Big Deals and Alternative Business Models Lorraine Estelle

1. Big Deals and Alternative Business Models Lorraine Estelle LERU (League of European Research Universities) 28 November 2011

2. It’s not the model its the cost

3. Background The year 1993 saw the introduction of the Pilot Site Licence Initiative, perhaps the first ‘Big Deal HEFCE and Academic Press agreed a multi-journal, multi-year licence to provide all UK higher education institutions with free-at the point of access to all the publishers’ journal titles

4. The introduction of the Big Deal was a solution for publishers trying to tackle the problem of attrition resulting from the continual rise in journal prices “We are trying to jump out of the subscription spiral where library funding goes down and, subsequently prices go up, so subscriptions drop even further” Vincent Cassidy, Academic Press, 1995

5. Very soon, other publishers and library consortia around the world were doing their own Big Deals. Technology was perhaps the real driver for change The following quotation is from Terry Morrow who ran the JISC funded Bids datacentre that delivered the Academic Press content to the UK HE community:

6. “In the context of all the published titles available to the research community, this is a relatively small number. But the seductive prospect of being able to have on ones own screen or local printer the full text of a selected article, including photographs, tables, and graphs, at the press of a few keys without (in the case of members of UK HEIs) any form of payment, may well make the service disproportionately attractive. Certainly, it has been the experience of the BIDS ISI database service that the 7,500 titles covered by ISI get more attention than they might otherwise.” (my italics) Terry Morrow, 1997(?), Journals Online: An Electronic Publishing Service for Higher Education and Research,www.isoc.org/inet97/proceedings/G1/G1_1.HTM

7. The benefits to research were quickly obvious: • Desk top access to large amounts of scholarly material – and academic were certainly not going to complain about that opportunity • Libraries welcomed the model because of greater access and small libraries particularly benefited through access to a large number of titles to which previously they could not afford • Large publishers liked it because it reduced attrition, resulted in additional e-fee income, and locked libraries into multi-year agreements with built in annual price increases

8. In 2008, the Journals Working Group commissioned Evidence Base to evaluate NESLi2 deals in comparison with a title-by-title selection • They found that not only were the deals good value, in that previously unsubscribed titles were well used, but also that access to the Big Deal seemed actually to stimulated use

10. More access more use The Big Deal has clear benefits to all the stakeholders: • More access to more research • Wider access across the higher education community • Trends across publishers and institutions show that year on year use is increasing and thus although prices have risen, cost per download decreasing quite dramatically.

11. However, as we all know there disadvantages: • Inability of libraries to shape collections • Less flexibility to respond to budget cuts : “In Britain, 65% of the money spent on content in academic libraries goes on journals, up from a little more than half ten years ago.”Economist May 26th 2011 • Some content is not used and some journals in a deal are more valuable than others • Difficulties for small journal publishers and monograph publishers to sustain sales in this environment • Which in turn increases the market power of a small number of large publishers

12. So what are the alternatives to the Big Deal and will they address the problems? There are a number of alternatives, but none addresses the problem of the high cost of journals The high cost of journals is a consequence of continual increase in the number of articles published each year, the uncompetitive nature of the market place, and the result of market power The academic community will face those issues irrespective of the business model

13. Title-by-title selection? • Addresses the problem of flexibility, but... • Poor return on investment. The same money would buy less and cost per download would increase • In addition, it hardly seems a feasible option in the modern world, where researchers are used to having large amounts of literature, and instituions are increasingly required to compete with each other

14. “just in time”? • In contrast to that restricted approach, Rick Anderson Director of Resource Acquisition, University of Nevada, has argued strongly for a “just in time” rather than just in case approach. • In a digital world, patrons should be able to see all the content they might want and the library would only pay for the articles that patrons actually used, thus eliminating the waste in the present system.

15. The problem of the metre ` Makes sense, particularly as resource discovery improves But brings how would the library control the costs? The library would have to keep “feeding the metre”, or access to everything would be lost. Libraries would have to restrict what their patrons could see, for example by restricting the range of journals by subject or date, but then libraries would be once again making “just in case decisions”

16. The other elephant in the room • Gold open access • There seems to be a surprisingly marked change in the behaviours of some of the traditional journal publishers, who are now beginning to experiment with open access models • Nature Publishing Group and Wiley-Blackwell announced that they are launching fully open access journals. • APS, Elsevier, IoP and Springer declare intention to participate in a SCOAP3.

