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Michael Cairns
Managing Partner
Information Media Partners
Parallel Universe
Will Libraries and Publishers Learn
to Share?
American Library Conference 2011
2
Introduction
Michael Cairns is a publishing and media executive with over 25 years experience in
business strategy, operations and technology implementation. As a business
executive, Mr. Cairns has successfully managed several troubled and under-
performing businesses, creating new business opportunities, developing new funding
sources and enhancing shareholder value for investors. His years spent as an
operating executive have largely been with brand-name publishing companies such
as Macmillan, Inc., Berlitz International, Wolters Kluwer Health, Reed Elsevier and
R.R. Bowker. As a consultant, Mr. Cairns has worked with clients as diverse as
AARP, Hewlett Packard, InterPublic Companies and Reed Elsevier with an emphasis
on business strategy, market development and corporate development.
His skills and experience include:
 Business and corporate strategy development and implementation
 Operations management and business transformation
 Traditional and digital publishing and operations
 Print-to-digital transformation and adoption of new business models
 Software development and software services
Mr. Cairns holds an MBA (Finance) from Georgetown University and a BA from
Boston University. He has served on several boards and advisory groups including
the Association of American Publishers, Book Industry Study Group and the
International ISBN organization. Additionally, he has public and private company
board experience.
2
Michael Cairns
Information Media Partners
Strategy Consulting
New York, London, Melbourne
Tel: 908 938 4889
Michael.cairns@infomediapartners.com
Find me:
LinkedIn Twitter Blog Flickr InstaGram
3
Information Media Partners
Michael Cairns established Information Media Partners in 2006 as a boutique strategy
consulting firm focused on the information and education publishing segment. The work
conducted by the firm includes product development, corporate development, sales
management and corporate reorganizations. We work with established businesses, private
equity owners and potential acquirers.
Examples of our work include:
 Reorganized and re-focused a $25 million software publishing company by aligning
business operations with client priorities; implementing internal collaboration tools and
project management standards; re-building executive team to focus on effective and
efficient management
 Defined a new business strategy for a large non-profit association and advocacy group,
expanding their business model into global markets to exploit their core knowledge and
expertise across a broader market
 Led an information technology capabilities review at a large international advertising
holding company. Completed over 200 interviews in 15 international offices and multiple
group focus sessions to define the operational ‘gaps’ between existing agency capabilities
and those necessary and important for client delivery by region
 Completed a sales management effectiveness review for a global software company and
defined six key project initiatives to improve sales effectiveness, market development and
account management
We approach our client engagements in a standardized, logical manner which creates the best
environment to identify key business drivers, administrative and logistical road blocks and/or
product or market definition issues. Our investigative approach leads to better insights into
your businesses and supports the development of workable solutions and recommendations
for success.
Visit the Information Media Partners website for more information.
Sample Client List
4
Books are
Books are not a success story
Books are expensive
Books are hard to navigate
Books are of declining importance to scholars
Books are rarely used
Books are a lost opportunity
5
Libraries are
Libraries are essential
Libraries are socialist
Libraries are not made they grow
Libraries are important
Libraries are green
Libraries are a waste of money
Libraries are obsolete
Libraries are dead
Libraries are cool
6
Questions for Books
 Where
 Which
 When
 Why
Michael Cairns - Information Media Partners
7
Relationships are tough
Jill
Ford
Colleen
Publishers
Libraries
Wayne
Goodyear
Jack
8
We Can Work it
Out
We Can Work it
Out
9
Agenda
 Libraries today
 Strategic initiatives
 A way forward for
publishers and
libraries
10
An average spend of $150K?
Estimated Data Points
Public Library: $1,659M
Academic Library: $340M
Number of libraries: 13,000
Library total approximately 5% of total
publishing industry revenue.
11
Improving Quality of Life
25.4 million
Americans
reported using
their public library
more than 20
times in the last
year, up from 20.3
million households
in 2006.
Source: OCLC How Libraries Stack-up
Source: COLUSA Report
12
Assisting patrons
 Online job applications
(67 percent)
 Access to job
databases and other
online resources (88
percent)
 Civil service exam
materials (75 percent);
 Software or other
resources (69 percent)
 Resumes and other
employment materials
Source: OCLC How Libraries Stack-up
Source: COLUSA Report
13
Despite strong ROI
 Reductions seen in
41 state library
budgets during fiscal
2010.
