Reset: A publisher’s response to the changing economy<br />Marybeth Manning, <br />Director, SPIE Digital Library Sales & ...
What brings me here today?<br />For 2010, SPIE took the unusual step of rolling back institutional subscription rates for ...
What am I going to talk about? <br />
Who is SPIE?the international society for optics and photonics<br /><ul><li>  A not–for–profit  international society—501c...
  The Society advances emerging technologies via its interdisciplinary information exchange through scientific conferences...
  Nearly 190,000 constituents from 138 countries, 15,000 members
   Supports 150 student chapters worldwide
  Provides nearly $2 million US annually in both dollars and in-kind support for scholarships, grants, and other education...
  Publisher of the SPIE Digital Library.   Also publishes print monographs, Tutorial Texts, Field Guides, reference books,...
Archived via Portico
COUNTER III compliant
MARC records through OCLC
Subscriber co-branding available
IP authentication
No concurrent user restrictions; unlimited downloading
CrossRef linking
Citation metadata for easy download
Indexed in Scopus, Compendex, Inspec, Google Scholar, Scitopia, Chem Abstracts, and others
Multimedia</li></li></ul><li>What was our institutional business model for DL prior to 2010?<br />Subscription Model<br />...
Market segment-based </li></ul>Academic: Carnegie and relevant programs<br />Government: Relevant FTE and programs<br />Co...
International team of sales agents
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Reset: One society's response to the new publishing economy


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Presented at the UKSG Annual Conference 2010, this covers the research and philosophy behind SPIE's long-term decision to reset it's Digital Library subscription prices. The economic crisis provided a catalyst to take a longer-term look at how to best disseminate the society's conference and journal content, and at the same time build its subscriber base. The 10% price rollback in 2010 was followed by a freeze in 2011 and a 5% further rollback for 2012.

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  • Good afternoon. It’s a pleasure to be with you and amid such distinguished company. Having listened to Ted’s very interesting talk, I’m curious how many libraries in the audience have Big Deals and find your self in the in the same delimna? I know audience participation is an awful thing to ask, but could you raise your hand if your institution participates in an Big Deals?Hmmmm– so either not too many or everyone is very shy this afteroon!
  • The UKSG invited me here today to present to you how we at SPIE decided to take the exceptional—some said drastic, some said welcome—step of reducing our prices for institutions that subscribe to the Digital Library of SPIE journals and proceedings.I would have to say that SPIE’s general outlook on the future of scholarly publishing—and how we can be responsible citizens in our community—were primary reasons behind the price reductions. Our Society’s leadership believes that converging trends in scholarly publishing—mixed with widespread economic woes especially in our traditional markets are not short-lived—and will, in fact, have a sustained impact on the scholarly publishing industry. As a scholarly society and not-for-profit publisher, we decided to respond to these challenges by taking the opportunity to reassess our position in the marketplaceand our strategic approach to growth. We spoke with stakeholders—from librarians to sales agents. We reviewed market research we had conducted in the recent past. We evaluated the competition. We reviewed our key performance indicators like new business and renewals and usage. We explored the various pricing models in the marketplace. determined that we were in a position to redefine our pricing model and reduce our prices while still projecting sales growth and continuing to develop SPIE’s Digital Library.
  • In my talk today, I will review the steps we took to determine our path forward and discuss the rationale behind our decision to reduce prices. At the end, I will take a step back from our situation and take a few minutes to comment on whether or not we think that our approach has wider applicability to the scholarly publishing community.
  • Before launching into the meat of the matter—to put our decision in context—I would like to take a moment to tell you a bit about who we are and what we publish.SPIE is the not-for-profit international membership society for optics and photonics. We were founded in 1955. And our mission is to advance light-based technologies. We serve more than 190,000constituents from 138 countries.Each year, SPIE organizes and sponsors approximately 25 technical symposia composed of technical conferences,industry exhibitions and short course and education programs.
  • Optics and photonics are considered enabling technology rather than a definable and fundamental discipline such as physics or chemistry. As enabling technologies optics facilitates technological solutions across many disciplines and many applications. As this chart indicates, today and projected into the coming decade, optical and photonics technologies are shaping the future of our world. They are embedded in virtually all high technology applications from medicine to the environment, from solar energy to nanotechnology. Every display, every computer, every satellite. From the simplest LED acting as a high qualify flashlight on your key chain to the most complex imagery used by the defense and security industries we are living daily with the results of optics and photonics research.
