© Rightscom 2009 – All rights reserved Clubs, jokers and the ace of spades: consortia and...

© Rightscom 2009 – All rights reserved

Clubs, jokers and the ace of spades: consortia and business models beyond the Big Deal

Hugh LookSenior Consultant, Rightscom Ltd

UKSG conference 2009: Hugh Look

© Rightscom 2009 – All rights reserved/ 2

Of course I'm an optimist

"If we maintain our faith in

God, our love of freedom, and

superior global air power, I

think we can look to the

future with confidence."

General Curtis LeMay, mid-1960s

© Rightscom 2009 – All rights reserved

Torquay, trains and terrorism

A short diversion into

family history



“Oligarchies are seldom

destroyed. They more

frequently commit suicide”＞ Lord Reay, at the time of Lloyd

George’s Finance Bill



“System cruel”



Today’s pressures: libraries

Already well described by Jill; more to come from Katherine Exchange rates Inflexible big deal subscription models Tension with academics Increasing “libraries don’t matter any

more” thinking Collection development still essential Increasing gold OA costs Holding consortia together under

pressure



Today’s pressures: publishers

Problems sustaining margins Increasing pressure from customers

for more flexible model Less capital available/harder to

get investment agreed Impact of public policy

developments The share price/value to society The other parts of the business



But what of tomorrow’s pressures?




Continuing economic uncertainty: a shared problem How much will we have to spend? How can we sustain our markets? Could the sky fall in?

Changes in research & education Boundaries between institutions

becoming more flexible Funders looking for different

value A drive to economic impact?




The impact of developments already underway Publication charges Repositories Free access

More demanding students What pattern emerges?

Problems for the subscription model

This does not mean it’s fatal!＞ (But it might be)



Economic context



Economic context

Double-digit declines in funding for content

Exchange rates Impact of recession on other divisions of

publishers Impact on other functions of institutions Continuing growth in new markets

High potential, but must offer very high value to secure business

Impact on planning Short-range visibility only



Two models pulling in different directions? Consortium deals

Size gets better deals＞ Cost and T&Cs

Scale allows for acquisition of “surplus” resources at marginal cost

＞ Higher perceived value Change can be slow

＞ The cost of doing politics Big deals

Limit to what can be achieved – customer size “Surplus” resources have actual cost

(tradeoffs) Change easier to implement in theory – 1 to 1 In practice, bargaining power limits

flexibility



Responding to threats



Responding to threats

Fight Try to stop it happening

Flight Give in, exit the sector

Face-off Stare down the other side, ignore problems,

pretend it’s not happening (or at least, not to you)

Fix Make it more attractive for people to stick with

the existing model Follow

Stay in, accept alternatives are needed Faff

Dither, tinker, hope it will get better



How has the sector responded?

…and I’m including publishers and libraries here: interdependent components

Combination of Fight, Fix and Face-off With quite a lot of added Faff And a small amount of Follow

Fight and Face-off can involve politics Fix is mainly tactical solutioneering Faff is…well, faff

Faffing can look like fixing Confusing the two is very tempting… and

very dangerous



A guide to the options



A guide to the optionsOption Publishers LibrariesFight Lobby; spend money on

consultants; become indignantLobby; get someone to spend money on consultants; become indignant

Flight Sell the business (but who to?); close the business; turn out the lights

Devolve everything to academic departments; turn out the lights

Follow Accept revenue loss from new models

Cost & pain of transition to new models

Fix Big deal; better terms; more/enhanced product

Consortia; add more users; negotiate limited additional flexibility

Face-off Maintain prices, deals; accept (short-term?) loss of business

Refuse to pay more/accept less; cancel; face (short-term?) hostility from users

Faff Make many small changes; trivial experiments; whinge that libraries are never satisfied

Whinge about changes being disruptive; whinge about changes not going far enough



Viable options

Follow Fix Or some combination of the

two? Are they compatible?



Any option only viable if…



Fix

Make it more attractive for people to stick with the existing model

Often comes about as a response to Face-off The internal combustion engine as we know it “Superconsortia”

The same but bigger Up to national level? Cost/time involved in setting up

Increased flexibility in big deal Rule-driven models lead to binary decisions

Create efficiencies that allow reduced prices without lower margins

Sounds a bit like Faff?



Follow

Stay in, accept alternatives are

needed Change pricing model (again) Redistribute functions and costs

i.e. change where value is added and

paid for＞ Examples: Gold OA, overlay journals

Let the academy do more＞ Allows overhead reduction for publishers＞ Lower prices, but maintain margin



Redistributing roles: where do you find value in a networked world? At the periphery - closest to the user,

where specialist expertise is needed and relationships developed Control of the user interface Individualised experiences

At the core - where the shared infrastructure and expertise is Generic Benefit from scale

Not in the middle, with the process and pipeline operators



Alternative models

Advertising, sponsorship But not a good climate at the moment

Usage pricing We all know it creates barriers

Cheap subscriptions with usage caps Mobile phones How much feedback do users need?

No publishing company has a back office that could sustain this level of transaction Volume Complexity



What really matters?

Transition, transition, transition Many of these models could work The problem is the cost and

disruption involved (for everyone)

in getting there Can only be managed system-wide



Is this a solvable problem?

And if not, what do we do about it? If it works for libraries, it won’t

work for publishers? Is it cyclic?

Probably, but impossible to predict the length of this phase

Managing polarities is a key skill We all have to live with high levels of

uncertainty There is a lot more Face-off and Fix to

come



It’s never too late



Or is it?



„Gegen die Dummheit, kampfen die

Gotter selbst umsonst“

Schiller



Thank you

Hugh Look

Rightscom Ltd

www.rightscom.com

© Rightscom 2009 – All rights reserved Clubs, jokers and the ace of spades: consortia and...

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