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Pricing the Package ASA Conference – 26-27 February 2007

Pricing the Package ASA Conference – 26-27 February 2007. Nick Evans , Chief Operating Officer, ALPSP Tamsyn Honour , Business Development Manager, Swets. Packages. A package is: “Something consisting of various components” v. “To bundle something” Source: Wiktionary. Why package content?.

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Pricing the Package ASA Conference – 26-27 February 2007

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  1. Pricing the PackageASA Conference – 26-27 February 2007 Nick Evans,Chief Operating Officer, ALPSPTamsyn Honour,Business Development Manager, Swets

  2. Packages A package is: • “Something consisting of various components” • v. “To bundle something” Source: Wiktionary

  3. Why package content? Two basic principles: • Maintain the value of existing sales • Increase revenue … And what is the best way to price it?

  4. Pricing creativity & complexity Swets holds over 2 million price entries, updated annually. Options include: • Regular subscription prices • Tiered prices differing per publisher, based on e.g.: • Type of customer • Type of institution • Number of (relevant) FTEs • Carnegie classification • Usage • Bundled prices • Archive prices • Deep Discount Prices • Membership prices • Consortia prices • One year vs multiple year prices • Special prices for developing countries … & the list goes on!

  5. Publisher 5-year forecast • Strong trend towards e-only: in 2011 45% of publishers’ business will consist of e-only products, P+E will decrease from 25% in 2006 to 11% in 2011. • Individual subscriptions remain, though the share in publishers’ turnover will decrease from 81% in 2006 to 58% in 2011. • The share of customised deals in publishers’ turnover is expected to triple to 15% within 5 years. In 2011, 62% of all STM publishers will have business from customised deals (up from 55%) • More publishers will offer e-packages of their own content (38% in 2006 and 57% in 2011) • The percentage of e-only deals that come in via agents is expected to increase from 35% to 48% in 2011. • Trends towards e-books, open access publication and usage based pricing continue Source: “Subscription Management in an Electronic World”, Swets Publisher Survey April 2006

  6. Value of bundle sales? Based on 2006 subscriptions through Swets… • 1,799 different bundles available • Average bundle subscription price 14 times higher than ‘regular’ average subscription price • Most expensive bundle - €4.9 million • Cheapest bundle - €14.63 Swimming World and Junior Swimmer, Swimming Technique & Swim Magazine!

  7. What is taken into account? • Market Potential • Characteristics of the bundle • Mix of established & new journals • Value of the new content • In relation to average expenditure per customer

  8. Pricing categories Based on the market approach taken by publishers, we could grouppricing models into two categories: • Conservative • Adventurous But maybe it’s even more complicated than that . . . • A multitude of pricing models • Plus combinations of models - many publishers use four, five or six of the standard models

  9. Complicated choices? Scholarly Publishing Practice, 2nd Survey, John & Laura Cox, ALPSP 2006

  10. But not all publishers are the same…

  11. Non-profits & commercial

  12. No. of years No. of publishers Percentage 1 42 44.2% 2 13 13.7% 3 38 40.0% 4 0 0.0% 5 0 0.0% 6 2 2.1% Other variables Number of years of a typical agreement + Price caps, content to be licensed (including non-journal material), access to back volumes, local hosting

  13. Adventurous Pricing Models • Based on results of a profound analysis of existing sales incl. • Averages sales per customer • Market share per market segment • Average sales per customer within segment • Average duplicate subscriptions per journal • Designed to replace & increase existing revenues • Presented as a model completely unrelated to sales 2 subcategories :- • Population based models • Pick & Choose

  14. Pull rather than push? ‘Value-based’ pricing from University of California • Produced by task force of ten librarians • Effort to overcome “high” journal prices to develop a model that produces prices in line with institutional capacity • Used recent journal cost effectiveness research (Bergstrom & McAfee) (www.journalsprices.com) • Covers 6,900 journals – B&A combined a journal’s price-per-citation and price-per-article to create a “Composite Price Index” • The task force compared that index with median composite price index for nonprofit journals to create a relative . . . . . and so on Can a customer-drive model drive large-scale licensing, instead of “market forces”?

  15. Small/medium publishers left out?

  16. ALJC • Cross publisher package: A unique and straightforward way to acquire a wealth of content from multiple publishers • Value for money: An affordable and flexible solution offering key, high quality electronic content • Simplicity: A single order, license, pricing model, invoice and point of contact • Back access from 1997 at no extra cost • Instant Access: Access activated within 24 hours • Multi-year license agreements: Fixed annual price increase • An initiative of smaller- and medium-sized publishers • Special consortia arrangements available

  17. Contacts Nick Evans, ALPSP nick.evans@alpsp.org Tamsyn Honour, Swets thonour@uk.swets.com

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