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

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

There would then be the opportunity to spam the system by 
publishers producing books that meet the 'usage count' whatever 
solution is adopted. So I dont think one can ignore the technical 
difficulties required to measure usage.

How do you in the end measure the relative value to anybody of a 
wonderful illustration, a set of sonnets, or the paper which 
proves Fermat's last theorem (of course the latter should be open 
access!)

The 'utilitarian' model implicit in your proposal only works if 
all books are made of broadly similar stuff.

Adam Hodgkin
adam.hodgkin@gmail.com



On 14 Apr 2010, at 21:33, Eric Hellman wrote:

> As I said, the trick is to control the budget. Consider this 
> variant. Suppose a library system put out a tender for ebook 
> supply totalling 1 million dollars per year. Publishers 
> participating in the tender would be paid a share of the $1M 
> based on usage of the books they supplied.
>
> Please ignore for the moment the technical difficulties of 
> measuring usage and consider whether such a system would 
> provide the correct economic incentives. The publishers would 
> have incentives to get their stuff used. The library would get 
> a fixed expense. No one would have their usage rationed.
>
> I would also argue that many OA models are usage-based pricing, 
> where the "price" is advertising exposure.
>
> Eric Hellman
> President, Gluejar, Inc.
> Montclair, NJ 07042
> USA
> eric@hellman.net
> http://go-to-hellman.blogspot.com/
>
>
> On Apr 13, 2010, at 6:24 PM, Heather Morrison wrote:
>
>> 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/