 Of states reporting
decreases in local
funding to public
libraries, the
majority were in the
5-10 percent range.Source: OCLC How Libraries Stack-up
Source: COLUSA Report
14
51 million “by-computer” Patrons
Use of the public
library by computer
(from home, work or
school) doubled from
2006 to 2009 (6 times
per year, up from 2.9
times in 2006)
Source: OCLC How Libraries Stack-up
Source: COLUSA Report
15
When asked about academic libraries
 95 percent of Americans (220 million) agree that
college and research libraries are an essential
part of the learning community.
 97 percent of Americans (224.5 million) agree
that college and research libraries connect users
with a world of knowledge
Source: COLUSA Report
16
Bigger, better, best libraries
UVA
Rules!
Can’t you
ever shut
up!
17
18
Troubling Stats for Monographs
1986 2008
+ 7.3%
$1.5mm $7.0mm
Annual Serials Spend
+ 374%
1986 2008
+ 2.9%
$29 $59
Monograph Unit Cost
+ 89%
1986 2008
0%
32,679 32,745
Monographs Purchased
0%
1986 2008
+ 4.4%
$4,011 $10,302
Salaries
+157%
1986 2008
+ 4.0%
$1,111 $2,645
Operating Expenses
+ 138%
1986 2008
+ 3.2%
109.6 219.9
CPI
+ 101%Source: ARL Statistics 2007 - 2008
Median Monograph and Serial Expenditures in ARL Libraries, 1986–2008
Expenditure Trends in ARL Libraries, 1986–2008 Unadjusted dollar figures
19
Supply & Demand
1986 2008
+ 6.4%
7,047 27,822
ILL Borrowed
+ 295%
1986 2008
+ 3.8%
16,092 36,383
ILL Lent
+ 126%
Population Change 1986 - 2008
Graduate Students
Faculty
Total Students
+ 3.4%
+1.3%
+1.4%
+ 111%
+ 33%
+ 36%
During the
period 1986 -
2008,
monographs
purchased
by student
population
fell 36%
Source: ARL- Statistics 2007-2008
20
Over reliance on Inter-Library Loan?
One
Year
Fifty
Times
21
Business strategy in the library world
 Delivering efficient services
 Understanding cost structures
 Opportunities in the network
 Effective resource management
 Expanding body of research
22
Analyzing the costs of book retention
23
The cost in book tonnage
Source: Courant, Nielsen: On the Cost of Keeping a Book
The books have already left the building
24
More than 70 million volumes off-site
 30% of Columbia’s collection
 40% of UC Berkeley’s
 50% of UCLA’s
 +50% of Harvard’s, etc.
No evidence that loss of browsing has adversely
affected scholarship or institutional reputation
Source: Malpas – RLG Partnership Symposium: “When the Books Leave the Building” Chicago, June 2010
25
Redundancy equals opportunity
 Scope of mass-digitized corpus in Hathi is
already sufficient to replace at least 30% of most
academic print book collections
 Ratio of replaceable inventory independent of collection size
 More than 750K titles (23% of corpus) held by at
least 99 libraries AND at least one large-scale
print preservation repository
 More than 1.5M titles (46% of corpus) held by at
least 25 libraries AND at least one
 Risk tolerance will determine appropriate level of
redundancy
Source: Malpas – RLG Partnership Symposium: “When the Books Leave the Building” Chicago, June 2010
26
Sharing may be good business
 Average US academic research library could
achieve:
 Space recovery of at least 20,000 ASF
• a new research commons
 Cost avoidance of ~$1M for new high-density
storage
• capital campaign diverted to commons
 Cost avoidance of ~$1M per year for on-site mgt
 Funds to be redirected to cloud providers
 Ongoing space reductions sufficient to achieve
steady state in campus collection
Source: Malpas – RLG Partnership Symposium: “When the Books Leave the Building” Chicago, June 2010
27
E-book readers in the library
The Asus E-Reader
The Plastic Logic Reader
Interead's Cool-er Reader
Sony's Digital Reader
Amazon's Kindle 2 and Kindle DXSource: Jared Newman. Get Ready for the E-Reader Rumble of 2010
Barnes and Noble - Nook
28
A buying pool for eBooks?
