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Adapting in line with content consumption

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Sam Bruinsma of Brill, Tommy Doyle of Elsevier, and Chris Bennett of Cambridge University Press discuss the latest trends in ebook publishing. Robert Roe asks the questions

What developments have you seen over the last two years, in terms of the products you are offering and the customers that are buying them? Have ebook budgets grown?

Bruinsma: At Brill we see a steady double-digit growth of our ebook sales over the last couple of years. Annually we publish almost 1,000 new titles. 

Our own offering to academic libraries is centred around more than a dozen subject collections of 20 to 100 titles each. These collections are exclusively sold by Brill and are marketed as one-offs but are also used to fuel our PDA and DDA (pick and choose) models.

We do not have signals that total acquisition budgets for books are growing overall; on the contrary, what we are witnessing with our ebooks is mainly substitution of print sales. We would like to see some extra growth in budgets of course, especially in HSS, but we are content agnostic and have no problem with cannibalising print.

The advantages of ebooks over print books for authors (larger readership), customers (larger readership), and users (discoverability, accessibility, usability) are evident. With ebooks publishers have the advantage of lower unit costs and therefore slightly better margins, which helps to continue their book programme. However, do not underestimate the costs of setting up and maintaining the digital infrastructure necessary to support an ebook programme fully. And the share of the physical production costs in the print price of specialised scholarly books has fallen constantly over the past decade.

Doyle: We see a continued shift from print to electronic and growth of ebooks. The pace and scale of transition varies significantly by region, by customer segment, by content type and use-case. Globally the market still has a long way to go; approximately 70 to 80 per cent of revenues are still driven by print sales, depending on what study you look at and which competitor you see reporting. For Elsevier S&T Books, the majority of our revenue is now from ebooks.

The biggest shift within electronic revenues over the past two years has been the move from back list, one-off, and big deals due to catalogue digitisations to more front-list focused. We see more evidence-based, flexible, and recurring business models. Our recurring and evidenced-based models now represent about one third of electronic revenues and this continues to grow. Ebooks purchasing has become much more strategic in nature and we have seen a large growth in the use of data and analytics by leading librarians. 

For the last five years, we have been using data and analytics from our own tools such as Scopus and SciVal, as well as usage analytics on ScienceDirect to drive our publishing and product decisions. We have found these portfolio planning tools derived from the above are also incredibly useful for librarians with data that is cut and organised at their institution’s level. 

With this information at hand and a wide range of purchasing and access options available, we help librarians build a plan that is predictable, affordable and sustainable over time. It also allows the librarian to hold us, as their solutions provider, accountable and it helps libraries demonstrate the value of the crucial service they provide to their stakeholders.

Bennett: The last two years have seen continued growth in global demand for Cambridge ebooks.  However, this has not been the rapid, almost unconditional expansion experienced over much of the preceding decade, which was from a low base and with relatively little impact on other revenue streams.

Acquisition of ebooks has become steadily more granular, not only to the title level but within it to the consumption of chapters through pay-per-access models. Open educational resources (OERs) are the OA manifestation of this development and, coupled with fully online course provision (whether open or closed), it presents a threat to the traditional sector, and a great opportunity to develop new publishing forms.

In the UK particularly (though the indications are that Australia and the US may follow) the research universities are setting a greater emphasis on teaching and learning than ever before, and tutors must manage the demands this places upon them alongside their publications for tenure, for as long as the current system continues to operate.  

In response, CUP has developed Elements, digital-first works of circa 25,000 words with a 12-week publishing turnaround. These are designed to present expert views on the latest debate in their specific subjects, in more depth than a journal article. Commissioning is well under way, with the Elements service to launch late this year.

Across all formats, seller and buyer behaviours, whether institutional or retail, the most vital attribute of the published product is comprehensive metadata for discovery purposes. Whether through dedicated library discovery services or online retailers, XML-based digital content with thorough and consistent meta-tagging is absolutely essential for effective discovery, cross-search, usage and therefore sale. As a result, CUP supplies metadata to sixteen specialist vendors as well as the regular channels. More than anything else, this influences the success of published material.

