RE: Price discrimination for academic subscriptions (discussion)

[Ann Okerson <ann.okerson@yale.edu>]

Phil:  Your questions and comments are good ones; it's long seemed to me
that in e-world, publishers are trying to find good and fair ways of
charging by usage level, whether it be by utilizing FTE counts, or FTEs
enrolled in a given program, or Carnegie Class, or actual usage levels.  
And my guess is that increasingly prices will correspond somehow to usage
levels.  (Sometimes the customer can set usage levels, for example, where
publishers offer a Simultaneous User model, libraries can pick that
number, which is tied to pricing, but that's not usual for full text
journals.)

You ask what we can expect as longer-term effects if we do move explicitly 
to some form of usage-based pricing.  At the moment, it's hard to tell, as 
our usage data are still very primitive, so publishers and librarians are 
being understandably cautious about "going there."

As one who believes that dialog between publishers and librarians can and
is being productive and useful, I'll try not to sound too cynical when I
say that most publishers have an annual "bottom line" target that they
need or want to meet.  And so, usage-based pricing is likely to be
arranged so that the revenues add up to that bottom line.  So, you're at
research-intensive, information-voracious Cornell -- you may be asked to
pay more for ejournals than you would have paid for your print sub;  
whereas Clem Smedley, at Little College, will be asked to pay a miniscule
sum, far less than he would have paid in print (print prices couldn't
easily be nuanced).

There are one or two early signs that usage based pricing could be very
hard on research intensive universities, even as (perhaps) it will be
neutral or beneficial for small schools or developing countries (see the
many for-free offerings available for the latter at:  
<http://www.library.yale.edu/~llicense/develop.shtml>.

For example, just last week, one particularly important scientific
publisher wrote that he/it is facing advertising revenue loss.  This
publisher notified its largest customers that price for our group will be
related to usage *and* in those cases the prices are increasing by a
whopping amount (doubling or more in our case).  Someone has cynically
suggested that the solution for us is to hide those ejournals and make
sure that as few users as possible find them.  Yet if the biggest users,
i.e., research-intensive schools, cannot afford to purchase some core
titles, those titles do face a good chance of withering and becoming far
less core.

When that happens, no one wins.

Ann Okerson/Yale Library
ann.okerson@yale.edu


On Wed, 3 Sep 2003, Phil Davis wrote:

> Heather Morrison provided an excellent response and discussion to my
> original post regarding price discrimination.  Without diverting into
> arguing over specific details, I would like to resubmit for discussion
> that any institutional classification (FTE, Carnegie Class, number of
> biologists, etc), are merely estimates of real (or potential) use.  Are
> the consequences for paying for what you use any different than paying for
> what you *may be likely to use*.  In other words, what would be the
> economic effects of moving to an economic pricing model whereby an
> institutions's price is at least partly based on that institution's usage
> pattern?
> 
> --Phil Davis