29
How is that a good model for us?
30
Toward a new model?
31
Recall: Relationships are hard
 Advance market intelligence
 Cooperative approach to understanding patron and
buyer
 Sourcing metadata from libraries
32
Recall: Relationships are hard
 Monographs to databases
 Applications, usage, linkage
 Serials experience is instructive
 Greater intelligence in purchasing
 Improving value proposition for libraries
 Socialize the books
33
Has the train already left?
• Libraries advanced
• A new business
Model
• Monograph
databases
• Toward an equal
model
34
Summary
 Libraries advanced in rebuilding their operations
 Expect to apply lessons of hybrid print/digital
paradigm to eBooks
 “Buy and hope” is not sustainable but,
 Potential to grow channel: demand and supply
imbalance
 Desire for cooperation
35
Please review my blog post associated
with this presentation:
http://personanondata.blogspot.com/2011
/06/ala-speech-parallel-universe-
monographs.html
Michael Cairns
Managing Partner
Michael.Cairns@InfoMediaPartners.com
908 938 4889
LinkedIn Twitter Blog Flickr InstaGram

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Parallel Universe: Will Libraries and Publishers Learn to Share?

  • 1. Michael Cairns Managing Partner Information Media Partners Parallel Universe Will Libraries and Publishers Learn to Share? American Library Conference 2011
  • 2. 2 Introduction Michael Cairns is a publishing and media executive with over 25 years experience in business strategy, operations and technology implementation. As a business executive, Mr. Cairns has successfully managed several troubled and under- performing businesses, creating new business opportunities, developing new funding sources and enhancing shareholder value for investors. His years spent as an operating executive have largely been with brand-name publishing companies such as Macmillan, Inc., Berlitz International, Wolters Kluwer Health, Reed Elsevier and R.R. Bowker. As a consultant, Mr. Cairns has worked with clients as diverse as AARP, Hewlett Packard, InterPublic Companies and Reed Elsevier with an emphasis on business strategy, market development and corporate development. His skills and experience include:  Business and corporate strategy development and implementation  Operations management and business transformation  Traditional and digital publishing and operations  Print-to-digital transformation and adoption of new business models  Software development and software services Mr. Cairns holds an MBA (Finance) from Georgetown University and a BA from Boston University. He has served on several boards and advisory groups including the Association of American Publishers, Book Industry Study Group and the International ISBN organization. Additionally, he has public and private company board experience. 2 Michael Cairns Information Media Partners Strategy Consulting New York, London, Melbourne Tel: 908 938 4889 Michael.cairns@infomediapartners.com Find me: LinkedIn Twitter Blog Flickr InstaGram
  • 3. 3 Information Media Partners Michael Cairns established Information Media Partners in 2006 as a boutique strategy consulting firm focused on the information and education publishing segment. The work conducted by the firm includes product development, corporate development, sales management and corporate reorganizations. We work with established businesses, private equity owners and potential acquirers. Examples of our work include:  Reorganized and re-focused a $25 million software publishing company by aligning business operations with client priorities; implementing internal collaboration tools and project management standards; re-building executive team to focus on effective and efficient management  Defined a new business strategy for a large non-profit association and advocacy group, expanding their business model into global markets to exploit their core knowledge and expertise across a broader market  Led an information technology capabilities review at a large international advertising holding company. Completed over 200 interviews in 15 international offices and multiple group focus sessions to define the operational ‘gaps’ between existing agency capabilities and those necessary and important for client delivery by region  Completed a sales management effectiveness review for a global software company and defined six key project initiatives to improve sales effectiveness, market development and account management We approach our client engagements in a standardized, logical manner which creates the best environment to identify key business drivers, administrative and logistical road blocks and/or product or market definition issues. Our investigative approach leads to better insights into your businesses and supports the development of workable solutions and recommendations for success. Visit the Information Media Partners website for more information. Sample Client List
  • 4. 4 Books are Books are not a success story Books are expensive Books are hard to navigate Books are of declining importance to scholars Books are rarely used Books are a lost opportunity
  • 5. 5 Libraries are Libraries are essential Libraries are socialist Libraries are not made they grow Libraries are important Libraries are green Libraries are a waste of money Libraries are obsolete Libraries are dead Libraries are cool
  • 6. 6 Questions for Books  Where  Which  When  Why Michael Cairns - Information Media Partners
  • 8. 8 We Can Work it Out We Can Work it Out
  • 9. 9 Agenda  Libraries today  Strategic initiatives  A way forward for publishers and libraries
  • 10. 10 An average spend of $150K? Estimated Data Points Public Library: $1,659M Academic Library: $340M Number of libraries: 13,000 Library total approximately 5% of total publishing industry revenue.
