Tiered Pricing Models: the Effect on Library Budgets

John McDonaldAcquisitions LibrarianCharleston Conference

November 5, 2003

Where are We Coming From

Pricing for print journals was the same for every subscriber, resulting in…

Some libraries could afford many journals and built great collections, but others could afford selected journals and built average collections. Collection decisions were based on the (perceived) relative worth of the journal to the institution.

Where are We Going?Ejournals Pricing (c. 1998)

Free with print subscriptions

Surcharge for online access

Package deals

Ejournal Pricing (c.2003)

Over a dozen new models in place . . .

Tiered Pricing Models1. Free with print with reasonable inflation

2. Free with print with unreasonable inflation

3. Surcharge for online at a reasonable rate4. Surcharge for online at an unreasonable rate

5. Package deal for an institution’s print holdings

6. Package deal for everything in the publisher’s portfolio7. Surcharge based on Carnegie Classifications

8. Surcharge based on Institutional FTE9. Surcharge based on FTE of specific groups

10. Usage based pricing, based on actual, Recorded Use11. Usage based pricing, based on relative Use Levels12. Citation based pricing

13. Simultaneous users or Sliding Content Based

Issues with Tiered ModelsFairness of models

Library budgets, publisher revenue, ability to pay, ability to continue to pay

Equity of models All libraries and users being treated the same? If not, is that alright with them?Inflation rates Why must they be as high as 12 to 20% per year?Usage rates

We don’t yet understand usage or how to collect, compile, and disseminate it. Or who reports it. Yet.

The real problem…

All libraries have to face a variety of pricing models, which in aggregate, ALWAYS favor the pricing that benefits the publisher. The models are often imposed by the publisher, are non-negotiable, and are based on good faith statements by the seller.

The real affect on the budget…Testing the theory

15 of Caltech’s largest publishersCompiled

Ejournal Use (publisher reported)Citations (from ISI citation indexes)Impact Factor (from JCR)FTE (institute & user group)Inflation rates (5 year average)Print prices Pricing Model

Results…Model 1: Free with Print, reasonable inflation rate (6%)

Publisher

1. Free with Print (6% inflation)

Actual Price 2003

Difference

American Chemical Society $42,695.55 $46,320.64 -8%American Institute of Physics $53,235.27 $55,244.15 -4%Annual Reviews $5,270.92 $5,469.83 -4%Cambridge University Press $14,019.95 $14,549.01 -4%Cell Press $7,627.36 $12,592.34 -39%Elsevier $113,572.93 $133,930.34 -15%JSTOR $15,900.00 $15,000.00 6%Kluwer $91,615.79 $99,394.49 -8%Nature Publishing $24,811.12 $40,961.76 -39%Oxford University Press $11,347.93 $11,347.93 0%PNAS $3,869.00 $4,000.00 -3%Royal Society of Chemistry $17,765.60 $18,436.00 -4%Science $4,028.00 $3,682.00 9%Springer $116,600.00 $121,000.00 -4%Wiley $167,439.06 $176,916.75 -5%TOTALS $689,798.48 $758,845.22 -9%

Results…Model 2: Free with Print, unreasonable inflation rate (12%)

Publisher

2. Free with Print (12% inflation)

Actual Price 2003

Difference

American Chemical Society $45,112.28 $46,320.64 -3%American Institute of Physics $56,248.58 $55,244.15 2%Annual Reviews $5,569.28 $5,469.83 2%Cambridge University Press $14,813.53 $14,549.01 2%Cell Press $8,059.09 $12,592.34 -36%Elsevier $120,001.58 $133,930.34 -10%JSTOR $16,800.00 $15,000.00 12%Kluwer $96,801.59 $99,394.49 -3%Nature Publishing $26,215.53 $40,961.76 -36%Oxford University Press $11,990.26 $11,347.93 6%PNAS $4,088.00 $4,000.00 2%Royal Society of Chemistry $18,771.20 $18,436.00 2%Science $4,256.00 $3,682.00 16%Springer $123,200.00 $121,000.00 2%Wiley $176,916.75 $176,916.75 0%TOTALS $728,843.67 $758,845.22 -4%

