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Re: Response from Ted Bergstrom to Ann Okerson

I found Ann's explanation of the complexity and irreversibility of
contractual/pricing negotiations very intriguing. It has the hallmarks of
bitter experience and hard-won perplexity.

It is odd in some ways, that publishers and aggregators have not found it
possible to develop a transparent, rational, scaleable and public way of
pricing access/subscriptions to electronic literature. But I know from
personal experience that networks and consortia have been complicit in
encouraging pricing variability and opacity. Its not just the publishers
who have been creating the complications.

Odd too that some publishers have apparently wished to prevent their
customers from discussing pricing arrangements, because historically
publishers and booksellers have been very attached to the idea that a
physical book, journal or magazine has a 'published price'. It has to be
the case that the confusingly different and non-standard licensing and
pricing terms for proprietary databases is one of the factors that makes
toll access publishing relatively inefficient as a way of communicating
scholarship and research.

Amazon, Google, and their like are developing much more scaleable and
automatable pricing and licensing models for literary content through the
web --- but there is not much sign that they would regard libraries as a
significant part of their market (except of course in the case of Google
finding libraries a convenient content-partner). If they do decide that
libraries are a market, then we may find some awkward licensing and
pricing arrangements under discussion.

Perhaps its time that the librarians proposed a 'public lending right'
standard for pricing per page view or annual rental per title. It could
and should be very low -- and it could be on top of the 'fair usage' right
of automated search (which will be accepted if Google win their case) --
and yet it still might be economically interesting and so encouraging to
greater provision of electronic access for in copyright works.