17. The problem of cost • Does not address the problem of cost, particularly if the market place remains uncompetitive and the market power held by relatively few players. • There is no firm evidence to suggest that gold open access overall would cost institutions less and it would cost some research-intensive institutions significantly more than subscriptions to Big Deals. (Cost of course is not the same as cost benefit – in this context; I am only addressing the direct financial cost to certain institution)

18. Pricing metrics • Whatever the longer-term changes, in the shorter term there is likely to be a change in the metrics used to price the Big Deal • For many years librarians have pointed out the issues with a subscription model based on historic print spend, many citing it as the root problem for the high and ever increasing cost of the Big Deal • While it is odd, it is not the reason why the cost of the Big Deal has far outstripped inflation

19. The problem of winners and losers • ACS pricing model that assigns customers to specific tiers using objective, relevant criteria, to ensure that like customers pay like amounts for their subscriptions • Value-based metrics such as GNP, number of articles published, ISI impact factor, and total downloads • The problem with the introduction of these models is that they cause major swings in pricing for individual institutions

20. In 2010, John Cox study for JISC Collections • This study looked at all the metrics for alternative pricing that publishers are currently exploring, usage of course being one metric • Whatever the metrics used, and however weighted, the results are that large research intensive institutions are likely to pay much more than they do currently, while smaller teaching focused instituions are likely to pay much less

21. The problem of fair • While “fair” such pricing models will result extreme winners and losers. • Publishers will be looking for the same overall revenue from a consortia. The other potential problem with any metric including usage is the same lack of flexibility

22. Technological developments – a driver for change (for better or worse) • As in 1992, technology not business models will be the real driver for Researchers not only want to read journal articles but also to run programmes that will mine vast amounts of literature to discover previously latent connections or facts:. • In order to enable open data mining, publishers must expose their entire literature to robot crawlers, and this has led some to argue that data mining is the most important driver for change to an open access model

23. Government response to the Hargreaves Report • Publishers have anticipated that issue and are developing business models that separate content from the tools to mine and exploit the content for research purposes • In August this year, commenting on today’s government response to the Hargreaves Report on Intellectual Property Richard Mollet Chief Executive of The Publishers Association said:

24. “market-based solutions” “The Government’s acceptance of Professor Hargreaves’ recommendation to create exceptions for data mining is deeply concerning.  Research shows that over 90% of publisher respondents grant research-focused permission requests to mine data.  The research findings show that content mining is due to increase exponentially, and is something that is actually embraced by publishers – contrary to the Hargreaves report’s assertions. The Hargreaves Review did not conduct any economic impact assessment of this proposal.  If it had, it would have found that the proposal of a blanket exception is unnecessary, given the market-based solutions which are already in operation; and they would have identified the potential for economic harm created by the uncertainly, lack of clarity and opportunity for infringement which an exception creates.” (my italics)

25. Assessment, organization, and the reuse of ideas Also this year Youngsuk Chi of Elsevier said: “publishers have behaved a bit like hunter-gatherers of research. They are trying to become information providers. That means investing in search and data-management tools to make sure relevant articles find their way to researchers.” It is not only “subscription” publishers that can see this opportunity. PloS recently published a broader mission to: “Develop innovative approaches to the assessment, organization, and reuse of ideas and data”

26. A hook? Some see the development of such tools as an initiative that will further lock libraries into the “Big Deal”: “If publishers can hook academics on such innovations, and drive them to articles in relatively obscure journals, dropping big deals will seem a lot more painful” The Economist, May 26th 2011 Of goats and headaches One of the best media businesses is also one of the most resented http://www.economist.com/node/18744177

27. Vanilla product and value add The development of these tools is not necessarily linked to the Big Deal Publishers may sell their content through subscription charges or charge authors process charges in order to create content – but the content itself may become the “vanilla” product. The “value-add” and high(er) income coming from the power tools and applications sold to researchers

28. Not bells and whistles but the future? Either way it could be argued that publishers with operating-profit margins as high as 36% should be investing in these innovations These are not “bells and whistles” but the technology that has the potential to unlock and organise hidden knowledge and enable data driven research Perhaps we should stop focusing on the Big Deal and focus on cost and potential of technology

29. Resources Thank You 22 September 2014|JISC Collections SILS-PRATT | Slide 29