Re: universities experiment with paying OA fees

[Adam Hodgkin <adam.hodgkin@gmail.com>]

There are certainly advantages and efficiencies which come with 
scale, and with big bundles. But selling and licensing systems 
which move in the direction of monopoly impose inefficiencies on 
their markets. There have been concerns about these monopolistic 
tendencies in the STM journals market, which is moving to 
consolidation with a few large players. I dont think that a 
parallel model is going to work for digital books -- which in my 
view is a good thing.

The challenge for aggregators who believe in the efficiency and 
all- round benefits of their aggregation strategy is to figure 
out ways in which they can aggregate efficiently whilst at the 
same time disaggregating 'gracefully' when the need arises.

What I mean by 'disaggregating gracefully' is this: I assume that 
OECD book publishing has been very effective in the last 20 years 
by publishing printed books which have found their way into 
10,000+ libraries world wide, quite possibly there are 20,000 or 
more institutional libraries that have at least one OECD book on 
their shelves. Many excellent libraries will have fewer than 10 
OECD books in their shelves and that they have those books is a 
very good thing.  There is no doubt that a 'tight bundle' 
strategy for OECD digital books can serve well the libraries in 
the world that need the majority of OECDs 250 pa output. Suppose 
that there are 1,000 such libraries, then a 'tight bundle' will 
work very well for those leading libraries.

Bundles work well enough for the short head of libraries in any 
particular field. They do not work so well for the long tail of 
libraries that has a serious need for a few books from the OECD 
output. Toby may have this well covered with the OECD thematic 
bundles which cover just ten books.

If that style of offering (small thematic bundles) is working I 
would say that OECD is disaggregating gracefully and that is 
delivering an important service to specialist libraries which do 
not need the whole of the OECD output. If those mini-bundles are 
not working, there may be a case for looking again at the 
distribution and packaging strategy....

Adam Hodgkin


On 20 Jun 2008, at 00:29, <Toby.GREEN@oecd.org> <Toby.GREEN@oecd.org>
wrote:

> Adam,
>
> Thanks for your posting and for introducing me to your 
> platform. I've looked at the Lessig books. It's a nice, clean 
> interface. I like the clip feature. I didn't like that I can 
> only print off pages one-by-one - this would be very tedious if 
> I wanted to read a chapter on the train home tonight.
>
> I disagree with your view that selling subscriptions is 
> increasingly inefficient. In my experience, it is quite the 
> reverse. Selling books by the one, whether in print or online, 
> is inefficient.
>
> Think about the costs involved in deciding to buy a book on a 
> one-by-one basis and then the transaction costs involved in 
> making the purchase. According to ALA data from around 2000, 
> the administrative cost of buying a single printed book is 
> around $50. I guess it might be a little lower for a digital 
> copy today, for the sake of argument let's say it is half - 
> that's still $25 per book. The administrative cost of 
> subscribing to a multi-issue print journal was around $75 
> c.2000, it's probably lower for online-only journals, but for 
> the sake of argument, let's stick with $75.
>
> Let's say I've got ten books. On a one-by-one basis how many 
> would I really sell to a library? Two, three? Maybe five? If 
> the books sell for $50 each then my potential income from the 
> library might be five times fifty (250) less trade discount and 
> my one-by-one marketing and admin costs. The library has spent 
> $375 (5x50)+(5X25).
>
> Now let's think from the publisher's viewpoint. If I can reduce 
> my trade discount to subscription terms (we all know they are 
> lower than bookseller terms) and if I can reduce my marketing 
> and admin costs by bundling my books together, I can pass some 
> of these savings onto the librarian in the form of a lower, 
> bundle, subscription price. How about all ten books for $250? 
> The total cost to the librarian is now 250 + 75 = $325. This is 
> a $50 saving on buying five books on a one-by-one basis and 
> they've got twice as many books. My net income is going to be 
> higher because I've reduced my transaction and admin costs. So 
> we're both happier. I've also provided a better service to the 
> librarian's reader community because they now have access to 
> all ten books. Half my authors will be happier because all ten 
> books are now being exposed to potential readers at that 
> library.
>
> This model works when a library needs a good number of all the 
> titles published - in this example, when they need half the 
> books. If they only need one or two titles, then they're better 
> off buying by-the-one. For this reason, we offer librarians the 
> choice of bundles of books and books by-the-one. Of course, if 
> I can lower my costs still further, then I can make the point 
> at which it's better value to subscribe to a bundle lower.
>
> The numbers point to one clear conclusion: it is better value 
> for both librarians and publishers to offer bundles of books on 
> subscription. It is also better for readers (more stuff to 
> choose from) and authors (more potential readers with access). 
> I don't know what this says about the 'value and quality of 
> individual copyrights' but I think it says a lot about the 
> value a publisher can add to the process of making authors' 
> works accessible to as many readers as possible in a 
> cost-efficient and sustainable manner. I also know that we're 
> just as stringent about quality as we were before we went 
> digital - the last thing we want to do is to spend money 
> publishing a book which no-one wants to read because if we 
> publish titles no-one reads the librarians will stop 
> subscribing.
>
> This isn't a business model just for the big publishers and 
> aggregators. We publish 250 books annually which makes us 
> mid-sized, I guess. We offer a bundle with all 250, but also 
> smaller, thematic, bundles - some with just ten books. We've 
> got more than a thousand libraries subscribing to our book 
> bundles and the number is growing nicely. The bigger boys might 
> be having trouble getting their deals to 'stick' but I bet 
> that's because they haven't got the value proposition right 
> (i.e. they're asking for too much money). But this doesn't 
> invalidate the inherent efficiency of bundling over a 
> one-by-one business model for librarians, publishers, readers 
> and authors.
>
> Toby Green
> OECD Publishing