Publishers, Libraries and the Licensing of eJournals and eBooks

Steven Hall, Pratt-SILS Summer School on E-Publishing, UCL, 19 June 2008

Agenda Why license? Journal licensing – the ‘Big Deal’

What does the Big Deal mean for publishers? What does the Big Deal mean for libraries? What are the impacts on the scholarly information market? Future scenarios

Book licensing Current state Why books are different to journals, and some books different

to others Questions

Why license? Copyright law and community norms

Well established in the print environment ‘Fair use’ and ‘Fair dealing’ well understood Established practices in the print environment for ILL, copying

for course packs, etc Digital copying, storage and transmission much easier, less

visible Digital publishing ahead of copyright legislation Licensing long accepted for databases, other electronic

resources, software, etc

Why license? Pushing at the boundaries

Cornell University E-Reserves http://www.copyright.cornell.edu/policy/Copyright_Guidelines.pdf

Subito BL Direct Piracy and fraud

SERU ‘Shared Electronic Resource Understanding’ – NISO initiative http://www.niso.org/workshops/seru

Journal licensing and the Big Deal Background

State-wide and consortium licensing in the USA of databases, especially aggregated journal databases

Licensing in the UK, Australia etc of full-text databases JISC and the NESLi (National Electronic Site Licence) agreement

Current take-up Licensing of the Big Deal is the rule, not the exception Elsevier Big Deal with 90% of ARLs; Wiley 83%; Springer 77% (

http://www.uksg.org/sites/uksg.org/files/jill_emery_rick_anderson.pps)

Similar levels of penetration throughout the library world Similar licensing to Government, commerce, hospitals, etc

Journal licensing and the Big Deal Some notable exceptions

Stanford, Wisconsin-Madison... Several flavours of the Big Deal

Wide variety of licensing options available Different deals from different publishers Leasing v. perpetual rights

Why do publishers offer a Big Deal? Why do publishers...

Encourage libraries to benefit from lower annual price increases on their journal subscriptions?

Tie themselves into multi-year deals which limit their ability to sell new subscriptions and increase prices?

License very large packages of journals at huge discounts on their list prices?

Increase their sales and marketing costs to promote and sell the Big Deal?

Why do publishers offer a Big Deal? Stability and predictability of income Better renewal rates Income growth through licensing of additional access

Packages, collections, tokens, etc Wider reach and readership through additional licensing Greater usage of non-core journals Improved Impact Factor - possibly

Why do publishers offer a Big Deal? Sources of journal income

Institutional subscriptions and licensing Personal subscriptions Member subscriptions Advertising, supplements, reprints, etc Secondary rights Backfiles sales Back issues sales PPV Page charges, etc Pay-to-publish fees

Two notional (and simplified) journal income models Publisher income without a Big Deal

$400M of journal income, of which $300M institutional Renewal rate of 95%; annual price increase of 8% $300M renews as $307.80M

Publisher income with a Big Deal $400M of journal income, of which $300M institutional $150M under Big Deals, $150M unprotected Renewal rate of 95% on unprotected and 99% on Big Deals Annual price increase of 8% on unprotected and 5% on Big

Deals $300M renews as $309.83M Plus income from additional licence fees, say $15-30M

Why do libraries take up the Big Deal? Why do libraries...

Commit to multi-year licensing agreements? Agree to annual price increases above the rate of inflation? Accept terms and conditions which prevent them cancelling

low-use journal subscriptions? Reduce their flexibility? Pay even more to license packages of journals to which they

have never subscribed? Transfer spending from books to journals?

Why do libraries take up the Big Deal? Stability and predictability of expenditure Lower annual price increases on core journal

subscriptions Low-price access to many more journals Greatly increased usage of journal collections

Lower cost per download Demand from faculty and students for access to more

journal literature Support for interdisciplinary research Lower ILL costs

ARL Statistics 2005-2006

Year Total Expenditure

Serials Expenditure

Serials Purchased

Unit Cost Proportion of Total Expenditure

1986 $8,361,092 $1,496,775 15,775 $89.81 17.90%

1996 $13,870,378 $3,389,118 14,723 $223.98 24.43%

2006 $21,694,210 $6,307,292 23,849 $251.38 29.07%

Median Values for Time-Series Trends

UK Library Statistics. 2007 Update.

Year Total Acquisitions Expenditure

Serials Expenditure

Serials Purchased

Unit Cost Proportion of Total Acquisitions Expenditure

1995 £101,085,000 £54,011,000 533,000 £101.33 53.43%

2005 £173,821,000 £96,101,000 1,200,000 £80.08 55.28%

University Library Spending on Books, Journals and Electronic Resources. 2007 Update. Publishers Association, May 2007.

