Searching for the right ebook business models

For a long time the adoption of ebooks by libraries lagged behind the adoption of ejournals, but a seismic change came with the Covid-19 pandemic. As Jack Macdonald, Director of Library Sales at Cambridge University Press explained, it accelerated many of the trends that were already there, as librarians tried to ensure all the assigned readings and textbooks were available electronically: “That's not a new trend, but because of the pandemic, everything flipped to remote, more or less overnight, and that just made that a bigger issue.”

This switch to ebooks has also been accompanied by a lot of changes in the market, as Macdonald also noted: “The other trend in the past couple of years is the amount of experimentation and a lot of momentum behind trying to find business models for open access monographs in particular."

Some of these changes have not always been welcomed by the library community, especially when it has resulted in higher book prices, and in September 2020 a group of academic librarians and researchers wrote an open letter to the UK government asking them to investigate ebook pricing and licensing practices in the scholarly publishing sector.

As Ben Ashcroft, Vice President (Commercial) at De Gruyter explained: “Book budgets, whether print or electronic, are under pressure for the majority of institutions because of the need to continue to the finance increasing subscription costs for journals. Everything we talk about, in terms of ebook development has to be seen through that lens as well. It has an important influence on the models that are chosen and acquisition policies."

The challenge for publishers is to find those models that are acceptable to everyone, providing seamless access to the users at a cost the institutions can afford and that reflects the value of the work in a sustainable manner.

Complexity

Finding a solution to this challenge has led to an increasingly complex ebook ecosystem, as anyone with experience of the ebook market will readily attest. It is a marketplace which can be increasingly difficult to navigate and with a wide range of models and accompanying metrics. For Ashcroft there are a number of trends adding to this complexity: “The fact that you can so easily track usage and demand for ebooks, and also budgetary pressures, has meant there's been a shift towards Demand Driven Acquisition, Evidence Based Acquisition and all those other usage driven models as well. There's been a huge proliferation in the number of platforms as well, both third-party offers by aggregators, traditional large resellers, and publishers who develop their own platforms and ebook offerings. It means that managing the whole business of acquisition, and cataloguing and all the other processes and libraries has become much, much more complex.”

“Librarians try to navigate the different offers and the different models and the different pricing, and then educate users about where they can access content. The complexity of the whole landscape has become really, really quite mind boggling. We're probably not doing ourselves a favour as an industry by making it so complex for users to navigate, because ultimately your researcher or student just wants to get quickly to the information they need to use and then move on and do their jobs.”

Continuing innovation

As Macdonald explained, while models like evidence based acquisition and front-list ordering were quite unusual ten years ago, they are now prevalent, with new models and schemes being explored all the time, particularly in the area of open access. One example of this is CUP’s Flip It Open, which aims to fund open access publication through typical purchasing habits. Once a certain revenue threshold has been reached, the book becomes available as open access and as an affordable paperback.

As Macdonald pointed out, however, innovative models are not just about open access: “Open access is an interesting market trend, and is driving a lot of activity, but something with even bigger implications is textbooks. If you ask libraries, what's the biggest pain point for them? Is it open access ebooks or textbooks? I'm sure that nine out of 10 would say textbooks. That’s not to diminish the kind of exciting possibilities of open access monographs, but textbooks is probably a more immediate market issue.”

“We launched a successful true library model for e-textbooks in 2020,  called  the Cambridge Higher Education website. It's not based on one-to-one pricing for students, it's based on flat fees for the institution with unlimited access. What's really exciting about that is that we sell quite often in collections, so an institution will have access to a collection of textbooks, which means that as new books are published, as new editions are published, institutions have access to those as they come. It’s an example of where it's moving away from a print mindset on ebooks, and getting a real benefit from having an ebook.”

As new models appear others will inevitably disappear in the creative destruction of the market place, and as parts of the market reach saturation point. As Ashcroft noted: “The market at some point will reach saturation point for the big sort of backlist or archive deal, and we will see usage based models come more under pressure. Short term loans and Demand Driven Acquisition are probably not going to be around long term because they don't represent viable sustainable models for publishers. Evidence Based Acquisition is probably something that is going to be around more long term, but with changes to ensure that the content that is made available, effectively for free, is limited in some way.”

Recognising value

As well as finding models that provide access, it is also important that they should reflect the value of the work. While Demand Driven Acquisition and short term loans have enabled a lot of access to content with no upfront fees, for Ashcroft they risk creating the wrong expectations about the content: “The models can lead to us eroding the value of the content, and that's a very slippery slope; we're creating a problem for ourselves in the future. It's obviously potentially good for authors, publishers and users to have content more easily discoverable out there, and those models do provide that, but they do raise the issue of how to ensure that content is remunerated equitably and that publishers books programmes in the end are actually sustainable.

"If you put lots of content out there for free and are not actually earning money with it, particularly for monographs and low usage titles, that can become a real issue. We and other publishers are looking at how we participate in those models, what sort of pricing we should be expecting for that, whether we restrict content out of usage based models, in order just to make sure that the whole ecosystem remains financially sustainable for us. Evidence Based Acquisition, for example, does have a role to play in the market longer term. It is an exciting way of making backlist titles available to libraries that are at a sustainable cost, and ensuring that they have a sustainable way of purchasing them, but, we are having to look at ways of doing this for the front list that are more financially sustainable.”

More than a ‘book’

Part of the problem is that ebook models have been tied to the traditional concept of the book for too long, which has failed to recognize the potential added value of both ebooks and textbooks. As Ashcroft put it: “We’ve always had a policy of pricing our ebooks for institutional use at the same price as our print books. So, a PDF licence to an institution for use by everybody with no limits to usage or downloads, simultaneous usage, has always cost the same as a print book. We asked ourselves whether that was actually the right approach and came to the conclusion that an electronic format made available in that way does actually deliver an additional value versus the print book, so for our own books we have decoupled the ebook prices from the print prices and ebook prices for institutions have increased as a result, just to reflect the additional value that they represent to an institution.”

Macdonald also emphasised the difference between the book and the ebook, particularly where the textbooks are concerned. Once we start to separate the two, then there is greater scope for innovation: “I don't think the market hasfully moved on from a print mindset when it comes to ebooks. The market has embraced ebooks without doubt, but there's too much of it that clings on to the world of print. You still see quite a lot of ebooks for libraries sold on limited concurrency, where you're trying to recreate the print world. Pricing is still based on print in most cases, and that's still based on a time when publishers’ main source of business was print and ebooks were an extra add on. But that's really flipped around now. It's not really suitable, and it completely undervalues the ebook. Eventually ebook pricing in the market will diverge from print. It's a matter of time, it will get there, but that divergence will have to happen.”

“For example, one way of seeing the print mindset carry over into ebooks is edition cycling. A library might have access to the fourth edition of a textbook but no access to the fifth edition of textbook. What a divergence from the print world means is that the institution should have access to a dynamic resource that keeps getting updated. We've got a successful textbook programme, but we are launching a courseware programme as well, which will have that kind of dynamic, adaptive electronic resource element to it.”

Conclusion

Despite the growth in interest in ebooks in recent years there is still a lot of work to be done if ebook models are to be found that are acceptable to everyone.

The size of the gap can be seen in the language we use. Whereas distinguishing between journals and ejournals now seems a relic of a bygone age, for books and ebooks it still seems a necessary distinction. But maybe that’s not such a bad thing; books and ebooks may be fundamentally different and recognising that difference is an important part of enabling innovations to flourish.

The good news is that as publishers keep trying new innovations, and libraries increasingly prioritise their electronic holdings, eventually sustainable and equitable models will emerge that everyone can live with.