As I received the deadline reminder for this quarter’s ATG column, I was finishing an email exchange with our marketing and business directors that had begun with celebration over a healthy payment from one of our electronic content vendors and had concluded with something to the effect of: “What’s the sales model for that vendor? Will those checks be getting smaller as the number of new customers diminishes after the initial launch period?” This exchange reminded me that some/much of the time, I couldn’t rattle off the exact terms and offerings of our numerous e-vendors. In-house conversations often go something like: “Ebrary, wait, did they add the STL model that becomes a full purchase after four lends, or am I thinking of EBL?” It might be comical if it also didn’t also seem kind of scary. (In an interesting twist, after I began this article, I learned that ProQuest had just acquired EBL, as it earlier had Ebrary. Mergers and acquisitions may be the ultimate solution to this issue!)
In this burgeoning era of digital content (where talk is rife
with acronyms such as PDA, DDA, MUPO, SUPO, STL and the like), I sometimes hear
librarians say that there are so many options and models out there that it’s
all highly confusing and difficult to determine which vendors and what types of
plans will best suit the needs of their library and patrons. To this I say,
believe me, I hear you. Or to quote the lyrics to “Ball of Confusion” (pick
your favorite version of the song, but they’re all surprisingly applicable to
today for something written in 1970): “So round ‘n’ round ‘n’ round we go /
Where the world's headed, nobody knows.”
I
tend to believe that this profusion of offerings and models is a natural result
of the “offer the customer a lot of options, a choice to suit every customer
profile” mentality. Perhaps we are like the consumer standing in the
cereal aisle at Whole Foods, trying to determine which of the 18 available
organic cereals is the right one for us. “Which is more important to me, high
protein or fiber? I like that this one has flaxseed, but wait, Jimmy is
allergic to strawberries. This one looks good and I like this brand, but can I
really justify spending $6.50 on a box of cereal?” Sure, this takes longer and
requires more consideration than did simply grabbing the box of All-Bran in
days past, but there are upsides as well. There are many tantalizing flavors
(user models) to choose from. We have the option to preference either protein
(collection/subject based building) or fiber (PDA). We are increasingly
romanced by the benefits of flaxseed (STL) but refuse to knowingly cause
allergic reactions in our family members (too-quick browsing purchase triggers
in PDA plans). Finally, we are lucky to have that $6.50 at all, not to mention
that we also have the choice to spend it in the way that best benefits our
family (library and patrons).
I won’t further belabor this
already-strained cereal metaphor. What this scenario means in practicality,
though, is that we (both as publishers and librarians) are being forced to get
much better at math, forecasting, and multi-criteria decision making. Mark Saunders, of the University of Virginia Press, characterizes the publishers’
challenge in this way: “we have to become masters of the variables involved in
making scholarly content available. Not only are the models increasing, but the
variables reflected in those models are multiplying, too. Just think of the
variables that a lending or demand-driven model adds to your ebook
calculations.”
At many university presses, a
book’s life will begin with a profit & loss estimate, designed to calculate
the costs of editing, typesetting, permissions, printing, and electronic
conversion and distribution/storage, among others. However, these formulas only
work when estimated sales for the book’s various formats are entered into the
spreadsheet. And there’s the rub. Sales forecasting pre-recession was a tricky
and largely imperfect art, so after the crash of 2008 and the advent of
ebooks—which in turn led to our current splintering of sales and income models,
rent vs. own, subscription vs. perpetual access, etc.—putting realistic numbers
into that spreadsheet in 2013 can seem alternately like an exercise in futility
or eerily remind one of advice typically given by SAT test preparation coaches:
“Think about the information you do know, and then carefully make your very
best guess about the answer to this question.”
This exercise in sales forecasting
is far more than a theoretical concern. Certainly, a press needs to know how
many of a book it should plan to sell (and plan to print, taking into account
that the print number should be lowered by the amount of projected sales that
will be for electronic rather than print copies) to determine if the book is a
financially viable project. Increasingly, though, as presses’ budgets are being
examined, a publisher also needs to know what their cash flow will look like in
a given year. Traditionally, patterns of library buying and the prevalence of
approval plans gave forecasters a rough idea of an ideal print run, since the
bulk of library sales occurred in the first two years of a book’s life. In the
same way libraries, too, could budget for what they projected to spend on
monographs and subscriptions. But the many new sales models, particularly for
electronic content and in plans involving PDA or STL, money is earned (or in
the case of the libraries, spent) according to use. Use may be the new
metric that will ultimately determine cost, but that cost, according to
Saunders, “needs to be metered in a way that doesn’t bankrupt libraries or
publishers.” How do presses guess at—let alone budget for— the actual use of
their books, taking into account the fact that the income earned by a
particular title may now trickle in over a series of many years rather than
primarily at the beginning of its life? Similarly, how can libraries accurately
predict their own costs in this on-demand approach to content access? See the
previous advice of the test-prep coach.
So there it is. We all make our
best guess. We have to guess at how many books we can sell (short term, long
term, in whole or in part) and price the books and the access plans according
to numbers that we believe will get us to a break-even status (if you’re a
non-profit university press). We make these guesses knowing that we may not
make the numbers and knowing that we’ll be participating in a number of sales
and access models so that we can gather some actual data about what seems to be
working for the vendors, the libraries, and the patrons they serve. We make guesses
knowing that we will be selling fewer copies of our books due to increased
consortial activity, textbook rental programs (both print and electronic), and
campus-wide electronic access to titles that would have previously sold
vigorously as course adoption titles. We make guesses based on the knowledge
that unlike scholarly print books, which carry smaller discounts since they
travel to more specialized markets, ebooks are considered all the same (in
terms of discount) by the vendors. As a result, presses give up significant
revenue on this format, a matter of increasing concern as ebook sales and
licensing to libraries increase and print sales continue to decrease.
This is one explanation for why
there are so many sales models and so many different pricing and access options
out there today. I don’t believe publishers are deliberately trying to add to
the confusion, and indeed we likely suffer from it as much as anyone else in
the chain of scholarly communication. We experiment because we want to give our
customers what they want according to their needs. We also experiment in order
to build a set of data that will help us determine which models work most
successfully and sustainably for us as publishers.
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