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Our Friends Are Killing UsLorraine Busby aa Queen Elizabeth II Library, Memorial University of Newfoundland ,St. John's, Newfoundland, CanadaPublished online: 09 Aug 2011.

To cite this article: Lorraine Busby (2011) Our Friends Are Killing Us, The Serials Librarian: From thePrinted Page to the Digital Age, 61:2, 160-167, DOI: 10.1080/0361526X.2011.591577

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The Serials Librarian, 61:160–167, 2011Copyright © Taylor & Francis Group, LLCISSN: 0361-526X print/1541-1095 onlineDOI: 10.1080/0361526X.2011.591577

THE BUSINESS OF SERIALSEdited by Lorraine Busby

Our Friends Are Killing Us

LORRAINE BUSBYQueen Elizabeth II Library, Memorial University of Newfoundland, St. John’s,

Newfoundland, Canada

The benefits and limitations of library consortia for acquiring seri-als are examined and explored through examples and experience.Underlying assumptions predicating group purchasing of serialsare scrutinized for their role in endorsing this pervasive purchaseoption.

KEYWORDS consortia, group purchasing, purchasing alliances

When I was actively involved in assessing and responding to consortiumoffers there were times when the group response was “our friends are killingus.” Yet another well-meaning publisher would have submitted an offer tothe consortium with the hope and expectation that its effort to consolidatesales through group purchasing would be enthusiastically embraced by uslibrarians. Usually the offer was a Big Deal option although the emphasis on“big” was generally a misnomer as these publishers were more often thannot fairly small, specialized publishers with a limited number of titles. If notactual society publishers, the specialized nature of the publications tendedto be high quality, moderately priced, and of solid interest to at least someconsortium members, hence the classification of “friend.” While the offerwas always well meaning, the publishers frequently missed some criticalelement that meant the business transaction was less than appealing to thelibrarians assessing the potential deal. Friendly publishers, in an effort tomaintain corporate survival, adopted tactics of the big publishers. The resultwas that librarians were placed in the conflicted position of having to decide

Address correspondence to Lorraine Busby, University Librarian, Queen Elizabeth IILibrary, Memorial University of Newfoundland, St. John’s, NL Canada A1B 3Y1. E-mail:lbusby@mun.ca

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to scrape together yet more serial money for yet more journal titles, albeitgenerally high quality and specialized content that deserved to be published.As cliché as it is, “with friends like that, who needs enemies?”

Almost all libraries are involved in one or more consortium andhave been for many years. It can be argued that the American LibraryAssociation (ALA)’s creation of the Committee on Cooperation in Indexingand Cataloguing College Libraries in 1876 was the start of a long tradi-tion of working collaboratively. In 1901 the first regional union catalog atthe California State Library was established. Then, in 1987, Ohio started astate-wide catalog service that was herald as the modern era of consortia aswe know them today. More recently, cooperative purchasing of databasesbegan in 1990 with OhioLINK offering its members four databases. Todaylibrary consortia number over 200 in over 40 countries. Generally consortiawill garner membership and align along geographic lines or type of library.Membership can range from a few specialized libraries up to national par-ticipation of all sector libraries in a country. The most popular consortia canhave a membership approaching 1,000 libraries. Frequently libraries willparticipate in multiple consortia to benefit from a wider range of desirableproducts and services.

It is amazing how much mystique and awe is awarded to consortia. Onewould think that the very best prices are only possible through the magicof consortial negotiation. Library students through to library directors arefond of championing group purchasing, yet those extolling the benefits ofcooperative buying do not necessarily have personal experience in negoti-ating deals. Students rarely are able to articulate the details of a deal to backtheir beliefs and at the library director level there also is limited awarenessof the deal details yet there remains a conviction of the intrinsic worth andvalue of group buying. Even many front line librarians are confident thattheir institutions are benefiting from consortia purchasing without botheringto seek supporting evidence. As with all generalities, there are exceptions.I do know librarians who have challenged and tested assumptions to gainevidence to back their perceptions that individual pricing is either higheror lower than the group offering. They are the exceptions as most librari-ans I interact with trust the consortium to do its job. This trust leads to theuntested belief that the best deal possible comes from a consortium.

Surely something so basic to our economic well being would not sur-vive and thrive unless there are true financial benefits to all. Literature fromboth our profession and other disciplines, however, suggests that businessalliances are challenging to manage and are potentially difficult to keepviable. There are a number of reasons why an alliance can thrive or failwith one report suggesting that more than half of these alliances actuallyfail or are disbanded or dissolved.1 In the library environment there havebeen recent mergers of consortium but few library consortia are acknowl-edged as failures. Usually a project failed2 rather than the failure of ongoing

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162 L. Busby

joint efforts formalized under a structured network. I have little reason tobelieve that library consortia are more successful at staying in operation thanother sector alliances, which suggests that either more effort is expended bylibrarians in cooperative continuity or we ignore or downplay the difficultiesassociated with this purchasing model.