Does the Big Deal offer good value to libraries? Librarians have to make this judgement, but...

Huge take-up across the world suggests that most librarians believe it offers good value

Librarians are willing to trade some flexibility in their purchasing for lower price increases and access to more content

Small and medium libraries benefit significantly from greatly increased access to journal literature, at relatively low additional costs in the context of consortium agreements

There is good evidence that packages of additional journals are well used, driving down cost-per-use Unpublished JISC study, publishers’ own research

Impacts on the market Stasis

Large part of library expenditure is tied up with a relatively small number of large publishers

Less flexibility in switching expenditure, especially to non-journal products, and to smaller publishers

Difficulty of launching new journals Perceived ‘disempowerment’ of librarians Possible impact on aggregators

Are aggregated journal databases still needed? Lack of an exit strategy

What happens if a library wishes to withdraw from a Big Deal, after several years of capped price increases?

Longer-term issues Continuing divergence between standard publisher price

increases and library budget increases Journal prices: 7-9%, driven by inflation and increased research

output Library budgets: 2-3%, and a decreasing proportion of

university budgets Transition to e-only

Will publishers save any costs and, if so, will they pass on any of the savings?

Open Access Growth in funded OA; politics; zealotry

The UC way forward...The Promise of Value-based Journal Prices and Negotiation: A UC Report and View Forward University of California Libraries’ Collection Development Committee.January 2007 Abstract In pursuit of their scholarly communication agenda, the University ofCalifornia ten-campus libraries have posited and tested the case that ajournal’s institutional price can and should be related to its value to theacademic enterprise. We developed and tested a set of metrics that comprise“value-based pricing” of scholarly journals. The metrics are the measurableimpact of the journal, the transparent measures of production costs, theinstitutionally-based contributions to the journal, such as editorial labor, andthe transaction efficiencies from consortial purchases. Initial modeling anduse of the approaches are promising, leading the libraries to employ and furtherdevelop the approaches and share their work to date with the larger community.http://libraries.universityofcalifornia.edu/cdc/valuebasedprices.pdf

Licensing of ebooks Books are different to journals

Books are generally not sold on subscription (though book series may be sold on standing order)

An established journal’s content, size and even usage are relatively predictable; libraries can put a value on it before purchasing. The journal’s brand guarantees a certain quality and coverage of a specific niche.

A publisher’s annual output of books is far less predictable and quality depends on authors more than publisher brands.

Books are purchased differently than journals, eg on approval plans, etc

Licensing of ebooks Books are less homogeneous than journals

Scholarly reference works, eg Grove Music and Art, Blackwell Encyclopedia of Management, Oxford Companion to American Literature, handbooks, etc Most such major reference works already available online though

print still outsells digital Text books

Bought primarily by students, not libraries. Some experiments underway by major text book publishers but no proven model yet for licensing by institutions

Monographs Most current activity in this area

An immature market Publishers

Some large publishers making most or all of monograph output available in both print and digital formats, eg Elsevier, Springer, Wiley; other large publishers making no monographs available in digital form yet

Publishers still testing different sales models, eg licensing of individual titles (Wiley) and licensing only in collections (eg Oxford Scholarship Online); publishers also testing different pricing models, eg site licensing at same price as print, concurrent user pricing, discounting for bulk purchases, etc

Models used for backlist may not be appropriate to front list Publishers also testing sales channels, eg direct and via

intermediaries

An immature market Intermediaries

Booksellers and library suppliers still gearing up to handle ebook sales

Role of intermediaries in supply chain not clear until sales models are firmed up, eg individual titles (making intermediaries essential) or collections

Aggregators (eg MyiLibrary, netLibrary, ebrary, etc) have had several false starts and are still testing business models, etc, with both publishers and libraries

An immature market Libraries

Demand from libraries is now growing. Some, eg Toronto, have made a big commitment to ebooks based on the success of ejournals

Some libraries buying in bulk where there is a clear cost benefit

Most libraries looking for more flexibility than with journals No consensus yet on platforms, sales models, etc General view that many publishers are not themselves yet

geared up to sell ebooks effectively

Big Deals for ebooks? Reference publishing will become predominantly digital Monograph publishing will become largely digital, but

over a longer period of time Purchasing of monographs will remain selective, though

there may be ‘Small Deals’ for the lists of niche publishers or for the output of larger publishers in specific disciplines

The future roles of aggregators, booksellers and library suppliers is unclear; much will depend on the standardisation of pricing models, terms of sale, formats and delivery platforms

There are not the same drivers for the Big Deal as with journals

Questions?