By John Riley and Tom Gilson
ATG: For those who haven’t read the letter that you both wrote to The Chronicle about the recent increase in eBook pricing, can you tell us the key points you were trying to make?
SS & JU: In our letter to the Chronicle of Higher Education on behalf of the Boston Library Consortium (BLC), we wanted to call attention to the unanticipated price increases that some academic publishers (mostly from the for-profit sector) were imposing on academic libraries for short-term loans of ebooks. These increases, announced at the end of May 2014, without advance consultation, doubled and in some cases tripled the cost of short-term loans, in the second year of the BLC’s ebook pilot. Ebook usage is increasing fairly rapidly in research libraries, but these are still early days for the academic ebook, and we thought it was important to take a stand now, and do what we could to steer pricing in a more sustainable direction for libraries. We’re pleased to say that since publishing the letter (which can be found athttp://chronicle.com/blogs/letters/ebook-pricing-hikes-amount-to-price-gouging) we have had some constructive conversations with commercial ebook publishers, and we have also heard from other libraries and library consortia who have also responded to these increases as we did, by dropping titles and in some cases eliminating publishers entirely from their ebook programs.
ATG: What portion of your budget was going to STL (Short Term Loans) and what portion is it now?
SS & JU: Our proportions having been holding fairly steady at 2/3 of the allocated budget going to purchases and 1/3 to STL’s. It is too soon to tell if that will be changing since we significantly modified the pool of titles following the STL price increases in order to increase the likelihood that our budget would suffice. If we had not done so, not only would we have purchased fewer titles due to the increase in costs of STL’s, we would also have burned through our budget more quickly and had to shut down the program well before the end of the year.
ATG: How has the timing of the price increases affected your members?
SS & JU: The timing was terrible for the BLC libraries as we had already completed the work required on the part of the member libraries to get approval for their contributions to the program for FY15. It was, therefore, impossible for us to increase allocations to the program and the only choice we had was to cut back on the number of titles we could make available to end users. This was painful since one of the major points of a demand driven program is to offer as broad a pool of ebooks as possible for discovery. We saw our pool cut by close to 40%, primarily from publishers whose ebook prices are the highest [and who also happened to increase their STL costs].
ATG: Aren’t most of the eBooks available for STL older imprints? It seems as though publishers would be happy to be selling those titles rather than letting libraries purchase print copies in the o.p. market from which they receive no payment.
SS & JU: Our program actually had a focus on front list titles, although we did load some back list as well. If you look at our data from the period June, 2013 through May, 2014, we saw 47% of the usage for titles published in 2013/14, 46% for titles published in 2012 and only 7% for earlier titles since they represented such a small pool.
ATG: From the Chronicle article it appears that STL for eBooks was conceived mainly as a replacement for ILL. Since it costs libraries nearly $50.00 to process an ILL isn’t it still cheaper to work with some increases in STL?
SS & JU: Actually, we think this is a bit of a red herring. ILL costs [and we think $30.00 may be a more reasonable estimate than $50.00 with new services further reducing costs for many ILL transactions] are primarily those associated with the labor, technology, and delivery provided by the library. None of these “costs” results in revenue for the publisher, unlike STL’s which do provide a revenue stream. If STL’s for ebooks were seen as a replacement for ILL, why would the library pay anything for them (:?
What we need to remember here is that ebooks are just different and their usage reflects that. We see a short-term loan model as a way publishers can take advantage of those differences and, particularly over time, gain revenue they would not have seen if the library was given only the option of purchasing the full title or if the user’s only option was an ILL request.
ATG: Some academic librarians feel that what is happening to e-book pricing is a replay of the ramped up serial pricing that librarians have often criticized. Do you agree? If so, why?
SS & JU: Well, that is certainly a fear and what prompted the “oh, not again” perspective reflected in The Chronicle article. Monographic budgets took a major hit as a by-product of the gargantuan increases in serials prices. Access to ebooks using an STL model ensures that libraries can offer a broad range of content to users while continuing to build robust collections as is appropriate for their local institution. Certainly libraries look back at the “serials crisis” and wish they had done more to stem the tide, so we want to be sure we do not miss this opportunity to clearly raise our voices.
ATG: From our discussions with other librarians there seems to be a consensus that the same STM publishers who have dramatically increased journal prices are the ones that want to increase STL rates. How do the publishers respond to that perception?
SS & JU: I think you’ll need to ask them. However, we certainly see that commercial publishers’ ebook pricing is overall considerably higher than titles from most university, society, and other scholarly publishers. We applaud the work they are doing to keep prices reasonable and hope we can continue to work with them to offer their content through short-term loan models.
ATG: Publishers argue that the previous cost model for eBooks wasn’t sustainable. And at least one says the fact that a number of “publishers raised prices simultaneously reflects a common acknowledgment that the existing model didn’t work.” How do you response to these claims?