Consortia can and do achieve noteworthy benefits for our libraries soI am not proposing that we boycott consortia and each institution take onindependent negotiations. Rather, I think it is important for our professionto be realistic about what is possible to achieve and to understand thepotentially serious limitations of working though a secondary partner. Tobe fair, the positive outcomes of group acquisitions should be articulatedand celebrated. These include:

● Lower costs for goods and services● Increased access to existing and new resources● More quantity of resources● Reduced/shared risk to gain common/shared rewards● Shared negotiations; the ability to draw on expertise not available in one’s

own library

Kudos for a job well done when these benefits are achieved. As alreadynoted, it is difficult to coordinate multiple institutions into a coordinated andcohesive buying club. When it works well there should be acknowledgmentof the successes.

The significance of the last two benefits noted above should not beunder estimated. Some libraries have neither the people nor the time todevote to negotiating licensing deals and assessing their value. It is diffi-cult to become proficient without practice and exposure to different issuesthat arise when contracting for various products. Assuming that consortiaare here to stay, some library directors have deliberately eliminated internalpositions that previously did the work now undertaken by the consortium.It then becomes critical for these libraries to continue participating in con-sortia to provide the expertise no longer available in-house. Some consortiaprovide licensing guidelines which are helpful but there still is a need forskilled negotiators to represent library interests when there is no expertisewithin the staff complement. Knowing that sister institutions find a dealacceptable can allow fast tracking a commitment to the same product with-out full scrutiny of the details of the proposal. Handing these responsibilitiesto a trusted partner can be very appealing—the library gets more quantityof desired serials at lower cost with trusted experts handling the negotiationdetails and the roll out for access. What more could be wanted?

Perhaps the answer is assurance that the business commitment is appro-priate for individual institutions and not just good for the collective. Thehistory of library cooperation is legendary; our profession takes great pride

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in working for the best interests of our users. Best practices in business, onthe other hand, suggest a more self centred attitude focused around iden-tifiable value to each business partner. It would be helpful to have morediscussion around good business practices that balance self-interest withcollective interests. Perhaps then the limitations of consortium deals wouldbe more openly acknowledged and examined more closely. Some of theseissues include:

● Not all publishers have pricing models for consortia● Not all deals are good for all members at all times● Big Deals are favored, thereby perpetuating a “just in case” acquisition

strategy● Lack of options for adding or excluding content; limited cancellation

options● “Free” or extra titles have actual costs to process and maintain● Distraction from the real issue, which is usage of serials that are needed● The process is lengthy and time consuming; the more libraries participat-

ing in a deal the longer the process to coordinate and finalize● Paying for consortium staff diverts money from acquiring new resources

It is well known within our profession that about a dozen very large com-mercial publishers produce the lion’s share of journals desired by academiclibraries. While there is a theoretical base of about 24,000 peer reviewedjournals of potential interest to libraries, the reality is that the lower pricesand specialized nature of most of these titles seriously restrict the potentialwin–win expected from effective group buying with a publisher. Already themarket has seen immense consolidation of serials publishing through thebusiness practice of mergers and acquisitions which suggests solo sellinghas limitations for serial profitability. Consortia, as group buyers, can builda product list for the largest publishers, as well as a few mid-size publishers,after which databases flesh out the remaining products being managed bythe consortia. Even combining serial packages with databases leads to veryfinite product lists as these are overwhelmingly the most expensive prod-ucts in the publishing industry and our limited budgets constrain how manypackage deals are possible before the money runs out.

As more and more publishers market to library consortia the first lim-itation is declining. Nonetheless this does not mean all consortium pricesreflect true value to libraries. There will always be small or specialized pub-lishers without the critical mass of titles or without the subscription baseor without a selling price that provides leverage on which to negotiate agroup deal. Last year I refused to participate in a consortium order for asmall publisher’s package of 15 science serials because the overall savingswas just over $1,000 for the package or about $70 dollars of savings pertitle. I figured the overhead costs to run this deal through a consortium

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would negate any real savings. While a thousand dollar savings sounds pos-itive, closer scrutiny of serials prices is needed. As already noted, publishershave responded to libraries’ demand for group buying with a consortiumprice. The price model may vary but the establishment of the model signi-fies the publisher is open to undertake business through a collective body.More and more these price models are set with less and less opportunityto negotiate savings. To realize better savings the group has to add moremembers, increase the size of the user community using the resources,or otherwise signify increased spending by the group. Theoretically thisis a win-win for both sides; practically this model breaks down once thereare no more libraries to join in or when libraries cancel to balance theirbudgets.