  • SPIE publishes the SPIE Digital Library—or DL as we call it in-house—which contains nearly 300,000 interdisciplinary research papers from the Proceedings of SPIE and the Society&apos;s seven scholarly journals. The SPIE Press also publishes print monographs, tutorial texts, Field Guides, and reference books. We also publish a wide variety of open access content.Since its inception in 2004, the SPIE Digital Library has disseminated vetted research content to the R&amp;D community. DL enhances the original research with personalized services including sophisticating searching, reference linking, e-mail alerts, individual article collection folders for researchers, download activity tracking, and co-branding for librarians.  Articles from Journals and Proceedings volumes are published online as soon as they are reviewed and accepted.
  • Our institutional business model is subscription based w a tiered pricing model.(Speak from slide.)
  • Speak from slide
  • In keeping with our educational mission SPIE’s – an overriding priority is the dissemination of optics and photonics technologies to the research communities. An important imperative was and is to make sure that all researchers have access. Consistent with SPIE ‘s not=for=profit mission we are not driven by returning a profit each year to shareholders. But at the same time we must provide a sustainable future and to ensure that the SPIE Digital Library can grow, develop new content and features that are of value to the research community. To do so we need to behave if not as a business but in a business like manner. Taking that into account, overall, our project objective was to achieve an optimal balance of reach and revenues for its content. SPIE engaged a scholarly publishing consultancy (Kaufman‐Wills Group) to help us analyze the institutional market and offer strategic pricing recommendations for DL.
  • Situation analysisOur first step was to review DL’s key performance indicators such as pricing, circulation, and revenues re-reading relevant reports and analyzing data. We reviewed market-leading subscription models. We profiled and compared the competition’s subscription model and pricing on several metrics. We also held a series of phone conversations with DL’s sales agents to discuss market reaction to pricing and what changes might be made to advance the situation. Field research We also turned our attention outward, examining how SPIE pricing &quot;fit&quot; with other publishers and interviewing collection development librarians and subject specialists from both current and prospective institutional subscriber lists. The objective of speaking to librarians was to help us uncover how price‐value perceptions were impacting subscriptions and renewals; the competitive space in which the SPIE Digital Library sits; and whether current pricing was off kilter, content should be re‐packaged, or the value of the product was somehow underestimated or misunderstood.
  • Several factors led us to conclude that SPIE’s Dl reach and revenue were likely to benefit by adjusting rates downward. We also learned that we could keep our tiered structure in place with some reconfiguring of tier definitions with some relatively minor changes
  • Adding an epic economic crisis and long tail recession made the long-standing serials budget crisis all the more poignant. If ever we were going to expand the reach of SPIE DL, it would be critical to hold on to our current subscribers through this extraordinarily turbulent period. We realized that it in order to do so we would need to be able to help them as much as we possibly could.ARL: It is the common view among research libraries that they, like many smaller libraries, are facing protracted budget reductions and cannot justify any expectation that cuts being implemented are anything but permanent.Source:
  • Although we considered many variations, we had three basic choices. We could either 1) hold rates, 2) discount rates, or 3) lower rates.We did not think that holding rates would provide enough of an incentive for new subscribers to come on and would offer little relief to those subscribers in lower tiers likely paying above market rates. So, option C was quickly sidestepped.Discounted rates was considered quite seriously. Although SPIE felt much more comfortable having a set rate and not deviating from it (we thought it was more equitable to our subscribers), we obviously were concerned about the money we would lose if we lowered rates across the board. The librarians with whom we spoke had wanted some room to negotiate rates. Our international network of sales agents wanted more latitude for negotiating sales. Targeted discounts held some appeal for these reasons. In the end, however, SPIE believed that reducing and altering our price classification system in order to allow for business growth in areas we were not reaching in combination with a price roll back that would benefit all of our current subscribers in this very tough economic period was the correct business choice.