Results…Model 3: Surcharge for Online (10% of print subs)

Publisher

3. Surcharge for Online

(10%)

Actual Price 2003

Difference

American Chemical Society $44,306.70 $46,320.64 -4%American Institute of Physics $55,244.15 $55,244.15 0%Annual Reviews $5,469.83 $5,469.83 0%Cambridge University Press $14,549.01 $14,549.01 0%Cell Press $7,915.18 $12,592.34 -37%Elsevier $117,858.70 $133,930.34 -12%JSTOR $16,500.00 $15,000.00 10%Kluwer $95,072.99 $99,394.49 -4%Nature Publishing $25,747.39 $40,961.76 -37%Oxford University Press $11,776.15 $11,347.93 4%PNAS $4,015.00 $4,000.00 0%Royal Society of Chemistry $18,436.00 $18,436.00 0%Science $4,180.00 $3,682.00 14%Springer $121,000.00 $121,000.00 0%Wiley $173,757.52 $176,916.75 -2%TOTALS $715,828.61 $758,845.22 -6%

Results…Model 4: Surcharge for Online (25% of print holdings)

Publisher

4. Surcharge for Online

(25%)

Actual Price 2003

Difference

American Chemical Society $50,348.53 $46,320.64 9%American Institute of Physics $62,777.44 $55,244.15 14%Annual Reviews $6,215.71 $5,469.83 14%Cambridge University Press $16,532.96 $14,549.01 14%Cell Press $8,994.53 $12,592.34 -29%Elsevier $133,930.34 $133,930.34 0%JSTOR $18,750.00 $15,000.00 25%Kluwer $108,037.49 $99,394.49 9%Nature Publishing $29,258.40 $40,961.76 -29%Oxford University Press $13,381.99 $11,347.93 18%PNAS $4,562.50 $4,000.00 14%Royal Society of Chemistry $20,950.00 $18,436.00 14%Science $4,750.00 $3,682.00 29%Springer $137,500.00 $121,000.00 14%Wiley $197,451.73 $176,916.75 12%TOTALS $813,441.60 $758,845.22 7%

Results…Model 5: Online purchase separate (75-100% of print)

Publisher

5. Online Purchase

Separate (75%-100% of print)

Actual Price 2003

Difference

American Chemical Society $70,487.94 $46,320.64 52%American Institute of Physics $87,888.41 $55,244.15 59%Annual Reviews $8,702.00 $5,469.83 59%Cambridge University Press $23,146.15 $14,549.01 59%Cell Press $12,592.34 $12,592.34 0%Elsevier $187,502.47 $133,930.34 40%JSTOR $26,250.00 $15,000.00 75%Kluwer $151,252.48 $99,394.49 52%Nature Publishing $40,961.76 $40,961.76 0%Oxford University Press $18,734.78 $11,347.93 65%PNAS $6,387.50 $4,000.00 60%Royal Society of Chemistry $29,330.00 $18,436.00 59%Science $6,650.00 $3,682.00 81%Springer $192,500.00 $121,000.00 59%Wiley $276,432.42 $176,916.75 56%TOTALS $1,138,818.24 $758,845.22 50%

Results…Model 6: Package Deal for Holdings (15% of print subs)

Publisher

6. Package Deal for Holdings

(15%)

Actual Price 2003

Difference

American Chemical Society $46,320.64 $46,320.64 0%American Institute of Physics $57,755.24 $55,244.15 5%Annual Reviews $5,718.46 $5,469.83 5%Cambridge University Press $15,210.33 $14,549.01 5%Cell Press $8,274.96 $12,592.34 -34%Elsevier $123,215.91 $133,930.34 -8%JSTOR $17,250.00 $15,000.00 15%Kluwer $99,394.49 $99,394.49 0%Nature Publishing $26,917.73 $40,961.76 -34%Oxford University Press $12,311.43 $11,347.93 8%PNAS $4,197.50 $4,000.00 5%Royal Society of Chemistry $19,274.00 $18,436.00 5%Science $4,370.00 $3,682.00 19%Springer $126,500.00 $121,000.00 5%Wiley $181,655.59 $176,916.75 3%TOTALS $748,366.27 $758,845.22 -1%