  • 11. 11 Improving Quality of Life 25.4 million Americans reported using their public library more than 20 times in the last year, up from 20.3 million households in 2006. Source: OCLC How Libraries Stack-up Source: COLUSA Report
  • 12. 12 Assisting patrons  Online job applications (67 percent)  Access to job databases and other online resources (88 percent)  Civil service exam materials (75 percent);  Software or other resources (69 percent)  Resumes and other employment materials Source: OCLC How Libraries Stack-up Source: COLUSA Report
  • 13. 13 Despite strong ROI  Reductions seen in 41 state library budgets during fiscal 2010.  Of states reporting decreases in local funding to public libraries, the majority were in the 5-10 percent range.Source: OCLC How Libraries Stack-up Source: COLUSA Report
  • 14. 14 51 million “by-computer” Patrons Use of the public library by computer (from home, work or school) doubled from 2006 to 2009 (6 times per year, up from 2.9 times in 2006) Source: OCLC How Libraries Stack-up Source: COLUSA Report
  • 15. 15 When asked about academic libraries  95 percent of Americans (220 million) agree that college and research libraries are an essential part of the learning community.  97 percent of Americans (224.5 million) agree that college and research libraries connect users with a world of knowledge Source: COLUSA Report
  • 16. 16 Bigger, better, best libraries UVA Rules! Can’t you ever shut up!
  • 17. 17
  • 18. 18 Troubling Stats for Monographs 1986 2008 + 7.3% $1.5mm $7.0mm Annual Serials Spend + 374% 1986 2008 + 2.9% $29 $59 Monograph Unit Cost + 89% 1986 2008 0% 32,679 32,745 Monographs Purchased 0% 1986 2008 + 4.4% $4,011 $10,302 Salaries +157% 1986 2008 + 4.0% $1,111 $2,645 Operating Expenses + 138% 1986 2008 + 3.2% 109.6 219.9 CPI + 101%Source: ARL Statistics 2007 - 2008 Median Monograph and Serial Expenditures in ARL Libraries, 1986–2008 Expenditure Trends in ARL Libraries, 1986–2008 Unadjusted dollar figures
  • 19. 19 Supply & Demand 1986 2008 + 6.4% 7,047 27,822 ILL Borrowed + 295% 1986 2008 + 3.8% 16,092 36,383 ILL Lent + 126% Population Change 1986 - 2008 Graduate Students Faculty Total Students + 3.4% +1.3% +1.4% + 111% + 33% + 36% During the period 1986 - 2008, monographs purchased by student population fell 36% Source: ARL- Statistics 2007-2008
  • 20. 20 Over reliance on Inter-Library Loan? One Year Fifty Times
  • 21. 21 Business strategy in the library world  Delivering efficient services  Understanding cost structures  Opportunities in the network  Effective resource management  Expanding body of research
  • 22. 22 Analyzing the costs of book retention
  • 23. 23 The cost in book tonnage Source: Courant, Nielsen: On the Cost of Keeping a Book
  • 24. The books have already left the building 24 More than 70 million volumes off-site  30% of Columbia’s collection  40% of UC Berkeley’s  50% of UCLA’s  +50% of Harvard’s, etc. No evidence that loss of browsing has adversely affected scholarship or institutional reputation Source: Malpas – RLG Partnership Symposium: “When the Books Leave the Building” Chicago, June 2010
  • 25. 25 Redundancy equals opportunity  Scope of mass-digitized corpus in Hathi is already sufficient to replace at least 30% of most academic print book collections  Ratio of replaceable inventory independent of collection size  More than 750K titles (23% of corpus) held by at least 99 libraries AND at least one large-scale print preservation repository  More than 1.5M titles (46% of corpus) held by at least 25 libraries AND at least one  Risk tolerance will determine appropriate level of redundancy Source: Malpas – RLG Partnership Symposium: “When the Books Leave the Building” Chicago, June 2010
  • 26. 26 Sharing may be good business  Average US academic research library could achieve:  Space recovery of at least 20,000 ASF • a new research commons  Cost avoidance of ~$1M for new high-density storage • capital campaign diverted to commons  Cost avoidance of ~$1M per year for on-site mgt  Funds to be redirected to cloud providers  Ongoing space reductions sufficient to achieve steady state in campus collection Source: Malpas – RLG Partnership Symposium: “When the Books Leave the Building” Chicago, June 2010