  • The 10% price reduction applies to subscriptions to the full SPIE Digital Library, which includes the Proceedings of SPIE and all SPIE Journals, and to topical segment subscriptions. It does not apply to consortia arrangements, for which customized discounts are already applied, or to subscriptions to single SPIE Journals. However, 2010 prices for consortia will be frozen at 2009 rates.Additionally, the new pricing was fixed through 2012 for those subscribers who signed a three-year license commitment at the time of renewal
  • These actions are the result of a year-long study concerning future directions for the SPIE Digital Library, in which many librarians and researchers in North America, Europe and Asia participated. Based on that research, there are two primary objectives for reducing the price and restructuring tiers. The most important is a direct response to the clear message from librarians that the global economic situation on top of long-term budgetary pressures facing libraries warrants a new and more flexible approach to subscription models. A second objective is to better enable smaller research institutions and larger institutions with fewer or smaller relevant programs to have access to our content.
  • New price tiers (or bands) were introduced, so that smaller institutions and larger institutions with limited engineering programs have better opportunity to acquire SPIE content. Until now SPIE has used a four-tier pricing model, with tiers defined by factors such as FTEs, Carnegie rankings, institution size, and technology relevance. The new system adds a fifth tier with tier definitions adjusted to better accommodate some organization types. This change impacted a few current subscribers. Most customers remained in the same tier with a few moving down one tier (to a lower price); in no case was a current subscriber move to a more costly tier even if the tier definitions moved them to a higher tier. Changes in tier assignments are evaluated and discussed with the subscriber at the time of renewal.
  • According to the IMF (International Monetary Fund), the economies of the so-called BRIC countries—Brazil, Russia, India, and China already are expanding. The Middle East, Africa, and Mexico too. The US and Canada are expected to growmore slowly. Japan and Europe will likely see even lower rates of growth. Of note is that estimated recovery in 2010 and 2011 is flat in both situations, with developing countries growth rates exceeding that of advanced economies.
  • And I leave you with some musings:SPIE chose to drop it prices because we believe that it is good business for us to do so. We believe that in the near and long term publishing economics must change and we believe it is better for SPIE’s future to address that reality by shifting our business model rather than have it shifted for us without our control later. Our decision is a choice consistent with our not-for-profit educational mission and already has resulted in additional growth and a stronger subscriber base.Market growth and user demand are the factors that allow SPIE to commit to this path. As might be expected, we received much praise from our subscribers who thanked us when we announced our price rollback. But lurking was the concern that we’d just turn around and raise prices next year--Essentially making the price roll back little more than one year’s relief followed by a big increase that would erase the savings. But our commitment to our subscribers is this: if demand continues to grow for our content, if our market share continues to grow, we will hold the line on price increases and reduce fees each year where is it possible.Based on new business generated under our new pricing plan we are very pleased to be able to say that in 2011 we will be freezing prices at the 2010 rollback level. In 2012 if renewals hold and if new business continues to build as anticipated we will offer another rollback. There is an inherent and implicit irony here that is not lost on us nor possibly on you either: When SPIE dropped its prices, did the library thank us, and then use the savings to pay for a price increase by another publisher?How could that be in SPIE’s best interests? And we respond that having healthy libraries is in SPIE’s interest. Growing our market is in SPIE’s interest. “Being” and “being seen as” a part of a solution is in SPIE’s best interest. And in a small way, we believe that being willing to be leader and step out a little from conventional publishing wisdom is in SPIE’s best interest. And I end with some questions that are not mine, but belong to all of us:
  • Reset: One society's response to the new publishing economy

    1. 1. Reset: A publisher’s response to the changing economy<br />Marybeth Manning, <br />Director, SPIE Digital Library Sales & Business Development<br />UKSG 33rd Annual Conference and Exhibition<br />12 April 2010<br />
