1. ABC-CLIO’s Perspective on E-Books ICOLC September 21, 2000

2. Topics Our pricing is based on value, not cost. What value is added? How ABC-CLIO prices additional value. Feedback, please

3. E-Books and Reference are a natural combination Short access times by users Multiple users are easy to accommodate Extended searchability: full text and multiple approaches to find relevant information Check-in/check-out/tracking is automatic

4. Price is Based on Value Value of content* + Value of the presentation media** Total Value *value of content = utility **value of presentation media = how well usage is supported - access, convenience, etc.

5. E-book vs. Print book Value The e-book has addressed the presentation (usage) value first. E vs. P E vs. P Now Future Presentation Value: Higher* Higher Content Value: Same Higher** * Convenient, improved access - 7 x 24, anywhere ** Smarter, linked, updated, with integrated tools

6. Today, E-book Publishing Costs More Print Only Authors Editors Production, print Marketing Customer Service Print and E-Book Authors Editors Digital editing (smarter books) Production, print Production, e-books Marketing Customer Service Customer Management Hosting costs Engine costs Reports

7. ABC-CLIO’s Four Pricing Principles Open access Price by institution Bundles Volume discount

8. Principle 1 Open Access All members of institution receive access Pricing - if print book costs $100: e-book price, single user = $110 average e-book price for open access = $150 Hosting/Reporting: 25% for 5 years, or 8% of price/year Archive: if choose not to continue on-line access, receive a CD.

9. Principle 2 Pricing by Institution Larger universities, with more users and usage, pay more than smaller colleges. Public libraries and community colleges pay less for a lower utility (ABC-CLIO titles). Our conclusions to date: the range of prices for the e-book ($110 single user) could be $75 (for public library) to $200 (for largest university).

10. Principle 3 E/print bundles Deliver the content in the medium allowing greatest usage, the e-book. Offer additional copies in print and CD for something over the marginal cost, to further improve usage. Our conclusion: additional print or CD copies cost about 45%.

11. Principle 4 Volume Discount Discount for number of titles ordered Series standing orders receive discount. Discount for number of institutions per title See packet for example and details

12. Example Situation: 100 member consortium. Historical average of units purchased by consortia members is 40 units (meaning 60% of institutions may not have direct access to any given title)  Desired: unlimited 7x24 access for all students at all 100 member institutions. What should be the price?

13. Value and Price Collection size has increased by 150%. Price increase is 50%

14. Feedback?

15. Utility Enhancements Smarter More connected Includes tools More subscription like: new content added Minimizes or absorbs the “system costs” May include virtual workspaces for groups and classes

16. Utility Enhancements (2) Current e-book is “dumb”, smarter than a printed book, but significantly dumber than it will be soon. ABC-CLIO’s product development is several years past the current e-book. “Smarter”: just-in-time reference, animations, links, etc.

17. Extending Value Concept Value = f(Utility x Usage) = Price System costs are all costs associated with a particular service. Value of a product increases if system costs can be avoided through its use, or are included as part of the purchase.

18. System Costs Borne by Library, Absorbed by Publisher Selection x Purchase price Intake processing x CatalogingX Shelving/storageX Check-out/check-inX Statistics/Reports x x: reduce X- take over/eliminate