful in the digital age, they must work together to ensure that ‘paid for content’, is as accessible and as readily available as the ‘free’ content found through a Google search | | Slide 7

8. JISC Collections | | Slide 8 To realize this vision, there are technical problems to be overcome: Authenticated access needs to become easier – currently it is often a tedious barrier to ‘paid for content’ All publishers all need to provide free MARC Records (or the next generation of bibliographic records) to libraries and to expose metadata to the search engines and knowledge bases Publisher platforms need to improve, to enable fast landing on the search results. No-one in this day and age has the patience for 13 clicks to get to page they are looking for

9. JISC Collections | | Slide 9 However, without trivializing the good work that experts are doing in the areas of authentication and resource discovery – the technical issues will be overcome and are relatively easy in comparison to the issues around sustainable business models If publishing (as we know it) and libraries are to flourish and we are to realize the opportunities provided by the digital age – finding a business model that works is both essential an urgent I was lucky to hear two inspirational speakers on the subject of business models for E-books at the 2011 UKGS Conference in the UK

10. JISC Collections | | Slide 10 The BIG Deal! Terry Bucknell the Electronic Resources Manager at the University of Liverpool spoke up for the “Big Deal”(or bundled collection) for e-books The idea of acquiring every book published in a year, by a particular publisher seems odd, and I don’t think any library would do that for print books. The library would rightly think that not every title published by that publisher would be relevant for their users However, Bucknell’s analysis of cost-per use of the Springer Collections in a ‘Big Deal’ purchase model demonstrated it was good value, even though not all of the titles in the bundle had been used Bucknell then used the actual usage statistics for the Springer Collection to calculate what the cost would have been, had the books been acquired using a Patron Driven Acquisition model. The metrics he used indicate that the Patron Driven Acquisition model would have cost much more – and that over time the ‘Big Deal’ model would provide a lower cost per use

11. JISC Collections The Patron Driven Acquisition Model | | Slide 11 In contrast, Rick Anderson from the University of Utah argued that in the digital age, libraries should not pay for any titles that are not used He argued that in the print era, when books and articles were difficult to find and expensive to distribute, it made sense for libraries to build large and expensive, "just-in-time" collections This collection building model transitioned to the electronic environment with the "Big Deal"(for journals), forcing libraries to pay for material that their users do not need or use

12. JISC Collections With library budgets declining and an electronic environment that enables resource discovery, the traditional collections building model ceases to make sense What makes more sense is to respond to users' needs and eliminate waste, by acquiring only the material (books or articles) that they need At the University of Utah, this policy extends not only to electronic content, but also to print, where they have an Espresso Book Machine, to produce print copies on demand | | Slide 12

13. JISC Collections 19 May 2015 | Click: View=>Header&Footer | Slide 13 Although they are taking opposing views on the ‘Big Deal’ versus ‘Patron Driven Acquisition’ model, both are right in their way In the digital world the Patron Driven Acquisition makes sense in term of providing users with what they want – rather than buying a ‘bundle of titles’ of which they may use 80% However, the problem to be resolved is not only the business model – but the price

14. JISC Collections In the UK there is a famous brand of mustard - the firm that make it once claimed that they made their money from the mustard that people waste, not the mustard people actually eat The e-book market is in a similar state. The publisher needs to either sell more e-books or increase the margin on a fewer number of e-books sold The first option can be easier because the buyer gets a sense of getting value for their money, even though some of the e-books they buy end up being wasted | | Slide 14

15. JISC Collections Most Patron Driven Acquisition models work on the basis that a view (or number of views) by users triggers the library purchase of the e-book. For example, 12 single views, or I whole chapter view, or one cut and paste, covert the title to a library acquisition This leads to a number of problems for publisher and library alike: The publisher’s problem is that some books may get no views at all – thus, those that do get acquired have a higher price in order to subsidize the ones that don’t. (In fact this is the model that is used in the print world) One way for the publisher to lessen this problem is to set a low threshold for the number of views that trigger a library acquisition | | Slide 15

16. JISC Collections The library’s problem is a lack of control over budget and a lack of the predictability that comes with library led collections building Indeed many experiments with the Patron Driven Acquisition model have resulted in the library spending the annual allocated budget too quickly – and having to put a stop to all e-book acquisition for the rest of the year The Patron Driven Acquisition Model could work and could provide the library user with access to the e-books they need, when they need them, but the model needs to be calibrated A method is required to allow the library to control and cap overall costs. This will include control of titles by price limit, date of publication, subject categories and classification, and the library needs to be able to apply constraints when needed | | Slide 16