    2. 2. What brings me here today?<br />For 2010, SPIE took the unusual step of rolling back institutional subscription rates for its Digital Library by 10%.<br />
    3. 3. What am I going to talk about? <br />
    4. 4. Who is SPIE?the international society for optics and photonics<br /><ul><li> A not–for–profit international society—501c3 charity founded in 1955
    5. 5. The Society advances emerging technologies via its interdisciplinary information exchange through scientific conferences, continuing education programs, publications, patent precedent, and career and professional growth activities
    6. 6. Nearly 190,000 constituents from 138 countries, 15,000 members
    7. 7. Supports 150 student chapters worldwide
    8. 8. Provides nearly $2 million US annually in both dollars and in-kind support for scholarships, grants, and other education programs around the world
    9. 9. Publisher of the SPIE Digital Library. Also publishes print monographs, Tutorial Texts, Field Guides, reference books, print and online magazines, and variety of open access content</li></li></ul><li>What is Optics and Photonics?<br />Photonics World Market, Forecast<br /><ul><li> Eric-can you help me out with this slide?</li></li></ul><li>World’s largest collection of scientific and technical research in optics and photonics<br />6,500 volumes of SPIE conference proceedings <br />7 SPIE scholarly journals<br />300,000+ research papers in 2010; 18,000+/year<br />Full coverage from 1990 – present<br />125 eBooks<br />Interdisciplinary content<br />Micro / nanotechnology<br />Sensor technologies<br />Biomedical optics<br />Defense and security<br />Communications<br />Imaging<br />Lighting and Energy<br />Astronomy<br />What is the SPIE Digital Library?<br /><ul><li>Hosted by AIP Scitation
    10. 10. Archived via Portico
    11. 11. COUNTER III compliant
    12. 12. MARC records through OCLC
    13. 13. Subscriber co-branding available
    14. 14. IP authentication
    15. 15. No concurrent user restrictions; unlimited downloading
    16. 16. CrossRef linking
    17. 17. Citation metadata for easy download
    18. 18. Indexed in Scopus, Compendex, Inspec, Google Scholar, Scitopia, Chem Abstracts, and others
    19. 19. Multimedia</li></li></ul><li>What was our institutional business model for DL prior to 2010?<br />Subscription Model<br />Pricing Model<br /><ul><li>Tiered pricing model (4 tiers)
    20. 20. Market segment-based </li></ul>Academic: Carnegie and relevant programs<br />Government: Relevant FTE and programs<br />Corporate: Revenues and relevant FTEs<br /><ul><li>Full SPIE DL (access to everything including backfile) or Topical Collections
    21. 21. International team of sales agents
    22. 22. Originally based on print pricing
    23. 23. Tier 1 (large institutions) as base, with each lower tier more heavily discounted than the one above it.
    24. 24. Consortia pricing based on tier prices; the greater the number of member subscriptions, the higher the discounts.
    25. 25. Regional and country discounts keyed to World Bank and UN HDI economic data
    26. 26. Free or low-cost access to most INASP/PERI and eJDS participating countries</li></li></ul><li>What prompted us to re-assess SPIE DL’s pricing?<br />Plenty of positives<br />But also nagging concerns<br />33% growth in subscriptions from 2008-2009<br />99% renewal rate<br />90% of researchers rated SPIE DL as good or excellent<br />83% would recommend SPIE DL to colleagues<br /><ul><li>Complex model
    27. 27. Anecdotal evidence that pricing was high relative to the competition and perceived value in some parts of the world
    28. 28. Suboptimal penetration into some target market segments
    29. 29. We felt we could not dismiss or minimize the economic realities facing current and prospective subscribers</li></li></ul><li>Was there a better way to do it?<br />Objective<br />Goals<br />To develop a sustainable pricing strategy that <br />increases global access to SPIE content and <br /> supports the research community<br />Achieve an optimal balance of reach and revenues<br />
    30. 30. What did we do to identify and <br />evaluate our alternatives?<br />Situation Analysis<br />Field Research<br /><ul><li>Editorial Content
    31. 31. Subscription model
    32. 32. Pricing
    33. 33. Cost-per-download
    34. 34. Circulation
    35. 35. Revenues
    36. 36. Market size analysis
    37. 37. Competitive landscape analysis
    38. 38. Researcher User surveys
    39. 39. Librarian and customer input—both subscribers and non-subscribers who had expressed interest but not purchased
    40. 40. Sales agent feedback</li></li></ul><li>What did we learn, relevant to <br />our objective?<br /><ul><li>Tiered model understood and acceptable, but
    41. 41. Smaller institutions or larger institutions with smaller or fewer relevant programs need tiering consideration
    42. 42. Corporations prefer pricing based on usage (maybe 2011)
    43. 43. Cost/use for low tiers might be too high
    44. 44. Cost/download increasing important metric
