Beware Publishers Bearing Gifts Why the ‘Big Deal’ is a Bad Deal for Universities

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

2. Summary • Value chain • Creation, publication, aggregation, access, use • Where the money goes • Economics of electronic publishing • The Big Deal - advantages, dangers • A way forward? Beware Publishers IATUL 2003

3. Acknowledgement Business Models for Distribution, Archiving and Use of Electronic Information: Towards a Value Chain Perspective: A Study for ECUP+ Mark Bide, 1998 Beware Publishers IATUL 2003

4. The Value Chain: Concepts • Authority • Branding • Monopoly • Product-to-service shift Beware Publishers IATUL 2003

5. The Value Chain: Creation • Author or compiler • Employed by publishers or independent agents • Creator confers authority • Author as monopolist Beware Publishers IATUL 2003

6. The Value Chain: Publication • Selection and editing of information into consumable form • Authority - from imprint e.g. OUP • from brand/title e.g. British Medical Journal • Monopoly transferred from creator Beware Publishers IATUL 2003

7. The Value Chain: Publication - electronic • Authority diluted? • Physical realisation deferred to end of chain - at point of use • Libraries buy access - a service not a product Beware Publishers IATUL 2003

8. The Value Chain: Aggregation • Bringing together in a coherent collection disparate information sources • Libraries confer authority by virtue of selection • Libraries are in control of budgets by selecting individual titles • Traditional near monopoly for libraries Beware Publishers IATUL 2003

9. The Value Chain: Aggregation - electronic • No physical product • Aggregation role moves elsewhere - to publisher or intermediary • Library monopoly lost Beware Publishers IATUL 2003

10. The Value Chain: Access • Core library activity • Near monopoly for printed • Authority Beware Publishers IATUL 2003

11. The Value Chain: Access - electronic • Library monopoly lost - network connectivity • Authority of intellectual access/ organisation Beware Publishers IATUL 2003

12. The Value Chain: Use • Even with printed materials a service not a product • Measuring usage • Measuring value for money Beware Publishers IATUL 2003

13. The Value Chain: Use - electronic • First physical realisation • Accurate measurement of usage • Value for money? Beware Publishers IATUL 2003

14. Where Does the Money Go? • Popular fiction – to the author • Academic works – to the publisher • S&P Top 500 (1997) • Reed/Elsevier 27th highest net profit margin • Wolters/Kluwer 18th highest return on equity Beware Publishers IATUL 2003

15. Why Are Academic Publishers Rewarded? • Not for dissemination • Easy electronic alternatives • Intermediaries very poorly rewarded • Serials agents’ margin 6-7% • For validation • Creating the scholarly record • Peer review, quality assurance Beware Publishers IATUL 2003

16. Distorting Factors • High indirect rewards of publication – for academics; for institutions • Academic sector has vested interest in commercial scholarly publishing • No direct payment by user – price does not affect demand • Academics never place a value on publication or use • Result – unchecked inflation Beware Publishers IATUL 2003

17. The Power of Consortia? • Most effective when there is competition – booksellers/serials agents • 7 UK HE regional consortia • Books/serials contracts over $100m p.a. • Large discounts on books • High-quality service + innovations • Diminished by: monopoly suppliers, looking-glass economics, product-to-service shift Beware Publishers IATUL 2003

18. Looking-Glass Economics of the Must-Have Journal • Hard-copy price cut by 50% • Some 2nd copies sold • Some new subscribers • But not 100% more • Generally libraries will spend savings on other journals • Result: lost profitability, decreased market share Beware Publishers IATUL 2003

19. Looking-Glass Economics of the Must-Have Journal/2 • Hard-copy price is doubled • Some subscriptions lost • But not 50% - a must-have title • Other titles will be cut • Result: increased profitability, increased market share Beware Publishers IATUL 2003

20. The Must-Have Publisher • Same logic holds for e-journals • It does not make commercial sense for publishers to discount to consortia • Hence additional content instead of lower prices – the Big Deal • Hence must-have publishers Beware Publishers IATUL 2003

21. Product-to-Service Shift • Hard-copy content is unchanging, for all, for ever • Access to e-content is: • Time-limited • Archival rights? • Content changes? • Restricted access rights Beware Publishers IATUL 2003

22. The Big Deal - What is it? • Access to all of a publisher’s current titles, with some back-files • 3-5 year licence • Based on previous print subscriptions? • Annual inflation increases • No-cancellation clauses? Beware Publishers IATUL 2003

23. The Big Deal - Advantages • Users - get more content • Libraries - predict inflation; save on document delivery budgets • Publishers - stable income Beware Publishers IATUL 2003

24. The Big Deal - More Content? • Sweet-shop syndrome • 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 • 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) Beware Publishers IATUL 2003

25. The Big Deal - Dangers • Death of collection management? • Subscription decisions at publisher level • Can we not subscribe? • Non-big deal subscriptions suffer • Higher impact factors because of availability - undermine other journals • Publisher’s monopoly is intensified; national big deals exacerbate further Beware Publishers IATUL 2003

26. A Way Forward? • Specify what you want, determine your budget/price, then go to market • Need strength of a consortium • Consultation, specification, tender, contract management • Retain budgetary control by selection • Create favourable business models • Support alternative publishing Beware Publishers IATUL 2003

27. The Little Porridge Pot • A good servant but a bad master • The lesson is to retain control, not to let our servants control us Beware Publishers IATUL 2003