Results…Model 7: Package Deal for All Publisher’s Portfolio (10%)

Publisher

7. Package Deal for

Everything (10%)

Actual Price 2003

Difference

American Chemical Society $44,306.70 $46,320.64 -4%American Institute of Physics $55,244.15 $55,244.15 0%Annual Reviews $5,469.83 $5,469.83 0%Cambridge University Press $14,549.01 $14,549.01 0%Cell Press $7,915.18 $12,592.34 -37%Elsevier $117,858.70 $133,930.34 -12%JSTOR $16,500.00 $15,000.00 10%Kluwer $95,072.99 $99,394.49 -4%Nature Publishing $25,747.39 $40,961.76 -37%Oxford University Press $11,776.15 $11,347.93 4%PNAS $4,015.00 $4,000.00 0%Royal Society of Chemistry $18,436.00 $18,436.00 0%Science $4,180.00 $3,682.00 14%Springer $121,000.00 $121,000.00 0%Wiley $173,757.52 $176,916.75 -2%TOTALS $715,828.61 $758,845.22 -6%

Results…Model 8: Carnegie Classification ($400 per IF point)

Publisher

8. Carnegie Classification ($400 per journal impact

factor point)

Actual Price 2003

Difference

American Chemical Society $49,200.00 $46,320.64 6%American Institute of Physics $30,400.00 $55,244.15 -45%Annual Reviews $129,200.00 $5,469.83 2262%Cambridge University Press $19,200.00 $14,549.01 32%Cell Press $40,800.00 $12,592.34 224%Elsevier $155,200.00 $133,930.34 16%JSTOR $28,000.00 $15,000.00 87%Kluwer $27,200.00 $99,394.49 -73%Nature Publishing $119,200.00 $40,961.76 191%Oxford University Press $21,600.00 $11,347.93 90%PNAS $4,400.00 $4,000.00 10%Royal Society of Chemistry $14,800.00 $18,436.00 -20%Science $10,800.00 $3,682.00 193%Springer $146,000.00 $121,000.00 21%Wiley $44,000.00 $176,916.75 -75%TOTALS $840,000.00 $758,845.22 11%

Results…Model 9: Institutional FTE ($2.50 per FTE)

Publisher

9. Institutional FTE ($2.50 per FTE)

Actual Price 2003

Difference

American Chemical Society $6,250.00 $46,320.64 -87%American Institute of Physics $6,250.00 $55,244.15 -89%Annual Reviews $6,250.00 $5,469.83 14%Cambridge University Press $6,250.00 $14,549.01 -57%Cell Press $6,250.00 $12,592.34 -50%Elsevier $6,250.00 $133,930.34 -95%JSTOR $6,250.00 $15,000.00 -58%Kluwer $6,250.00 $99,394.49 -94%Nature Publishing $6,250.00 $40,961.76 -85%Oxford University Press $6,250.00 $11,347.93 -45%PNAS $6,250.00 $4,000.00 56%Royal Society of Chemistry $6,250.00 $18,436.00 -66%Science $6,250.00 $3,682.00 70%Springer $6,250.00 $121,000.00 -95%Wiley $6,250.00 $176,916.75 -96%TOTALS $93,750.00 $758,845.22 -88%

Results…Model 10: Specific User Group FTE ($2.50 per FTE)

Publisher

10. Specific User Group FTE ($2.50 per FTE)

Actual Price 2003

Difference

American Chemical Society $2,500.00 $46,320.64 -95%American Institute of Physics $3,750.00 $55,244.15 -93%Annual Reviews $6,250.00 $5,469.83 14%Cambridge University Press $2,500.00 $14,549.01 -83%Cell Press $2,500.00 $12,592.34 -80%Elsevier $6,250.00 $133,930.34 -95%JSTOR $6,250.00 $15,000.00 -58%Kluwer $6,250.00 $99,394.49 -94%Nature Publishing $2,500.00 $40,961.76 -94%Oxford University Press $3,750.00 $11,347.93 -67%PNAS $3,750.00 $4,000.00 -6%Royal Society of Chemistry $2,500.00 $18,436.00 -86%Science $5,000.00 $3,682.00 36%Springer $6,250.00 $121,000.00 -95%Wiley $6,250.00 $176,916.75 -96%TOTALS $66,250.00 $758,845.22 -91%