  • 27. 27 E-book readers in the library The Asus E-Reader The Plastic Logic Reader Interead's Cool-er Reader Sony's Digital Reader Amazon's Kindle 2 and Kindle DXSource: Jared Newman. Get Ready for the E-Reader Rumble of 2010 Barnes and Noble - Nook
  • 28. 28 A buying pool for eBooks?
  • 29. 29 How is that a good model for us?
  • 30. 30 Toward a new model?
  • 31. 31 Recall: Relationships are hard  Advance market intelligence  Cooperative approach to understanding patron and buyer  Sourcing metadata from libraries
  • 32. 32 Recall: Relationships are hard  Monographs to databases  Applications, usage, linkage  Serials experience is instructive  Greater intelligence in purchasing  Improving value proposition for libraries  Socialize the books
  • 33. 33 Has the train already left? • Libraries advanced • A new business Model • Monograph databases • Toward an equal model
  • 34. 34 Summary  Libraries advanced in rebuilding their operations  Expect to apply lessons of hybrid print/digital paradigm to eBooks  “Buy and hope” is not sustainable but,  Potential to grow channel: demand and supply imbalance  Desire for cooperation
  • 35. 35 Please review my blog post associated with this presentation: http://personanondata.blogspot.com/2011 /06/ala-speech-parallel-universe- monographs.html Michael Cairns Managing Partner Michael.Cairns@InfoMediaPartners.com 908 938 4889 LinkedIn Twitter Blog Flickr InstaGram

Editor's Notes

  1. (1) Good Afternoon, today I want to talk libraries which is a segment somewhat ignored here at this meeting in recent years. Important nevertheless since there is a lot going on in the library world. Any businesses connected to the publishing industry is experiencing change and increasing complexity: Libraries are no different.
  2. We naturally associate books with libraries but monographs have not supported the library mission for decades. (2) Data even hints that books are not a success story in the current library environment. I expect my statement will strike you as odd but research data from a range of studies suggests that books are expensive to manage, under-utilized, hard to navigate and of declining importance to scholarship. Additionally, books suffer from opportunity cost: Decisions to purchase specific books are rarely optimized with demand and thus, books that may have supported a need are not purchased and books that were purchased sit on shelves rarely used. Many agree that the publisher/library model must change as content migrates but a deeper analysis of these data implies we need to re-examine in a fundamental way the definition of the monograph.
  3. Libraries face many practical challenges. (3) Despite remaining critically important to their respective communities, public and academic libraries are under tremendous strain. This is particularly true of the public library. If not from actual dwindling revenue sources which cause layoffs, closings and reduced services, then from the passive aggressive stance of publishers who threaten to withhold their electronic titles from library patrons. In tandem, academic libraries face different but no less challenging issues about their position in education generally and on campus specifically.
  4. (4) This bleak outlook obscures the fact that big important questions are being asked about the future of books in the library. At all levels, libraries are embarked on a radical redesign and reevaluation of their activities which will redefine the library for monographs. These changes are almost completely hidden to publishers and, at a critical juncture in the transformation of the relationship between publishing and libraries neither side seems to know or appreciate enough about the circumstances of other.