SS & JU: We don’t understand what “sustainable” means here for the publishers. Is the issue one of revenue
recognition [i.e. since a short-term loan is not a firm purchase, the publisher cannot recognize the revenue in the same way and as quickly as they can traditional purchases]? If so, that is a transition many industries have had to make as they move into new models. On the library side, “sustainable” has another meaning of course and as one of the BLC librarians noted “Our budgets are not increasing and you cannot get blood from a stone.”
We also believe that sustainability of new models, particularly those involving demand driven programs, requires re-thinking the timeframe for determining this “sustainability”. If a publisher expects the full revenue for a given ebook to be only that seen in the first calendar year, they may well underestimate both the potential for short-term use revenue in the future and for final purchase of the ebook after the short-term use trigger has been reached. Looking at this model requires a different set of metrics than might be applied to a traditional print or ebook firm purchase model.
ATG: Sustainability is in the eye of the beholder. What e-book pricing model would be sustainable from the library perspective? Would it include short term loans? How would demand driven acquisitions play into the mix?
SS & JU: These are excellent questions and ones we had hoped to be able to test with our ebook pilot. We certainly believe short-term loans, particularly as part of a demand driven program, offers major advantages to library users and to publishers. We can offer a much broader suite of publisher titles than would otherwise be the case. Libraries and publishers get much more accurate and immediate feedback on usage than has ever been the case before. And, we create a longtail of revenue potential for the publisher by allowing them to reasonably price usage for titles that would not have been purchased outright.
ATG: Kelsey Corlett-Rivera, from University of Maryland at College says that “There’s a big push for the libraries to set the agenda this time around.” What is the Boston Library Consortium doing differently to make that happen?
SS & JU: First and foremost, we are raising our collective voice. We are also engaging both with the aggregator [ProQuest in our case] and more directly with publishers to discuss the issues. Unfortunately for some publishers, at least some of the BLC libraries will likely be purchasing less from them as a result of their actions in raising prices here. It left a bad taste that won’t go away quickly. And, of course, we ended up significantly reducing the size of our pool of titles from certain publishers who had increased prices, thereby eliminating any possibility of STL revenue for them.
ATG: Are you reaching out to other library consortia like the Oberlin Group and the Orbis Cascade Alliance to build a common strategy to deal with eBook pricing?
SS & JU: We had conversations with a number of other library consortia and most if not all are doing or will be doing as we have: reducing the number of titles available to their patrons, usually with a focus on those publishers whose overall ebook pricing is considered the least fair.
Current BLC Members
Member Libraries Library Website Hours Boston College http://www.bc.edu/libraries/ Hours Boston University http://www.bu.edu/library/ Hours Brandeis University http://lts.brandeis.edu/ Hours Marine Biological Lab / Woods Hole Oceanographic Institution http://www.mblwhoilibrary.org/ Hours Massachusetts Institute of Technology http://libraries.mit.edu/ Hours Northeastern University http://library.northeastern.edu Hours State Library of Massachusetts http://www.state.ma.us/lib/ Hours Tufts University http://www.library.tufts.edu/ Hours University of Connecticut http://www.lib.uconn.edu/ Hours University of Massachusetts Amherst http://www.library.umass.edu/ Hours University of Massachusetts Boston http://www.lib.umb.edu/ Hours University of Massachusetts Dartmouth http://www.lib.umassd.edu/ Hours University of Massachusetts Lowell http://library.uml.edu Hours University of Massachusetts Medical School http://library.umassmed.edu/ Hours University of New Hampshire http://www.library.unh.edu/ Hours Wellesley College http://www.wellesley.edu/lts Hours Williams College http://library.williams.edu/ Hours
ATG: What do you think the future of DDA in academic libraries will be?
SS & JU: DDA is certainly growing across the BLC libraries, even among those research libraries with a clear commitment to building strong local collections. It is such an obvious way to take advantage of digital content and to provide users, particularly undergraduates, with immediate access to what they need when they need it.
ATG: Do you think publishers will abandon aggregators in favor of direct sales to libraries?
SS & JU: This is obviously a question better directed to publishers, but I doubt it will occur in the near future, at least for most publishers. Aggregators have played an important role in the eco-system for both libraries and publishers.
ATG: Do you foresee any movement by Amazon to disrupt scholarly publishing pricing as they have done in the trade publishing world? With their new Kindle Unlimited subscription plan a reader only pays after reading more than 10% of an eBook. Could publishers institute a pay by page read or a similar model that would that suit libraries’ needs?
SS & JU: Who knows what Amazon will do! We would love to discuss more granular models of use with publishers, however, and only recently had a discussion around the advantages of chapter level access and linking.
ATG: You mentioned that you had some productive talks with publishers at ALA. Has anything concrete come out of those discussions?
SS & JU: I think we are both gaining perspective on how the other looks at the issues and that is critical. As I mentioned to one publisher, we often see the same data and draw very different conclusions because of our perspectives. Sharing data and sharing what’s important in evaluating that data can only be to our mutual advantage.