1. Beware Publishers Bearing Gifts Why the ‘Big Deal’ is a Bad Deal for Universities DAVID BALL Bournemouth University (Chair, Procurement for Libraries) dball@bournemouth.ac.uk

2. Beware Publishers IATUL 20032 Summary n Value chain –Creation, publication, aggregation, access, use –Where the money goes n Economics of electronic publishing n The Big Deal - advantages, dangers n A way forward?

3. Beware Publishers IATUL 20033 Acknowledgement Business Models for Distribution, Archiving and Use of Electronic Information: Towards a Value Chain Perspective: A Study for ECUP+ Mark Bide, 1998

4. Beware Publishers IATUL 20034 The Value Chain: Concepts n Authority n Branding n Monopoly n Product-to-service shift

5. Beware Publishers IATUL 20035 The Value Chain: Creation n Author or compiler n Employed by publishers or independent agents n Creator confers authority n Author as monopolist

6. Beware Publishers IATUL 20036 The Value Chain: Publication n Selection and editing of information into consumable form n Authority - from imprint e.g. OUP n from brand/title e.g. British Medical Journal n Monopoly transferred from creator

7. Beware Publishers IATUL 20037 The Value Chain: Publication - electronic n Authority diluted? n Physical realisation deferred to end of chain - at point of use n Libraries buy access - a service not a product

8. Beware Publishers IATUL 20038 The Value Chain: Aggregation n Bringing together in a coherent collection disparate information sources n Libraries confer authority by virtue of selection n Libraries are in control of budgets by selecting individual titles n Traditional near monopoly for libraries

9. Beware Publishers IATUL 20039 The Value Chain: Aggregation - electronic n No physical product n Aggregation role moves elsewhere - to publisher or intermediary n Library monopoly lost

10. Beware Publishers IATUL 200310 The Value Chain: Access n Core library activity n Near monopoly for printed n Authority

11. Beware Publishers IATUL 200311 The Value Chain: Access - electronic n Library monopoly lost - network connectivity n Authority of intellectual access/ organisation

12. Beware Publishers IATUL 200312 The Value Chain: Use n Even with printed materials a service not a product n Measuring usage n Measuring value for money

13. Beware Publishers IATUL 200313 The Value Chain: Use - electronic n First physical realisation n Accurate measurement of usage n Value for money?

14. Beware Publishers IATUL 200314 Where Does the Money Go? n Popular fiction – to the author n Academic works – to the publisher n S&P Top 500 (1997) –Reed/Elsevier 27 th highest net profit margin –Wolters/Kluwer 18 th highest return on equity

15. Beware Publishers IATUL 200315 Why Are Academic Publishers Rewarded? n Not for dissemination –Easy electronic alternatives –Intermediaries very poorly rewarded –Serials agents’ margin 6-7% n For validation –Creating the scholarly record –Peer review, quality assurance

16. Beware Publishers IATUL 200316 Distorting Factors n High indirect rewards of publication – for academics; for institutions –Academic sector has vested interest in commercial scholarly publishing n No direct payment by user – price does not affect demand –Academics never place a value on publication or use n Result – unchecked inflation

17. Beware Publishers IATUL 200317 The Power of Consortia? n Most effective when there is competition – booksellers/serials agents n 7 UK HE regional consortia –Books/serials contracts over $100m p.a. –Large discounts on books –High-quality service + innovations n Diminished by: monopoly suppliers, looking- glass economics, product-to-service shift

18. Beware Publishers IATUL 200318 Looking-Glass Economics of the Must-Have Journal n Hard-copy price cut by 50% –Some 2 nd copies sold –Some new subscribers –But not 100% more n Generally libraries will spend savings on other journals n Result: lost profitability, decreased market share

19. Beware Publishers IATUL 200319 Looking-Glass Economics of the Must-Have Journal/2 n Hard-copy price is doubled –Some subscriptions lost –But not 50% - a must-have title n Other titles will be cut n Result: increased profitability, increased market share

20. Beware Publishers IATUL 200320 The Must-Have Publisher n Same logic holds for e-journals n It does not make commercial sense for publishers to discount to consortia n Hence additional content instead of lower prices – the Big Deal n Hence must-have publishers

21. Beware Publishers IATUL 200321 Product-to-Service Shift n Hard-copy content is unchanging, for all, for ever n Access to e-content is: –Time-limited –Archival rights? –Content changes? –Restricted access rights

22. Beware Publishers IATUL 200322 The Big Deal - What is it? n Access to all of a publisher’s current titles, with some back-files n 3-5 year licence n Based on previous print subscriptions? n Annual inflation increases n No-cancellation clauses?

23. Beware Publishers IATUL 200323 The Big Deal - Advantages n Users - get more content n Libraries - predict inflation; save on document delivery n Libraries - predict inflation; save on document delivery budgets n Publishers - stable income

24. Beware Publishers IATUL 200324 The Big Deal - More Content? n Sweet-shop syndrome n North Carolina Science Direct statistics: –28% of titles = 75% of downloads –34% of titles have 5 downloads or less –57% of titles - 40% of usage in 1 month n Emerald study (Ingenta Institute): –47% of users view 1 title of 118 –40% of users view 2-5 titles –44% of subscribers view 1 subject (of 10)

25. Beware Publishers IATUL 200325 The Big Deal - Dangers n Death of collection management? –Subscription decisions at publisher level –Can we not subscribe? n Non-big deal subscriptions suffer n Higher impact factors because of availability - undermine other journals n Publisher’s monopoly is intensified; national big deals exacerbate further

26. Beware Publishers IATUL 200326 A Way Forward? n Specify what you want, determine your budget/price, then go to market n Need strength of a consortium n Consultation, specification, tender, contract management n Retain budgetary control by selection n Create favourable business models n Support alternative publishing

27. Beware Publishers IATUL 200327 The Little Porridge Pot n A good servant but a bad master n The lesson is to retain control, not to let our servants control us