  5. (5) The sharp disagreement over the provision of eContent may permanently fracture the uneasy alliance between book publishers and libraries as more content migrates to electronic form and consumers make electronic delivery their format of choice. This should be troubling to anyone who believes – as I do – that libraries and publishers share a desire to expand knowledge and community around books.
  6. (6) My comments today take the library perspective and I have organized my comments around three themes.
  7. (7) Firstly, how important are libraries to publishers in monetary terms? Secondly, a look at some of the most important strategic library initiatives under way and, thirdly what is the future for libraries and publishers?
  8. (8) First, at approximately $2.0billion, all library segments represent approximately 5% of industry revenues. This makes the entire segment approximately the size of a large chain retailer. If you heard me speak the last time I spoke to this group, you may recall I don’t place too much reliance on industry stats so in that light, treat these numbers as order of magnitude estimates of library sales. There are over 13,000 public and academic libraries in the US and these figures would suggest an average annual book spend of approximately $150,000. That may be a reasonable average. The primary focus of this presentation will be on the academic library environment; however, let me make some brief comments about the situation with public libraries in the US
  9. (9) To the general public, the value of libraries is unquestioned and here in the next sequence of slides are data from OCLC and a report I’ll note in a moment. Americans believe public libraries improve their quality of life and view the library as a resource to help them navigate an uncertain future. (And I’m often there myself).
  10. The library patron of 2010 seeks help, (10) reference material, education and community yet as economic circumstances deteriorate library budgets are slashed and services limited or eliminated
  11. Thus, while visits and circulation are up
  12. so are closings and service reductions.
  13. (13) Academic libraries are not immune to macro economic changes either; although they seem to have more flexibility to devise new methods of dealing with some of the economic challenges they face.
  14. As you may know, the library collection is viewed as a point of comparison (14) and remains important to the institutions accreditation. These factors present particular challenges for more effective and efficient services nevertheless even in this environment revolutionary approaches to collection management are being tested and implemented.
  15. For example, (15) can you envision an academic library with no physical books? That sounds absurd – even crazy - yet during a recent renovation, a large state university library removed all their books from the library and placed them in off site storage. Service for students and faculty during this renovation was impacted only minimally and once the library space was remodeled not all the books returned. Not only do the remaining books at this library look more like decorative display items than accessible resources but the space has been reconfigured to match a changed teaching environment. NYU removed 30% of their collection during a similar renovation. At the University of Texas recently, a new library received national attention as a library without any “books” There are more and more examples of this changed approach to collection development. As libraries rethink their physical collections, we shouldn’t lose sight of some more fundamental problems that book publishers should be aware of. The Association of Research Libraries publishes annual statistics and these reflect some troubling data points with respect to monographic purchasing trends over the last 20 years.
  16. (16) Serials publishers with their revenues up an average of 7.3% per year will be excited. Over the same period, the monograph publisher has seen prices grow a measly 2.9% per year with most of that increase occurring in the early years. Even more troubling, the number of titles purchased each year has straight lined since 1986. With an explosion in books published over just the past ten years, academic libraries are buying the same number of books as they were in 1988. Virtually all other categories have outstripped spending on books (including the consumer price index). Student and faculty populations have grown but this growth has not translated into more books sold. And as an aside since I don’t present data here, circulation is also going in the wrong direction. Importantly, these statistics are definitive: They are not isolated. When we contemplate how to approach the library market it is important that we recognize that current experience is very much a reflection of prior performance. In other words, I don’t believe we can expect this to get any “better”. It appears, monographs have been losing the knowledge race in university libraries for a long time and, if publishers value this segment then they need to recognize and then understand this.
  17. Not all the data is so black and white and perhaps there is some good news for publishers. For example, (17) viewing supply and demand in ARL libraries via the prism of inter library loans we see significant increases year over year for books loaned and borrowed. ILL isn’t studied in detail but I recently learned from OCLC that they are contemplating more analysis of this area and their initial research shows some interesting findings.
  18. For example, they have been astonished to learn of the number of times a single title (18) has been loaned more than fifty times in one year. It appears libraries are relying more and more on ILL to support spikes in their local demand. According to OCLC, these “hot titles” are often widely held titles suggesting that the data begs for more analysis. Certainly as a monograph publisher you would be troubled by some of these stats and would want more analysis. In summary, we face significant challenges in the academic and public segments concerning financial and economic issues however we can’t ignore the tenuous relevance of the monograph itself. Can it be business as usual for the monograph? Which brings me to the second part of my talk where I discuss some of the change programs already underway.
