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AAUP 2011: New Business Models (J. Esposito)


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AAUP 2011: New Business Models (J. Esposito)

  1. 1. Joseph J. Esposito [email_address] AAUP 2011 Baltimore, MD
  2. 2. <ul><li>Business models/revenue models </li></ul><ul><li>The four categories of revenue streams </li></ul><ul><li>Hybrid models </li></ul><ul><li>Special cases </li></ul><ul><li>Analyzing new ventures </li></ul>
  3. 3. Traditional model (“user pays”) Inverted open access model (“author pays”) Marketing services Institutional sponsorship
  4. 4. <ul><li>Traditional and most common form of publishing </li></ul><ul><li>Sometimes a user is represented by a proxy (e.g., a library, a K-12 school district) </li></ul><ul><li>Market-based—this is both good and bad </li></ul><ul><li>Competition makes for better offerings </li></ul><ul><li>Ineffective when the market is small or nonexistent </li></ul>
  5. 5. <ul><li>Not all users can pay—the access problem </li></ul><ul><li>Pressure on library budgets aggravates access problems </li></ul><ul><li>Dominant players shape marketplace to their own advantage </li></ul><ul><li>Monopoly nature of copyright potentially interferes with some noncommercial use </li></ul><ul><li>DRM inconveniences users </li></ul>
  6. 6. <ul><li>Established by BioMed Central; copied by PLOS, Wiley, Sage Open, etc. </li></ul><ul><li>Not to be confused with vanity publishing </li></ul><ul><li>Unproven (even untested) for long-form works </li></ul><ul><li>Probably best for works of limited circulation (not many readers to share costs) </li></ul><ul><li>Open access aspect removes reader access issues; opens up extensive Web interactions </li></ul>
  7. 7. <ul><li>Advertising is best-known of these </li></ul><ul><li>Other services include lead generation, promotional use of content (sampling), data collection for direct marketing </li></ul><ul><li>Requires extensive technical infrastructure </li></ul><ul><li>Tremendous competition for online ads </li></ul><ul><li>Requires an audience of meaningful size </li></ul><ul><li>Better for some categories than others </li></ul>
  8. 8. <ul><li>Funding from universities, philanthropies, governmental agencies </li></ul><ul><li>Primary funding mechanism for higher education </li></ul><ul><li>Primary source for libraries </li></ul><ul><li>Presses may struggle to get this support </li></ul><ul><li>Funders can be fickle </li></ul>
  9. 9. <ul><li>The “freemium” model </li></ul><ul><li>Licensing </li></ul>
  10. 10. <ul><li>“Free” + “premium” </li></ul><ul><li>Free content used to attract audience </li></ul><ul><li>Special content or services are offered for a fee </li></ul><ul><li>Really a hybrid: </li></ul><ul><ul><li>Free content = marketing service </li></ul></ul><ul><ul><li>Premium content = user-pays model </li></ul></ul>
  11. 11. <ul><li>Not to be confused with client licensing for digital products </li></ul><ul><li>Subsidiary rights </li></ul><ul><li>Strictly a B2B affair </li></ul><ul><li>Typically a user-pays situation at one remove </li></ul><ul><ul><li>Originating publisher licenses material to another publisher (e.g., translation rights) </li></ul></ul><ul><ul><li>Second publisher establishes traditional model in its own market </li></ul></ul>
  12. 12. <ul><li>#1: </li></ul><ul><ul><li>Publish a book (user pays) </li></ul></ul><ul><ul><li>Receive subvention for plant cost (institutional support) </li></ul></ul><ul><ul><li>In later years, put book online as open access (institutional support) </li></ul></ul><ul><ul><li>Sell POD for online book (marketing service plus user pays) </li></ul></ul>
  13. 13. <ul><li>Write and publish an article </li></ul><ul><ul><li>Research for article supported by grant (institutional support) </li></ul></ul><ul><ul><li>Submit article to open access service (author pays) </li></ul></ul><ul><ul><li>Service derives some income from advertising (marketing service) </li></ul></ul><ul><ul><li>Article aggregated with others; sold in print coursepack (user pays) </li></ul></ul>
  14. 14. <ul><li>Marketing services limited for scholarly works </li></ul><ul><ul><li>Audiences mostly too small for advertising </li></ul></ul><ul><ul><li>Deceptively painless because no direct cost </li></ul></ul><ul><ul><li>Open access plus POD: not sustainable in itself </li></ul></ul><ul><ul><li>Online forms weaker than print for ads </li></ul></ul>
  15. 15. <ul><li>Institutional support must be a component </li></ul><ul><ul><li>Some products literally have no market </li></ul></ul><ul><ul><li>Absence of institutional support turns entire field over to commercial ventures; aligns publishing solely with profit </li></ul></ul><ul><ul><li>But institutional support is weakening at this time </li></ul></ul>
  16. 16. <ul><li>Author-pays model has limitations </li></ul><ul><ul><li>New model; not fully tested </li></ul></ul><ul><ul><li>Requires significant technical infrastructure </li></ul></ul><ul><ul><li>Already “staked out” by commercial companies </li></ul></ul><ul><ul><li>Limited author budgets; problems for long-form works </li></ul></ul><ul><ul><li>Least valuable for publications with wide audience </li></ul></ul>
  17. 17. <ul><li>Strains in traditional model (user pays) </li></ul><ul><ul><li>Library budgets under pressure </li></ul></ul><ul><ul><li>Physical bookstores pulling back </li></ul></ul><ul><ul><li>Enormous dependence on one channel (Amazon) </li></ul></ul><ul><ul><li>Little D2C infrastructure in place </li></ul></ul><ul><ul><li>Publishing electronically does not alter the key issues fundamentally </li></ul></ul><ul><ul><li>But globalization may open new markets </li></ul></ul>
  18. 18. <ul><li>Seek hybrid models </li></ul><ul><li>Seek institutional support only as last resort and temporarily </li></ul><ul><li>Be wary of marketing services as magic bullet </li></ul><ul><li>Seek new customers through traditional model and author-pays (author as customer) </li></ul><ul><li>Align program with evolving demand, especially in global markets </li></ul>