Results…Model 11: Usage Based Pricing ($0.20 per fulltext)

Publisher

11. Usage Based

($0.20 per fulltext)

Actual Price 2003

Difference

American Chemical Society $143,377.20 $46,320.64 210%American Institute of Physics $27,934.80 $55,244.15 -49%Annual Reviews $9,226.80 $5,469.83 69%Cambridge University Press $2,353.20 $14,549.01 -84%Cell Press $30,654.00 $12,592.34 143%Elsevier $27,271.20 $133,930.34 -80%JSTOR $9,910.80 $15,000.00 -34%Kluwer $2,722.80 $99,394.49 -97%Nature Publishing $88,226.40 $40,961.76 115%Oxford University Press $6,848.40 $11,347.93 -40%PNAS $31,978.80 $4,000.00 699%Royal Society of Chemistry $6,159.60 $18,436.00 -67%Science $63,613.20 $3,682.00 1628%Springer $8,821.20 $121,000.00 -93%Wiley $10,510.80 $176,916.75 -94%TOTALS $469,609.20 $758,845.22 -38%

Results…Model 12: Citation Based ($20 per citation [CLS Avg])

Publisher

12. Citation Based ($20

per citation)

Actual Price 2003

Difference

American Chemical Society $64,180.00 $46,320.64 39%American Institute of Physics $35,980.00 $55,244.15 -35%Annual Reviews $12,940.00 $5,469.83 137%Cambridge University Press $6,700.00 $14,549.01 -54%Cell Press $20,900.00 $12,592.34 66%Elsevier $71,240.00 $133,930.34 -47%JSTOR $24,760.00 $15,000.00 65%Kluwer $11,520.00 $99,394.49 -88%Nature Publishing $50,820.00 $40,961.76 24%Oxford University Press $3,860.00 $11,347.93 -66%PNAS $18,940.00 $4,000.00 374%Royal Society of Chemistry $2,140.00 $18,436.00 -88%Science $39,840.00 $3,682.00 982%Springer $81,420.00 $121,000.00 -33%Wiley $21,500.00 $176,916.75 -88%TOTALS $466,740.00 $758,845.22 -38%

ConclusionsThe Fate of Library Collection Budgets….

Publisher Library's Best Model

Usage Based Actual Model Publisher's Best Model

American Chemical Society $42,695.55 $23,896.20 $46,320.64 $143,377.20American Institute of Physics $27,934.80 $4,655.80 $55,244.15 $87,888.41Annual Reviews $5,270.92 $1,537.80 $5,469.83 $129,200.00Cambridge University Press $2,353.20 $392.20 $14,549.01 $23,146.15Cell Press $7,627.36 $5,109.00 $12,592.34 $30,654.00Elsevier $27,271.20 $4,545.20 $133,930.34 $187,502.47JSTOR $9,910.80 $1,651.80 $28,000.00 $28,000.00Kluwer $2,722.80 $453.80 $99,394.49 $151,252.48Nature Publishing $24,811.12 $14,704.40 $40,961.76 $88,226.40Oxford University Press $3,860.00 $1,141.40 $11,347.93 $3,860.00PNAS $3,869.00 $5,329.80 $4,400.00 $31,978.80Royal Society of Chemistry $2,140.00 $1,026.60 $18,436.00 $29,330.00Science $4,028.00 $10,602.20 $4,028.00 $63,613.20Springer $8,821.20 $1,470.20 $121,000.00 $192,500.00Wiley $10,510.80 $1,751.80 $176,916.75 $276,432.42

TOTALS $141,131.20 $54,372.00 $726,270.57 $1,323,584.33