1. Lessons from Ejournal Big Deals: A Cautionary Tale Beyond Print E-book Summit TRLN August 22-23, 2011 Ivy Anderson California Digital Library ivy.anderson@ucop.edu

2. A funny thing happened on the way to the wedding… (a cautionary tale indeed!)

3. Context-setting Business models License terms What have we learned?

4. Context E-books are finally reaching the mainstream – Drivers: Google Books, Amazon Kindle… University presses struggling toward sustainability A plethora of sales models – Publisher and aggregator packages, approval plans, DDA/PDA… Publishers want dependable income (via packages or approval), just like journals Critical mass + major new university press initiatives = opportunity to shape service offerings What can experience with journals teach us?

5. Business Models

6. To bundle or not to bundle?

7. Do bundles save money??

8. Yes – and No Bundled journals have increased value for libraries and (especially) consortia through – Greatly expanded access – Lower unit cost and cost-per-use – Capped prices

9. Unit costs have declined and availability has increased since the advent of the big deal

10. Consortial cost control based on historical overlap Multipliers derived from historical purchasing patterns – 10 UC campuses: average journal overlap within publishers a fraction of that number Selected niche disciplines have even lower negotiated multipliers (e.g. vet med, dentistry) The systemwide journals licensed at UC would cost the University more than four times what we currently spend if independently licensed by each campus at list price. Transferable to ebooks: – Major ebook package: print overlap within subjects ranged from 1.1 to 3.4, with an average of <3 – Average title coverage within subject packages was 70-80% – Access to all content at all campuses negotiated in light of that distribution

11. Big deals are efficient No need for title-by-title decision-making Access to the long tail without ILL transactional overhead and cost Big deals are the closest thing to open access

12. Libraries support OA and enter into Big Deals for some of the same reasons: To reduce the overall cost of the scholarly publishing system – by placing market pressure on high price publishers – by seeking more sustainable publishing models To maximize the amount of information available to their users despite limited budgets Because faculty want it To support broader uses – – library-oriented uses: instruction, e- reserves, ILL – Transformative uses: data mining, e- science To help the academy regain control of the dissemination of scholarship As a public good To reduce the overall cost of the scholarly publishing system – by placing market pressure on high price publishers through negotiation – by seeking a more sustainable unit cost To maximize the amount of information available to their users despite limited budgets Because faculty want it (the content) Missing from this equation: – Broader use, public good, control of the publishing enterprise – Budgetary control and flexiblity Open Access Big Deals

13. Marginal value comes at a price Ebook big deals threaten to turn monographic budgets into serials budgets Large fixed expenditures are like floating icebergs – with no room to navigate The long tail effect = decreasing marginal benefit – 50% of Publisher X journals = <600 uses at UC – 80/20 rule

14. Meanwhile, absolute costs for serials have continued their relentless climb – and suppressed monographic purchasing

15. ebook usage at UC: 25% of titles = 1 or fewer uses 50% = 15 or fewer

16. What happens when you leave (or scale back) the journal big deal: Usage Southern Illinois, Carbondale: “Leaving the Big Deal: Consequences and Next Steps” http://opensiuc.lib.siu.edu/morris_confs/14/ http://opensiuc.lib.siu.edu/morris_confs/14/ – Canceled ~850 titles from Elsevier, Wiley – Usage prior to cancellation: ca. 30,000 – ILL requests post-cancellation: 120 Research Libraries UK – Journal Subscription Analysis Tool http://chronicle.com/blogs/wiredcampus/british-library-group-develops-cost-benefit-tool-to- analyze-journal-pricing/32532 http://chronicle.com/blogs/wiredcampus/british-library-group-develops-cost-benefit-tool-to- analyze-journal-pricing/32532 – Allows libraries to set a ‘downloads to document delivery’ threshold UC: – Canceled one (smallish) publisher deal and significantly scaled back a large one in 2010-2011 – No palpable consequences thus far – Decision based on a variety of value metrics, of which usage was only one

17. CDL weighted value algorithm: Used for journal evaluation Measurement CategoriesMetrics UtilityUsage Citations QualitySNIP Impact Factor Cost EffectivenessCost Per Use Cost Per SNIP

18. What happens when you scale back: Cost You will sacrifice more content than you will save in dollars UC example: Cost for one publisher would have increased by 65% had we reverted to list price – Instead: 30% content loss, 8% savings We are working to convince publishers that the unit pricing gains of the early 2000s are the new norm – we must be able to scale back from those levels without these imbalances

