October Ivins, MLS

october.ivins@mindspring.com
Charleston Conference
November 8, 2013







Introduction
Definitions
The Why and How of Publisher Pricing
Models - October
Models Librarians Love and Hate...






Business Model- the big picture, how the
publisher makes money or supports itself.
May include seeking grants, pr...



Market research responses
Librarians are fine with even complex models
“So long as I can find my library’s price in t...


Define Goals
Identify team and timeline
Environmental scan
Choose market research role
Estimate direct costs and indire...











New product? Enhanced product? Underpriced
product?
New competitors?
Bundle or market with other conte...









Timeline, work back from price
implementation
Team- staff; outsource, consultant(s)?
What staff expertise...
Examine product and its position in the
marketplace
 Retention rate; new customers
 Profile former customers; why droppe...
External Data Resources
 Carnegie Classifications
http://classifications.carnegiefoundation.org/
 Vendor comparative pub...
ARL and ACRL 2001 Survey of Library Materials Budgets
Associates
Bachelors
Masters
Doctoral

$
$
$
$

High, $
880,461
4,50...










Timeline, upcoming meetings and
locations
Before, during, pre-launch, post-launch
Existing Library Advis...
Direct

Indirect

Acquisitions
Editorial
Indexing
Production
Hosting
Marketing
Sales
Customer Service
Preservation

Rent
U...
 Sustainable

income (non-profit) vs.

Maximize revenue (commercial)
 Prevent competitors from gaining more
revenue
 M...




Aggregator products also have pricing model
for royalty distribution to publishers
Tiers, plus: lower price for smal...









Absolute vs. comparative
Differentiate institutional, individual and
member rates
Oppose/Support/Promote co...
 Map

proposed prices to existing customers
 Calculate percentages affected: pay more,
stay same, pay less
 Calculate d...
Library
Tiers
5
4
3
2
1

1
71.4%
47.5%
33.3%
25.0%
15.0%

Usage Quartiles
2
3
4
81.0% 90.5% 100.0%
52.4% 57.1% 61.9%
38.1%...
 Contact

customers with large increases
 Explain rationale and result
 Note timeline for implementation
 Adjust as ne...
October Ivins, MLS
october.ivins@mindspring.com
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High Noon at the Pricing Model Corral

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October Ivins (speaker), Rick Burke (speaker)

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High Noon at the Pricing Model Corral

  1. 1. October Ivins, MLS october.ivins@mindspring.com Charleston Conference November 8, 2013
  2. 2.      Introduction Definitions The Why and How of Publisher Pricing Models - October Models Librarians Love and Hate– Rick Face Off in the Corral- You, Rick and October Please: Points of clarification during; questions during Face Off 1
  3. 3.    Business Model- the big picture, how the publisher makes money or supports itself. May include seeking grants, private investment, advertising– sources separate from income from selling publications Pricing Model- the model can be simple or complex but covers how a specific product, product group, or multiple product groups are priced and discounted. Price Points- the list prices assigned to points in the pricing model structure 2
  4. 4.   Market research responses Librarians are fine with even complex models “So long as I can find my library’s price in the model” 3
  5. 5.  Define Goals Identify team and timeline Environmental scan Choose market research role Estimate direct costs and indirect costs Consider pricing models that fit product, market, and estimated price point Use estimated prices to model  Preview with market research; adjust       o Current customers o Prospective customers o Repeat as needed 4
  6. 6.          New product? Enhanced product? Underpriced product? New competitors? Bundle or market with other content? Cover increased costs/move to commercial publisher? Create lower priced option for smaller customers? Support international outreach? Customer, consortia feedback? Differentiate member benefits? Phase out print version? 5
  7. 7.         Timeline, work back from price implementation Team- staff; outsource, consultant(s)? What staff expertise is needed; how much time? Quality of current customer and price data Access to historical data? Access to vendor data? Market research options? Create, vet, revise project timeline 6
  8. 8. Examine product and its position in the marketplace  Retention rate; new customers  Profile former customers; why dropped?  Availability in aggregators, embargo; Packages?  Identify cohort publications  ISI Impact Factor, altmetrics ?  Assess pricing model and pricing of publishers of cohort publications  Visibility: reviews, conference programs, social media?  Librarian Advisory Board, formal, informal? 7
  9. 9. External Data Resources  Carnegie Classifications http://classifications.carnegiefoundation.org/  Vendor comparative publisher data  Library Journal journals prices March-April  Ulrich’s  Impact factor, altmetrics  ACRL Library Statistics  ARL Library Statistics  Peterson’s Guide  Many for international 8
  10. 10. ARL and ACRL 2001 Survey of Library Materials Budgets Associates Bachelors Masters Doctoral $ $ $ $ High, $ 880,461 4,502,600 4,716,460 23,518,761 $ $ $ $ Mean, $ 111,311 265,197 434,215 3,063,815 Median, $ $ 83,100 $ 125,352 $ 287,760 $ 1,647,072 $ $ $ $ Total, $ Institutions, n 40,896,211 368 70,012,027 264 209,291,857 482 1,216,334,523 397
  11. 11.         Timeline, upcoming meetings and locations Before, during, pre-launch, post-launch Existing Library Advisory Board? Squeaky wheel/champion customers? Phone interviews, focus groups, surveys, town halls, conference one to to one, etc. Transparency vs. confidentiality But…Not a democracy May not take advice 10
  12. 12. Direct Indirect Acquisitions Editorial Indexing Production Hosting Marketing Sales Customer Service Preservation Rent Utilities Insurance Management Equipment R & D Investment “The strong carry the weak” 11
  13. 13.  Sustainable income (non-profit) vs.  Maximize revenue (commercial)  Prevent competitors from gaining more revenue  Make up for loss of additional print subscriptions on campus • Base on historical revenue/titles  Big Deals- inflexible w individual titles  Per site fee with remote access  Transparent vs. Opaque 12
  14. 14.   Aggregator products also have pricing model for royalty distribution to publishers Tiers, plus: lower price for smaller institutions/multiple price points for variety of institutions ◦ ◦ ◦ ◦ ◦ ◦ ◦ Carnegie Classification Student enrollment FTE Number of faculty Number of simultaneous users Disciplinary users = usage, but Discovery services Disciplinary users = academic program. Population served = public library 13
  15. 15.       Absolute vs. comparative Differentiate institutional, individual and member rates Oppose/Support/Promote consortial sales Backfile (sell separately; with current subscription only; rolling bundled backfile) New ebooks with print counterpart discount Textbook model- static vs. interactive 14
  16. 16.  Map proposed prices to existing customers  Calculate percentages affected: pay more, stay same, pay less  Calculate dollar amounts of change  Identify other causes of large increases, such as reassigned Carnegie values, change in FTE, etc.  Continue modeling until the prices are the most moderate that can achieve revenue goals  Publish price schedule vs. Require Quotes 15
  17. 17. Library Tiers 5 4 3 2 1 1 71.4% 47.5% 33.3% 25.0% 15.0% Usage Quartiles 2 3 4 81.0% 90.5% 100.0% 52.4% 57.1% 61.9% 38.1% 42.9% 47.6% 26.0% 28.5% 30.0% 16.0% 18.5% 20.0%
  18. 18.  Contact customers with large increases  Explain rationale and result  Note timeline for implementation  Adjust as needed  Expand outreach other customers  Inform all participants in market research  Prepare public announcements  Incorporate into marketing timeline  Monitor impact on renewals; Mediate 17
  19. 19. October Ivins, MLS october.ivins@mindspring.com
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