How do services like PDA and DDA affect ebook aggregation? Are they competing or complementing strategies? Does that affect your product offering?

Bruinsma: Brill is meeting library demand in offering both PDA and DDA for our e-books. While our collection sales are still growing, PDA and DDA are growing faster though their share is still relatively small. Of course, most aggregators offer similar models so, strictly speaking, we are not competing with these models. Brill is not offering STL (short-term loans) as some vendors do for our e-books, though we have restricted our terms, for instance, by imposing an embargo.

The reason that Brill does not offer STL for books is partly technical and partly policy. Currently, our e-book platform is not able to support that model, though in the future it might. From a publisher’s perspective, the STL model is undermining the sustainability of book programs. 

Taken to the extreme: if all customers would turn to STL for all books, from all publishers, they would pay much, much less in the short term. In the longer term, more loans might come in but could well be too late for most publishers and library suppliers. Besides, by then library book budgets would have been cut back heavily because of their initial savings.

Bennett: The advent of patron- or demand-driven models expanded upon the non-linear lending approach pioneered by EBL (now part of ProQuest), under which a certain number of accesses to a licenced title result in the purchase of further copies. This was a much-needed breakthrough for libraries unable to buy all of a publisher’s front list or substantial collections per year. It also went some way to proving demand for books sold. The significant drawback to the model is that short-term spikes in demand (for instance when a particular course is running) drive purchases that may not be of value to the library in years to come.

The next generation model, which Cambridge offers direct, is evidence-based acquisition (EBA). EBA opens the platform (or selections as the library wishes) to access free at the point of use. Often, an amount to be spent from the library budget is committed beforehand, and over an extended period (typically six months) that the content is used. 

At the end of the term, the library decides which books to spend its allocated budget on, based on usage over the period. This results in a more proven value to the institution than the much more immediate DDA models, though it requires both a wait for revenue recognition and ongoing management by the publisher if done well.

We would welcome a shift in library acquisition ethos (and necessarily, budgeting models) to embrace more subscription access, which is both a lesser initial outlay for the library and more sustainable for both parties than outright purchase. The logical outcome of both the DDA and EBA models is drawing down on published content from online services, by way of subscription. And this could be for mixed content including journals and databases too.  

For this to be effective, the industry needs appropriate standards for archiving and disaster recovery. Experiments with short-term loan (STL) access have been unsuccessful for publishers, but further developments of these models are coming and signpost a cloud-based future.

Do you see ebook budgets continuing to grow over the next few years? Are there any regional differences around the world, in terms of uptake and growth trends?

Bruinsma: I expect that, in academic markets, the current trend will continue with slow but steady growth of ebook budgets at the expense of print books. It also depends on the progress libraries make in developing new acquisition practices in a digital world. Many libraries seem to struggle either to escape rigid print-based practices, or in trying to torture digital acquisition into these age-old procedures.

Doyle: The growth of aggregators has slowed a lot over the last 18 months as librarians increasingly prefer purchase to own content on publisher platforms (‘firm orders’ ebook sales are dropping). However, growth is very strong in demand-driven models like short-term loans, and more so with patron driven (PDA) and demand driven access (DDA) models. Aggregators are very important partners to us; giving libraries more options to access the content they need.

I think DDA/PDA is another example of a good way for libraries to collect data to ensure they can accurately meet the needs of their patrons and, if managed right, save them money.

Bennett: It’s undoubtedly true that third-party resellers of online publishing content fulfil an important function for libraries owing to consolidation, especially in the second-tier institutions that may not have the resource to manage multiple vendor platforms.  

However, it is testimony to both the challenges in the sector and the success of discovery and purchasing systems that ebook distribution itself has consolidated significantly. Acquisitions in the last year leave only two large-scale competitors in the mainstream content aggregation / distribution business, and I expect that the periphery around them will contract yet further.

Ebooks will continue to grow for the medium term but overall book budgets will probably be flat in real terms. Certain institutes in the US are now almost 100 per cent digital, but there are still some patron demands and specific use-case needs for print that they fulfil. There are also many libraries still working out how to build a digital service. Europe is following but there are many examples of 100 per cent digital libraries – especially in northern Europe.