1. Value-Based Pricing:
What, Why, and How It’s
Going
SSP Pricing and Licensing Seminar
Washington, DC
November 14, 2007
Adam Chesler
American Chemical Society

2. Value-Based Pricing: What is it?
What is “value”?
 “the amount of a commodity, service, or medium of
exchange that is the equivalent of something else:
a fair return in goods, services, or money” (Webster's
Third New International Dictionary, Unabridged.
Merriam-Webster, 2002.
http://unabridged.merriam-webster.com (12 Nov.
2007)).
 Assigned by consumer, not provider
Bergstrom/MacAfee studies
 http://www.econ.ucsb.edu/
%7Etedb/Journals/jpricing.html
 http://www.journalprices.com/

3. Why are we talking about it?
Opportunities offered by technology
 Better assessment tools
Usage statistics/downloads
Referrals
Tracking authorship and citations (future)
 Multi-site access
Institutional
Consortial
Decoupling of print and electronic
 Different concepts of “value”
 Different means of assessing and deriving it
 Customer demands: move away from print subs as
basis for digital pricing
 Better way to price new publications
Opportunity to generate new revenues

4. Building value
Leveraging technology
 Website design
 New tools/features to draw traffic, usage
Discoverability
 Metadata
 Search engine optimization/relationships
Linking
 Forward/backward
 Inward/outward
Partnerships
 Gateways
 Aggregation

5. Developing a Value-Based
Pricing Model
“Lasciate ogni speranza, voi, che'entrate.”
(Dante Alighieri, La commedia, ca. 1321)
Look at available measures of value that
customers use; for instance,
 Downloads
 Citations/impact factor
 Output
Tailor prices and offerings to different user
populations
Apply these measures to publishing program

6. Keep in mind…
Archiving
 “Permanent” availability of every item
Customization
 Segmentation by institution type and size
Global distribution
 Established vs new markets
Web diverges from print
 Different features

7. ACS Value-Based Pricing Model
Segmented markets
 Academic
Tiers/Sub-tiers
Volume-based discounts
Consortial benefits
Title weightings (core of VBP)
 Non-Academic
Segmented further
Usage-based tiers
Attractive entry points

8. Challenges
Granularity = complexity
Implementation
The customer see-saw
Transition period
Trading partners
Communication
Evolution
Open Access
Pay per view
New kinds of journals

9. Is Value-Based Pricing Taking
Root?
Early days
 Some providers have adopted tier- or other
VPB-models
APS
Project Muse
What’s the best model?
 “Le mieux est l'ennemi du bien.” (Voltaire,
Dictionnaire Philosophique, 1764)

10. Contact Information
Adam Chesler
Assistant Director, Library Relations and Customer Service
American Chemical Society
1155 16th Street NW
Washington, DC 20036
Office Telephone: (202) 872-6183
Mobile Telephone: (202) 465-0057
E-Mail: a_chesler@acs.org