Re: Usage-based pricing (was ebooks in libraries a thorny problem)

[Sandy Thatcher <sgt3@psu.edu>]

While not quite the same thing, do not some libraries, or 
university computer centers, limit the number of pages a student 
may print out per month or semester or year? I've heard that 
Brown University, among others, follows such a rationing 
practice. Is this "madness"?

Sandy Thatcher

>Eric Hellman wrote:
>
>Usage based pricing only provides a disincentive to use if the
>price is paid by the user. Viewed from the provider side, it
>provides exactly the right incentives- you should want providers
>to make resources that users want to use. The trick, of course is
>how to control the top-line of the budget.
>
>Comment:
>
>Usage based pricing, by definition, means that someone is paying
>by the usage, and hence there is incentive to limit usage.
>
>Let's go back to the scenario of libraries purchasing ebooks on a
>usage-based pricing.  Let's say this model becomes the norm.
>The library's ebook budget then becomes x dollars to cover x
>uses.  What happens when the budget is cut, or the cost per use
>increases more than the library budget?  The library would have
>to ration usage, or pass the costs along to users (which brings
>the direct disincentive to usage that you mention).  It is very
>easy to imagine the same kind of vicious cycle that we have seen
>with the serials crisis, i.e. if libraries ration reading or
>users curtail their reading, vendors are likely to increase
>per-usage cost since their costs are covered by fewer uses,
>resulting in further rationing of reading, and so on.
>
>This is madness with scholarly knowledge in electronic form,
>which is nonrivalrous in nature.  Once a copy in electronic form
>is available over the internet, costs for additional uses are
>virtually nonexistent.
>
>Usage-based pricing as an alternative is a strong argument for open
>access.
>
>Heather Morrison, MLIS
>http://pages.cmns.sfu.ca/heather-morrison/