An Update to
"Allocation of Costs for Electronic Products
in Academic Library Consortia"
"Allocation of Costs for Electronic Products in Academic Library Consortia," College and Research Libraries 67, no. 2 (Mar. 2006): 123-135.
Since my article appeared in 2006, I have been intending to update it. An email inquiry today (11 January 2010) prompted me to put some of these thoughts into writing. This is provided here in the hope that some might find it useful.
First, a bit of background. After submitting that article for publication and prior to its appearance, I changed institutions to my present one. Marietta College is a member of OhioLink and this gave me some exposure to different ideas on how consortia might divide costs among members. So I began thinking of writing an addendum to my article. Unfortunately my responsibilities at the new institution included taking the lead in planning and overseeing the construction of a new library facility, so I started but never finished the update article.
The original article describes several ways that academic library consortia apportion the costs for group purchases among their memberships. Two additional methods are described below.
The 'NPR' Method
The name comes from the method of funding public radio in the United States (NPR = National Public Radio). The basic idea is that individuals (or in library consortia, individual libraries) contribute an amount of their own choosing that reflects the value of the service to them, but everyone gets access to the service, even if they don't pay anything.
In a library consortium, it works this way. The consortium approaches a publisher/vendor to establish what the cost would be to offer a product to the entire consortium. The consortium then polls its member libraries to determine what they individually would be willing to pay for that product. Usually the consortium would provide some guidance on what a reasonable bid might look like. For example it might hypothesize about a small but likely group of participants and project costs for different sizes of institutions using one of the cost allocation methods I already wrote about. If the initial bids are short of the needed amount, but are promising nonetheless, there might be a few rounds of solicitation to raise the bids to the needed amount.
So, if the members of the consortium that care most about that product are able to contribute enough to purchase it for the entire consortium, then the NPR deal is made and the individual libraries are billed at the level of financial commitment that they agreed to. They might be billed for less if there was an overcommitment of funds during the bidding process. If the deal isn't consummated, then it likely evolves into one in which a subset of the consortium purchases the product for only themselves. In OhioLink parlance, this is a "pay-to-play" deal.
Recent discussions among OhioLink participants have raised the question of how long the NPR commitment should last. Usage reports can clearly show which institutions are free-loading on the generosity of others. Consensus seems to be developing that on some periodic basis, NPR deals should be rebid. This would put the continuation of the title at risk if sufficient funds weren't secured, so there would be some incentive to start contributing if your institution is dependent on the resource and you are not already supporting its purchase.
In my 2006 article I mentioned an allocation method used by NAAL called the "bid method." In some cases, I'm aware that NAAL established deals not unlike this, but they weren't prevalent. And NAAL was pretty explicit that any deal that started this way would be evolved fairly quickly into one in which costs were allocated based on usage.
A Method Based on Previously Established Purchasing Patterns
In large and diverse consortia, it can be difficult to figure out how to get a deal started, that is to determine which institutions should be paying for a particular product and what their fair share should be. This is particularly true for products that don't appeal broadly to every institution in the consortium. Should institutions that have no need for a product be expected to pay for it? But it's in the consortium's interest to extend as many of its products to all members as possible in order to offer a consistent appearance to all users, who may begin work at one institution and then move to another during their careers as students or faculty.
OhioLink has in recent years been trying to establish larger deals with publishers for their electronic offerings, such as the entire catalog of E-journals or E-books from that publisher. These deals are effectively migrations from print to electronic products from the point of view of both the publishers and the libraries.
It is helpful to look at such deals by concentrating on the impacts that they might have on the revenue of the publishers and on the expenditure patterns of the libraries. By analyzing the aggregate print holdings of the consortium members of titles from that publisher, the consortium can establish what any individual library ought to be willing to pay for replacing those print titles with electronic titles, based on its historic purchasing practice. Similarly, the publisher can understand what income it is currently depending on from this specific group of libraries.
The advantage for an individual library is that it is able to see how it can afford the deal by reallocating existing funding from a print resources budget to an electronic resources budget, since few libraries have money for additional resources nowadays. The advantage for the publisher is that it is able to maintain its revenue stream reasonably well, and perhaps reduce its production costs by eliminating printing.
The consortium may also be able to show that certain of its libraries have historically acquired nothing from that publisher. So it's not reasonable for the consortium to expect such a library to contribute toward the cost of that product. This also brings a dose of reality to the publisher when the consortium can point out that the publisher has over some time received no revenue from a particular group of institutions and that the deal under consideration is not likely to change that substantially.
Needless to say, the ability of the consortium to pursue such a deal depends on its ability (or that of the publisher, but they seem notoriously unprepared to do so) to produce a comprehensive purchasing history of its members for that publisher's products and it is certainly facilitated by a union catalog for the consortium.
Like the NPR method described above, this method will also tend to "fix" the pricing for the institution at a certain point in time. Individual institutional priorities may change and in the past the institution might cut or add subscriptions as a result. But under this funding scheme, they now find themselves obligated to continue paying at the rate that they were at some point in the past. OhioLink is new enough to this kind of deal making that it hasn't yet wrestled with this issue seriously.