Complications also arise because libraries are not in a position to “shoparound” for serial purchases. There is a list price that must be paid if orderingdirectly from a publisher; if ordering through a serial vendor, a service feeis added to the journal cost. Buyers of serials are never able to negotiate aprice except when dealing with the content owner or when considering apricing model used by consortia such as the Big Deal. It is only by agreeingto pay more through the acquisition of all titles in a publisher’s suite that theability to negotiate the extent of the “more” becomes a possibility. Additionalrevenue to the publisher is a precondition to negotiations. To ensure a win–win outcome, libraries also expect to receive “more,” which leads to thefull suite of titles, which contains some serials that libraries otherwise wouldnever purchase.

Libraries participate in multiple consortia yet obviously do not buy thesame product from multiple sources. Each consortium has a limited num-ber of products which are of particular interest to its member libraries, andthe volume of business will be in relation to the consortium size, its over-head costs, and its staffing component, whether volunteers from memberinstitutions or paid consortium staff. Regardless of the size of the opera-tion there is overhead to maintain group efforts and this overhead must bepaid by member libraries. When participating in multiple consortia a libraryis paying for multiple overhead costs without necessarily rationalizing thisexpense. Open and frank discussions about the costs of running a consor-tium versus the savings achieved would be helpful to determine whether wehave a saturated market and whether libraries are over supporting strategicalliances as a mechanism to acquire the content we want and need.

Equally problematic is the value that accrues from a consortium deal.Despite the perception that these deals are the “best” not all deals benefitlibraries equally and it is not necessarily in a library’s best interest to alwaysparticipate in a deal. If, as noted above, a library relies upon consortiumstaff to undertake all negotiations for the library it will be difficult for a smalllibrary to assess the worth of these deals when there is no one on staffwith this expertise. Usually the library “trusts” the consortium and therefore

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agrees to deals on the decision point of local affordability. In these cir-cumstances false premises can influence decisions without necessarily beingchallenged. As an example, I know of some small libraries that convincedtheir administration to join a consortium and provide new funding for aBig Deal because of promised savings which were listed as the differencebetween the total list prices of a journal publisher’s complete title list and thenegotiated price for the corresponding Big Deal. The libraries happily joinedthe consortium only to learn that some librarians (including myself) questionthe logic. No library anywhere in the world would pay the full list price for apackage deal and no library rationally would subscribe to all titles outside aBig Deal, thereby negating the base price from which the supposed savingsderived. Distress settled in on realizing that the justification relayed to admin-istration, although compelling to those institutions, was actually based on afaulty premise. Without an understanding of the fundamentals of consortiallicensing and negotiations, misleading conclusions were perpetuated.

It is reasonable to expect business operations to be justified by theirability to meet performance expectations and measures. Publishers under-stand this imperative as evidenced by the decades-long “serials crisis.”For years libraries were vulnerable, caught between faculty members whoinsisted on continuing subscriptions regardless of cost and university admin-istrators who insisted the library live within its budget. Fast forward to thepresent and have we learned to demand a return on investment of ourtime, energy, and financial resources which are directed through consortia?Indeed, multiple research reports note that the failure to use formal perfor-mance measures was a contributing factor to doomed business alliances.3

How many of our consortia are diligent about applying critical performancemeasures? Generally the financial outcomes are categorized as the “bestdeal possible” or renewals capped no higher than a specific percentage.The problem then becomes two-fold—some publishers refuse to play ball,thereby forcing us into a take-it-or-leave-it situation (for which the packagesare always those considered most essential and least able to be abandoned)or we end up with reasonable publishers who curtailed price increases formultiple years no longer able to avoid an increase beyond the cap set bythe group.

The most satisfying outcomes are when consortia are able to force apublisher to mitigate its pricing increase and while this has occurred it isnot as frequent as wanted. Two renewal examples are illustrative of thechallenges involved in working in an alliance. Just as the 2008 economicdownturn was settling in a large publisher proposed a double digit priceincrease for 2009 renewals. With full backing by all member libraries theconsortium strenuously pushed back and eventually was successful in nego-tiating a renewal for 5 percent with subsequent year renewals at 3 percent.Although working collaboratively ultimately led to a significant cost saving,a tentative deal was not achieved until after the original agreement had

