Reset: A publisher’s response to the changing economyMarybeth Manning,

Director, SPIE Digital Library Sales & Business Development

UKSG 33rd Annual Conference and Exhibition

12 April 2010

What brings me here today?For 2010, SPIE took the unusual step of rolling back institutional subscription rates for its Digital Library by 10%.

What am I going to talk about?

Brief background on SPIE and SPIE Digital Library

Reasons for and approach to SPIE’s pricing review

Lessons learned and decisions made

Community response and early assessment

Applicability to the larger scholarly publishing community?

Who is SPIE?the international society for optics and photonics A not–for–profit international society—501c3 charity founded in 1955

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

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 programs around the world

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

What is Optics and Photonics?

Eric-can you help me out with this slide?

Photonics World Market, Forecast

What is the SPIE Digital Library?

World’s largest collection of scientific and technical research in optics and photonics

6,500 volumes of SPIE conference proceedings

7 SPIE scholarly journals

300,000+ research papers in 2010; 18,000+/year

Full coverage from 1990 – present

125 eBooks

Interdisciplinary content Micro / nanotechnology

Sensor technologies

Biomedical optics

Defense and security

Communications

Imaging

Lighting and Energy

Astronomy

•Hosted by AIP Scitation

•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

What was our institutional business model for DL prior to 2010?

Subscription Model Pricing Model

Tiered pricing model (4 tiers)

Market segment-based

Academic: Carnegie and relevant programs

Government: Relevant FTE and programs

Corporate: Revenues and relevant FTEs

Full SPIE DL (access to everything including backfile) or Topical Collections

International team of sales agents

Originally based on print pricing

Tier 1 (large institutions) as base, with each lower tier more heavily discounted than the one above it.

Consortia pricing based on tier prices; the greater the number of member subscriptions, the higher the discounts.

Regional and country discounts keyed to World Bank and UN HDI economic data

Free or low-cost access to most INASP/PERI and eJDS participating countries

Plenty of positivesBut also nagging

concerns

33% growth in subscriptions from 2008-2009

99% renewal rate

90% of researchers rated SPIE DL as good or excellent

83% would recommend SPIE DL to colleagues

Complex model

Anecdotal evidence that pricing was high relative to the competition and perceived value in some parts of the world

Suboptimal penetration into some target market segments

We felt we could not dismiss or minimize the economic realities facing current and prospective subscribers

What prompted us to re-assess SPIE DL’s pricing?

Was there a better way to do it?

Objective Goals

To develop a sustainable pricing strategy that (1) increases global access to

SPIE content and (2) supports the research

community

Achieve an optimal balance of reach and revenues

Situation Analysis Field Research

Editorial Content

Subscription model

Pricing

Cost-per-download

Circulation

Revenues

Market size analysis

Competitive landscape analysis

Researcher User surveys

Librarian and customer input—both subscribers and non-subscribers who had expressed interest but not purchased

Sales agent feedback

What did we do to identify and evaluate our alternatives?

Tiered model understood and acceptable, but

Smaller institutions or larger institutions with smaller or fewer relevant programs need tiering consideration

Corporations prefer pricing based on usage (maybe 2011)

Cost/use for low tiers might be too high

Cost/download increasing important metric

Sales agents and librarians desired room for negotiation

Promotional discounting appealed to market

Topical Collection subscriptions were growing at a faster rate than the full digital library

Market penetration low in some market segments and some price tiers

What did we learn, relevant to our objective?

What environmental factors were at play?

Flexible pricing that offers customers real options, including the ability to reduce expenditures without disproportionate loss of content, will be the most successful;

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.

Statement on the Global Economic Crisis and Its Impact on Consortial LicensesJanuary 19, 2009

Statement on the Global Economic Crisis February 19, 2009

Acknowledging the value in chargingless, what alternatives did we have?

A

B

C

Lower prices: long-term strategic solution

Discount prices: situationalflexibility

Freeze prices: short-term response to economy

Process Implementation

Discussions with executive management

Financial scenarios and impact projections

10% reduction on subscriptions to full SPIE DL and Topical Collections

New pricing fixed for three years with three-year license commitment

Not applicable to already-discounted consortia arrangements although prices for 2010 were frozen at 2009 levels

Tier revisions: addition of 5th tier and redefinition of tier categories and pricing

How did we lower our prices?

Ultimately, why did we change?To respond proactively to the clear message from the librarian community about the financial pressures facing libraries

To better enable smaller organizations and larger institutions with fewer or smaller relevant programs to gain access

Tier revisions

Added a 5th tier

Accommodations made for for smaller organizations and larger organizations with limited engineering programs or specialized needs

Allowed introductory discounting to enable institutions to test degree of interest

Examine cost per download as factor in assessing value to the institution and appropriate tier placement in renewal.

Corporate pricing changes: still to be addressed

How did we address the need to restructure the tiers?

How did we communicate our decision?

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.

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.

Eugene Arthurs, SPIE Executive Director May 28, 2009

How did we fare? 2010 renewals have been robust.

We lost one consortium in 2010 due to the economic crisis.

99% renewal rate for all other accounts consistent with pre 2010 performance

New business since our announcement in June 2009 has exceeded 2009 growth levels.

New business has been across all tiers, but particularly strong in the new lower tiers.

Looking beyond 2010, SPIE plans to continue to seek ways to moderate price increases and potentially continue rollbacks as our subscriber base grows.

How applicable is SPIE’s response to the scholarly publishing community

Questions for all of us

• 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?

• 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?

• 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?

• And more importantly perhaps is the question: what does the future hold if all continues without change?

Thank you,Marybeth Manning

Director, SPIE Digital Library Sales

and Business Development

marybeth@spie.org

UKSG Stand # 46