  19. (19) The academic library has been forced to re-evaluate its activities for a variety of reasons. If we reference the changes made generally over the past 20 years to accommodate a migration from paper to electronic materials then the current impact on monographs must really be an anticipated progression of their change programs. In other words it was foreseen. For example, one important change initiative could be characterized as one of “efficiency”. As the thinking goes; “are we as librarians delivering the appropriate services in the most efficient manner?” Whereas detailed cost analysis has always been possible, economic realities now enable solutions that previously may have been unrealistic for practical or political reasons. The life time cost of maintaining a monograph collection were always known to be expensive but limited alternatives to the open stack paradigm made real analysis irrelevant. With the rapid escalation in digitization programs and a collective approach to resource sharing, libraries now have viable options with respect to down sizing their monograph collections. This now defined expense coupled with the very real costs of real estate and development projects for new buildings has many university administrators salivating over all that “under-utilized” space
  20. (20) Research conducted by Paul Courant and Mathew Nielsen (The Idea of Order) explicitly documents the costs of maintaining a print monograph collection. The opportunity for publishers may rely on turning this analysis of the ‘life time cost’ of holding book into a sales opportunity for eBooks.
  21. The authors also calculate (21) that a typical academic library could be spending about $1mm just to maintain their legacy print collection. And in an environment where monograph usage is declining this large annual expense begins to look like an onerous and miss-guided use of funds. And for publishers, what response will you will get if you ask them to – in effect – add to this annual expense by buying more print?
  22. As I noted earlier, the case for a wholesale reevaluation of the idea of books in the library has gained credibility. As strange as it is to say, the physical book collection may not be needed. It may be both economical and efficient to remove them. Constance Malpas from OCLC goes a bit further when she comments (22) that “books have already left the building” – with over 70mm volumes having been removed from local collections and placed in off-site storage. Some important universities have determined that they can operate with little or no diminution of service while reducing their on-site collections. Simply moving books off site however, doesn’t represent a total solution. As the authors Courant and Nielsen note, electronic storage in addition to or combination with physical collections is most optimal because access to an electronic version of a book aids in selection of the title. If a user is able to look at the TOC or index or search the electronic version in advance of requesting the title then they are more likely to request from off site storage books they really need.
  23. Large (23) digitization programs such as Hathi Trust and others are beginning to support this type of “mixed platform” hybrid. The Hathi Trust is one of several digital repositories. At Hathi, their mass-digitized collection is sufficient to replace at least 30% of most academic print book collections. The potential savings are very real
  24. (24). Hathi grows daily and other repositories add titles at a similar rate. All have a different collection profile and different partnerships but at some point these repositories themselves will collaborate and weave together their collections so that the overlap or replacement potential across academic library collections will near 100%. Publics will also see some benefit here as well. So what are we seeing here? Initially, I spoke about the cost savings from more efficient use of physical space and transitioned into discussion about shared repositories of content. These activities are closely related and will be progressively augmented and expanded with further network level services. In short, more sophistication will ensue concerning access, applications and services focused on monograph content that historically was disbursed in the extreme volume by volume and library by library. Strategically, what might these initiatives mean for publishers? Libraries are not saying emphatically they don’t want print but their policies and practices are changing. In some cases new books go immediately to off site storage. In accessing these assets, the library also wants a digital copy that they can place in the catalog for search and discovery. The shared approach to collection management while reflective primarily of their retrospective print collections will become the paradigm for future purchases – both print and eBooks. Going forward publishers will be expected to accommodate this. While representing a challenge for both libraries and publishers there may be opportunities in working toward a new business model. Recall, that the combination of the ILL statistics and the Hathi stats on title overlap suggests – strongly – that supply and demand is significantly out of balance. Addressing this is an opportunity.