    45. 45. Sales agents and librarians desired room for negotiation
    46. 46. Promotional discounting appealed to market
    47. 47. Topical Collection subscriptions were growing at a faster rate than the full digital library
    48. 48. Market penetration low in some market segments and some price tiers </li></li></ul><li>What environmental factors were <br />at play?<br /><ul><li>Flexible pricing that offers customers real options, including the ability to reduce expenditures without disproportionate loss of content, will be the most successful;
    49. 49. It is in the best interest of both publishers and consortia to seek creative solutions that allow licenses to remain intact as long as possible, without major content or access reductions. </li></ul>Statement on the Global Economic Crisis <br />and Its Impact on Consortial Licenses<br />January 19, 2009<br />Statement on the Global Economic Crisis <br />February 19, 2009<br />
    50. 50. Acknowledging the value in charging<br />less, what alternatives did we have?<br />Lower prices: long-term strategic solution<br />Discount prices: situational<br />flexibility<br />Freeze prices: short-term response to economy<br />
    51. 51. How did we lower our prices?<br />Process<br />Implementation<br /><ul><li>Discussions with executive management
    52. 52. Financial scenarios and impact projections
    53. 53. 10% reduction on subscriptions to full SPIE DL and Topical Collections
    54. 54. New pricing fixed for three years with three-year license commitment
    55. 55. Not applicable to already-discounted consortia arrangements although prices for 2010 were frozen at 2009 levels
    56. 56. Tier revisions: addition of 5th tier and redefinition of tier categories and pricing</li></li></ul><li>Ultimately, why did we change?<br />
    57. 57. How did we address the need to <br />restructure the tiers?<br /><ul><li>Tier revisions
    58. 58. Added a 5th tier
    59. 59. Accommodations made for for smallerorganizations and larger organizations with limited engineering programs or specialized needs
    60. 60. Allowed introductory discounting to enable institutions to test degree of interest
    61. 61. Examine cost per download as factor in assessing value to the institution and appropriate tier placement in renewal.
    62. 62. Corporate pricing changes: still to be addressed </li></li></ul><li>How did we communicate our decision?<br />As a not-for-profit educational society, SPIE strives to meet its responsibility to consider the economic challenges facing the educational and research community. In the current global economic climate, SPIE realizes that libraries are faced with tighter budgets than ever before for acquiring needed resources.<br />A combination of careful stewardship and steady growth of the subscription base since the launch of the SPIE Digital Library in 2003 are enabling the Society to roll back prices without reducing services, features, or content. Through this price decrease, we hope to enable access to this information for many more researchers, students, and inventors around the world. <br />Eugene Arthurs, SPIE Executive Director <br />May 28, 2009<br />
    63. 63. How did we fare?<br /><ul><li>2010 renewals have been robust.
    64. 64. We lost one consortium in 2010 due to the economic crisis.
    65. 65. 99% renewal rate for all other accounts consistent with pre 2010 performance
    66. 66. New business since our announcement in June 2009 has exceeded 2009 growth levels.
    67. 67. New business has been across all tiers, but particularly strong in the new lower tiers.
    68. 68. Looking beyond 2010, SPIE plans to continue to seek ways to moderate price increases and potentially continue rollbacks as our subscriber base grows.</li></li></ul><li>How applicable is SPIE’s response to the scholarly publishing community<br />
    69. 69. Questions for all of us<br /><ul><li>Is one lone not-for-profit’s actions meaningful in any way in the larger context of scholarly publishing? Does that put SPIE’s action under the heading of “titling at windmills” and meaningless in the larger arena?
    70. 70. A number of publishers froze prices in 2010 in respond to the library’s plea for addressing the continued and ever escalating price increases. But is the fundamental dilemma for libraries so rooted in their arrangements with the mega publishers and the ‘big deals” that any action outside of this by any non-profit or non-mega is meaningless?
    71. 71. And if libraries do not, or can not, act by changing their spending approach, in essence voting with their dollars or euros or pounds, who then who is to blame for the continuing trends in increased pricing?
    72. 72. And more importantly perhaps is the question: what does the future hold if all continues without change?</li></li></ul><li>Thank you,<br />Marybeth Manning<br />Director, SPIE Digital Library Sales <br /> and Business Development<br /><br />UKSG Stand # 46<br />