19. Business model directions for ebooks Bundled packages where value and/or cost-benefit is high – High-value, high-demand publishers – Specific collections or series It may take experience with a bundled package to find out where the value resides – Where there is nonprofit mission alignment How can we achieve sustainability for libraries and for the university presses that are our partners in serving the academy? Demand-driven models to broaden and supplement the academic core – For some libraries, demand-driven may become the dominant mode Hybrid approach: demand- and/or profile-driven – With discounting options and/or upgrading to full packages as combined thresholds are reached? – With demand options on top of a base fee for more general access, guaranteeing long-term availability / preservation of the larger corpus? Open access for academic ebooks? – There is an opportunity here, but we seem to be prepared to let it pass us by

20. Should print factor into ebook pricing models? Flying Books, J. Ignacio Diaz de Rabago Doe Library, UC Berkeley, 2005

22. Print vs. Electronic Preferences Have used e-books for academic work: 58% Prefer e-books for academic work:* 35% * Percentage of respondents who have used e-books Prefer or use only print: 65% Prefer e-books:* 20% percentage of all respondents

23. Even e-book users don’t prefer e-books the percentage of both e-book users and e-book non- users who prefer e-books over print books is similar, 35% and 33% respectively. Importance of being able to: – Borrow a print copy from the library58% – Purchase a POD copy 38% – Springer e-book users who have purchased print-on-demand copies: 8% But, users want more e-books!

24. Typical user comment “I answered that I prefer print books, generally. However, the better answer would be that print books are better in some situations, while e-books are better in others. Each have their role – e-books are great for assessing the book, relatively quick searches, like encyclopedias or fact checking, checking bibliography for citations, and reading selected chapters or the introduction. If I want to read the entire book, I prefer print. If I want to interact extensively with the text, I would buy the book to mark up with my annotations; if I want to read for background (not as intensively) I will check out a print book from the library if possible. All options have their place. I am in humanities/social sciences, so print is still very much a part of my research life at this point.” (Graduate Student, Humanities, Social Sciences)

25. Relationship of print to electronic: Complementarity “I use e-books primarily to determine if the content is going to be helpful to me – table of contents, index, or perhaps skimming a chapter or two. I dislike reading on a screen, and so if I conclude that I want to read the book, I borrow it through our library or ILL.” (Faculty, Arts & Humanities) “E-books are a convenience to see if I need that book. Once I have figured out that I do indeed need the book, I either go purchase it or borrow it from the library.” (Undergraduate, Life & Health Sciences) “I find that e-books are most useful when I need to find a bit of text quickly for a citation or to check whether or not a book will be useful to my work. E-books save me a trip to the library in these cases. But, I rarely read books online. The interface is clunky, my Internet is slow, and I am a better reader when I have the print copy in front of me. For me, e-books are another research tool but not a replacement for the print copy.” (Graduate Student, Arts & Humanities)

26. P+E licensing strategies Free ‘archival’ print copy with e-license – UC negotiated this for many journal packages as well as for one major ebook package Shared copies were little used Several possible reasons that we are analyzing – May be most feasible for bundled agreements Print DDP Consortial sharing networks Personal POD copies

27. License Issues – Sharing vs. Interlibrary loan ILL is a library exemption under copyright law (Sections 108 and 109) – we must not give this up! If lending an entire ebook involved making it unavailable locally for a limited time, the contours of first sale would be preserved – Archiving and preservation DRM-free PDA/DDA: How will we assure the persistence of content we choose not to own today but may want in future??? – Reserves / instructional use Course adoption titles – If we cannot license these, our collections will be the poorer – Text mining

28. What have we learned from e-journal licensing? Bundled deals – Will have their place for high-demand content – Are seductive: once locked in, exiting is hard – – but do-able The good news: Unlike journals, users don’t have the same continuity expectations for discrete book titles Now is the time to influence publishers and business models Saying no is still the best tool in our arsenal

29. Every deal sets a precedent “Everyone else has agreed to that” “No one else has ever asked for that”

30. Don’t give up on intractable issues Interlibrary loan – Other sharing / lending models may develop, but: – ILL is a legitimate exception under copyright law – we must not give this up!

31. Difficult issues don’t get easier later on (usually) But – – License discussions are an opportunity to educate “Repetition is the key to learning” – If it can’t be resolved now, agree in writing to revisit it later – Establish norms through community-based principles and best practices – Don’t give up! Case in point: – In 2011, Elsevier finally agreed to allow e-versions of articles to be used for ILL http://www.elsevier.com/wps/find/intro.cws_home/SD_interlibrary_loan http://www.elsevier.com/wps/find/intro.cws_home/SD_interlibrary_loan

32. Approach difficult issues in a spirit of mutual problem-solving Bundled vs. demand-driven purchasing Relationship of p to e ILL, course adoption titles, instructional use We all want these new ventures to succeed

33. Thoughts, Questions?