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expired. All member libraries were poised to respond if access was turnedoff and considerable time and energy was invested in compiling title-by-title selections in anticipation of the Big Deal dissolving. Bluffing is rarelysuccessful, regardless of whether done by an individual library or a collectiveof libraries. If the cancellation threat is serious each library needs to under-stand the consequences; the work load repercussions have to be recognizedand plans must be activated to manage with a different subscription base.In the second example, the consortium involved anticipated acceptance ofa tentative deal and it was only dissatisfaction with the offer by a numberof member libraries that forced all parties back to the negotiation table. Inthis case the reworked deal led to additional savings, albeit more modestthan desired, but the conclusion was not reached until days before the sub-scription was set to expire. In both these examples libraries have to face theunpleasant prospect of having insufficient lead time to communicate withusers and to put in place alternative arrangements should the group negoti-ations not meet institutional requirements. To be effective libraries have tobe able to back demands with a willingness to “walk away” which meansgiving up subscriptions. Ironically there needs to be a track record of failednegotiations with many cancellations for publishers to believe that librariescan and will live without their serials. This is counter to the whole pur-pose of investing time and energy into a strategic alliance that results in asuccessful contract.

In a small number of situations, largely due to historical anomalies, itis still possible to find examples where less will be paid for serials outsideof a consortium deal. A case in point is my library, which continues to payElsevier directly on an annual basis for the inappropriately titled FreedomCollection. My library does not have a pricing cap on these renewals, as doesthe consortium, and each year my library pays a higher renewal percentagefor the same content as is offered through the consortium at a slightly lowerpercentage point. Nonetheless it will be several more years before it willbecome less expensive for my library to subscribe through the consortium,assuming no consortium overhead costs would need to be taken into con-sideration, which is not the case. Folding into the consortium deal requiresthat the terms and conditions of the deal be applied in the same fashion toall member libraries and when applied to my library the collective benefitsdo not extend to my institution.

Anomalies such as this one are problematic for publishers. Withgrowing resistance to signing confidentiality clauses, libraries are activelycomparing what is paid for expensive publisher suites of titles. It is less timeconsuming and difficult for publishers to standardize their pricing and pre-vent further anomalies from arising. The trend toward a fixed consortiumprice begs the question as to why go through a consortium for the deal.Why not align on paper for a group deal then run the invoicing and rollout through a serial vendor? Serial vendors exist to serve libraries with the

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acquisition of serials and they provide a cost effective alternative with valueadded services. Since I was not opposed to acquiring the 15 titles mentionedearlier I directed the order for them through my institution’s serial vendordespite the fact that the invoice amount was a bit higher. Although it isneither possible nor economically valid to sell and buy all serials through aconsortium, there is no reason that consortia could not partner with serialvendors to tap into their service expertise. A rationalization of consortiumoverhead costs against serial vendor service charges, if applicable, mightlead to savings if both parties worked together. In addition, it would bepossible to amalgamate our one-off serial purchases with our bulk orders.

Convincing colleagues to truly investigate the full value and costs ofdifferent ways of acquiring our serials products has been a hard sell. Thereis puzzlement, occasional hostility, some generic lack of trust in variouspotential partners, and considerable apathy for understanding the busi-ness side of acquiring serials and challenging the status quo. Anomaliesare considered to be one-off exceptions rather than examples of alternativethinking on how to leverage change and consider new business practices. Ihave encountered little appetite to explore alternatives to group negotiating.Disadvantages that evolve from this process are studiously ignored and salesrepresentatives are stopped at the door with a “take your sales pitch to myconsortium” response.

Library consortia do achieve benefits and cost savings for their membersso they are our friends. We are partners in group buying so we must takeresponsibility for the problems and challenges that arise in these alliances.I have come to the conclusion that when it comes to serials, librarians onlytrust each other and we take a lot for granted with our standard practices.I believe there needs to be additional assessment of the ongoing costs ofconsortia and more critical attention paid to some of the negative aspectsof aligning for group acquisition of content. Exploration of options withconsideration given to working in tandem with existing and possibly newpartners in different ways could lead to different partnerships. At worse, wewill have a better understanding of the business model that accounts for avery large proportion of our serial expenditures. If our friends are killing usit is because we allow it. Perhaps a counterintuitive emphasis on self-interestrather than collective benefits would provide the start to an ongoing discus-sion of what can best carry us forward for acquiring serials in the future.

REFERENCES

1. Wittmann, C. Michael, “Strategic Alliances: What can We Learn When They Fail?”Journal of Business-to-Business Marketing 14, no. 3 (2007): 3.

2. Evan, G. Edward, “Management Issues of Consortia. Part 2,” LibraryManagement 23, nos. 6–7 (2002): 276.

3. Wittmann, “Strategic Alliances,” 3.

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