17. JISC Collections Mobile Technology A further challenge to publishers and libraries is the mobile device Increasingly library users have Kindles, iPads and smart phones Users will expect to be able to access e-books on their devices of choice – but how is this going to work? | | Slide 17

18. JISC Collections Schumpeter The economist Schumpeter is often quoted in respect of these new technologies and the way that economic development arises out of the destruction of some prior economic order There is good historic evidence to support this theory in regard to the book publishing business: | | Slide 18

19. JISC Collections In the early 19 th century novels were always published in three volumes, but most families could not afford the guinea-and-a-half (3.90 TRY), these volumes cost to buy In 1840, in the UK, Charles Edward Mudie seized the opportunity provided by the new technologies of his day, rail, steamships and the postal service, to distribute and sell books cheaply He started a subscriptions scheme which meant his customers could loan as many volumes as they liked for an annual fee for one guinea (2.56 TRY) He was so successful that enjoyed a near monopoly and could claim huge discounts, (around 50%) from the publishers (This monopoly was only finally challenged by a newer innovation: the single volume novel) | | Slide 19

20. JISC Collections Amazon is the Mudie of our day, taking advantage of the new technologies of our time, mobile devices and the internet, to distribute and sell e-books cheaply Amazon.com is now selling more Kindle books than paperback books. Since the beginning of the year, for every 100 paperback books Amazon has sold, the company has sold 115 Kindle books. Additionally, during this same time period the company has sold three times as many Kindle books as hardcover books | | Slide 20

21. JISC Collections I am not surprised, I love my Kindle: It is convenient and light, I can take it anywhere with me I can buy books with “one-click” wherever and whenever I want And the e-books are much cheaper than the print equivalents The top selling e-book novel on Amazon costs £1.00 (2.47 TRY) in e-book format as opposed to £9 (22.27TRY) in hardback or £8 (19.79 TRY) in paperback format. The same is also true for textbooks, for example Abnormal and Clinical Psychology: An Introductory Textbook is available in e-book format at £17.37(43.TRY) as opposed to £35 (86.66 TRY) in print format | | Slide 21

22. JISC Collections A Business to Consumer Model So – we do have an e-book model that works – but it is a Business-to- Consumer model There is no place for the library in this business model Indeed, in the UK in February 2011 HarperCollins has announced that new eBook titles licensed to public libraries can only be circulated 26 times before the license expires The development has led to much anger among librarians, who up until now have been able to lend any e-books as often as they like – just as they do with print copies | | Slide 22

23. JISC Collections The UK Publishers Association (PA) has just announced a clampdown, informing [public] libraries they may have to stop allowing users to download eBooks remotely and instead require them to come to the library premises, just as they do to get traditional print books – arguably defeating the object of the book Richard Mollet, Chief Executive, the Publishers Association said: “Ultimately, the activities of selling and lending have to be able to co-exist with neither unduly harming the other. If e-book lending were untrammelled (as some comments seem to propose) it would pose an extremely potent threat to the retail market which in the long-term would undermine the ability of authors, and the companies which invest in them, to see a reward for their creativity.” | | Slide 23

24. JISC Collections The same issues apply in the world of academic libraries In the UK the dominant business model for text books is the based on student purchase Publishers do not believe access (free at the point of use) via the library, can co-exist or complement the traditional student-purchase model | | Slide 24

25. JISC Collections national e-books observatory project As I mentioned earlier, the second objective of the e-books observatory project was to analyse the impact of the free at the point of use e-books upon publisher sales We monitored the sales of the 36 e-books that were available to all the students of the 150 institutions across the UK for the year of the project We found that that there was no negative impact on sales The publishers were sceptical, and still refuse to make many text books available in e-format to libraries Many libraries in the UK would like to provide e-books to their users in formats which they could download onto mobile devices Will publishers allow this now that they have the ability to sell direct to students through Amazon with a ‘one click’ purchase? | | Slide 25

26. JISC Collections What is the business models for E-books? So, in summary: Libraries face many challenges in providing the e-books their users increasingly expect Libraries face even greater challenges in providing e-books to users on the mobile devices which are becoming ubiquitous The market place is undecided – the Patron Driven Acquisition Model or the Big Deal? New technologies make publishers nervous and so they restrict the range and type of e-books that are available to libraries | | Slide 26

27. JISC Collections THE FUTURE I very much hope that we can work with publishers to provide our users with the information they need via the library. If this can be achieved both libraries and publishers will remain relevant to the new generation of library users I very much hope we do not have libraries of the future where Kindles and iPads are chained to the shelves as volumes once were – and where few users ever go because while publishes and libraries were arguing Google seized the moment and “organised the world‘s information”... | | Slide 27