On 11/11/05, Ann Okerson <ann.okerson@yale.edu> wrote:
> Phil, I see the situation differently from what's described below and by
> others who have posted on this thread. My perspective comes from nearly
> 10 years of steadily working on/with/signing contracts for both Yale and
> for the NERL consortium, having now dealt with hundreds of these.
> 1. Non-disclosure of terms was a much bigger issue in the "early" days,
> i.e., a decade ago, than it is today. I'd guess that relatively few of
> our contracts now have such clauses -- of the hundreds of licenses in
> effect at this time. Non-disclosure is to be resisted, and the library
> community has done so with increasinlgy good effect; publishers have
> "lightened up" on this as on so many other contractual issues. We've all
> come a long way since that initial Academic press contract of 1996 --
> though I'm not sure AP is a good example, since I can't attest that it
> asked for non-disclosure! Anyhow, I no longer see non-disclosure as that
> much of a "last frontier of licensing."
> 2. Many or most of our e-journal packages are licensed consortially. My
> perception is that in nearly all cases we've negotiated within standard
> frameworks or models offered by the publishers, and these are available
> to all consortia in much the same way as to NERL. For example, one
> chooses whether one wants e-only, e- plus print; AND the entire package,
> selected subject packages, or individual titles. Those basic choices are
> most often (though not by all publishers) tied to cost of titles a
> library used to take in print (that is gradually changing but very
> gradually and we need newer, better pricing models for this, which would
> eliminate the construct of 'list price' altogether).
> The consortial pricing variations arise depending on a few factors, the
> *most* common of which are probably (this list isn't exhaustive):
> * length of contract the group is willing to sign, with slightly better
> discounts for longer contract (last time Elsevier gave our consortium a
> chance to mix contract lengths so members within the arrangement could
> pick 1, 3, or 5 years, as they wished). Longer periods were worth -- if
> I recall -- 1/2 percent discount off the e-fee.
> * how many members or FTE join the contract. More customers might yield
> another 1/2 percent discount than fewer.
> * sometimes we can get small libraries really good deals on contracts,
> -- libraries that have not been able to be customers -- for a token
> price for the full resource set.
> None of the above are particularly mysterious or secret, so I don't
> imagine that either as a Yale librarian or moderator of this list I
> could possibly be hauled off to the pokey for divulging trade secrets or
> engaging in restraint of trade practices. I'm not sure I know trade
> secrets! The great majority of publishers wish to be seen to deal with
> library customers consistently and fairly and evenly.
> A final point re. sharing pricing information, as several on this list
> have advocated: This is complicated, but not for reasons of secrecy.
> Imagine a situation wherein NERL negotiates an all-journals contract
> with FRED'S PUBLISHING, INC for our 26 core members and 44 affiliate
> members. (BTW, In our consortium, only libraries who wish to sign on for
> a license do so -- others do not; there is no obligation for all to
> join.) So, some of our contracts have had 3-5 takers; others have had
> close to 100% participation.
> The pricing for FRED is calculated something like this:
> 1. Yale takes 200 of FRED's 500 subscriptions in print. Yale's price for
> e- and p- is now calculated at the list price of the 200 subscriptions
> plus a 7% surcharge for access to the entire rest of the package in
> electronic format. Result is e-access to all 500 titles plus the ones the
> library wishes to keep as print. (This access to the full 500 is much
> cheaper than the labor cost of sending articles around via ILL so there's
> an offsetting savings on the backroom processing costs.) Contract allows
> move to e-only for 95% of print price, and let's say that Yale might
> decide do to that in the second year of the contract. If/when we do this,
> we will reap a 5% one-time savings off our overall pricing with FRED.
> 2. Smaller-NERL-Member than Yale takes 76 of FRED's 500 subscriptions in
> print. Smaller's price for e- and p- is now calculated at the price of
> the 76 print subscriptions plus a 7% surcharge for the entire rest of the
> package in electronic format. Smaller now decides to drop all its print
> subscriptions, so the net result for Smaller is the price of the 76 print
> subscriptions minus the 5% for e-only.
> 3. NERL affiliate (really small member) takes only 5 of FRED's 500
> subscriptions. Affiliate's price is now calculated at the price of the 5
> print subscriptions plus either a surcharge for its existing print or a
> discount of 5% if it drops the print entirely.
> So, each library that chose to sign onto the package has gotten e-access
> to 500 titles; the prices each is paying for those 500 titles are indeed
> different, being the prices for what they'd previously chosen to afford
> in print and modified by length of contract and whether they change to
> e-only or not. Maybe the consortial negotations have gotten some
> concessions on a reduction in backfiles pricing, or some other adjunct
> terms.
> The deal is concluded and then NERL is billed by the publisher for the
> libraries that have chosen to sign up. Let's say that's 14 libraries and
> the bill is -- hypothetically -- $1/2Million, which is apportioned among
> the libraries in our group as per original calculations for their "print
> spend." I'm not asserting this is or is not the perfect contract -- only
> that it is, for this moment in time, a somewhat typical one.
> What I've been trying to say in my previous message and in this one is,
> I don't any longer know how to (by what groundrules) calculate the price
> per title under such a consortial package deal. The calculations could
> be done, of course. The challenge is how to make and present these
> caculations in ways that make sense and have meaning. Even when one
> does, they won't be comparable to pricing for other libraries in other
> consortia. This difficulty is in no way related to secrecy about
> pricing.
> Also, as an aside, in the above scenario, the libraries are generally
> satisfied with value and terms/conditions. Where -- as all librarians
> point out -- we become cranky (justifiably cranky!) is if we want to
> change subscriptions, or particularly, downsize the package. Then the
> same flexibility that has become ours through taking "everything," can
> begin to become a liability.
> Fortunately, package publishers pretty much let us swap out titles within
> these arrangements, but generally dollar volume has to be maintained.
> Fewer allow us a cancellation rate during the term of the contract or
> between contracts, though some do; and still fewer consortia have found a
> way to negotiate orderly downsizing. OhioLink is the one consortium known
> to me to have had some success. (See
> <http://www.dlib.org/dlib/october04/gatten/10gatten.html>)
> Others of us persist in trying and regard package downsizing as one of
> the "last frontiers of licensing." Like the other frontiers that have
> been addressed (many with success), it will be resolved in useful and
> creative ways. At least, that's one of the (many) challenges that keeps
> me coming to work each day.
> Cheers, Ann Okerson/Yale Library