  25. (25) This discussion would not be complete without also bringing in the migration to eBooks and eContent. It may be in the transition to an eBook environment where publishers and libraries will clash. Beware however that it would be a significant mistake for book publishers to assume libraries are ignorant of the issues and complexities of eBook and eContent business models. In fact, libraries may have a more experienced view of the eContent business models than do many book publishers. Libraries participated in the migration of print serials and journals to online databases and most importantly facilitated the radical improvements in the provision of serials content to this segment. Some see similar and maybe greater opportunity as the monograph makes this transition.
  26. But publishers see eBooks in libraries as problematic. There may be more acceptance of eBooks in the academic setting but thus far much less so in the public library segment. (26) A recent report published by Chief Officers of State Library Agencies (COSLA) suggested that libraries seek to organize a national buying pool to source and negotiate eBook deals. We’ll see how far they get with that.
  27. Which brings me to the last part of this presentation. “How is that a good model for us?” (27) is how Macmillan CEO John Sargent put it when discussing the role of libraries in the future. He was referring to the ability of a patron to loan an eBook from their living room without having to stand up. “In the old world” he said, “there was a certain amount of friction in the chain that precluded this type of ease of use.” To take this model to its obvious conclusion, wouldn’t every reader get a library card and an eBook reader and download books free from their local library? Perhaps, and it would be hard to recognize the value of this model to publishers. Libraries see it differently though: EBooks represent an opportunity to engage people who can’t or won’t come to the local library. The practical benefits of eBooks mitigate the reduction in opening hours, staffing and geographic/location issues that preclude use of the libraries. Academic libraries also see huge opportunities to improve the utility of the eBook titles they buy. On the other hand, the COSLA report also pointed out access to eBooks is currently nowhere close to the environment envisioned by Sargent. The study confirmed that getting eBooks isn’t convenient or easy to do. Typically, the user interface is described as unfriendly and the fact that eBook sites are often not integrated with a library’s web site makes the eBook catalog hard to find. And of course many libraries simply don’t have the money for complete eBook catalogs.
  28. (28) Looking forward to a new model publishers naturally and quite rightly require a model that represents “true-value” for their sales into the segment but, in my opinion wondering whether eBooks can be managed, controlled or rationed in the library marketplace misses the larger picture: Monographs are on the downswing. The bigger question we should be asking is “Why don’t monographs work in the library anymore?” There should be mutual interest here: Publishers want to continue to make their monographs available to libraries and libraries want to most effectively match their collections to the demands of their patrons. What might these areas of cooperation encompass and does the migration of formats – print to eBook – represent an opportunity to reinvigorate the book?
  29. Here are four suggested programs libraries and publishers might consider adopting in concert to their mutual interest. (29) Firstly, there is too little market intelligence about the behavior of a library patron from their use of the library material to their book buying behavior. For example, is the heavy library user also a buyer of books and, how does their behavior change when eBooks are made available? Understanding the inter-play between library lending and purchasing should be critical to defining a new or optimal model that allows a full catalog of eBooks to be made available via the public and academic library. Libraries routinely make the point that library patrons contribute significantly to the marketing of all books. Defining this would represent an important improvement in the relationship and understanding between publishers and libraries. Secondly concerning metadata, as serials publishers transitioned to eContent it became clear quickly that many (most) of them had significantly incomplete metadata about their historic catalog. Libraries helped fill some of those important gaps and thus enabled the publishers to create better, complete and more expensive databases. Book publishers almost certainly have a similar issue and while many of them may not know it yet, monograph collections are likely to look more like database products in five years than a collection of individual pdfs. In that database environment the publishers are going to want better metadata. In the effort to create better data publishers and librarians could collaborate.
  30. (30) Thirdly the manner and method that characterizes the migration serials publishers made from print to database products should be instructive for monograph publishers. Earlier, I suggested - or predicted - monograph databases and here is where the lessons of the serials business could be most important and instructive. Libraries want to buy books that are read and used, they want books that are cited and referenced and they want books that support the departments that they serve. As serials publishers recognized, better content and increased functionality drives usage and usage drives renewals and is likely to enable rising annual subscription prices. Publishers of monographs think in terms of one time sales but in a database world they need to be thinking of an integrated database of content that draws usage and is licensed annually. The ISI citation index that measures the ‘importance’ of a serials title is one of the most important metrics in serials acquisition and it is likely that something similar will develop for monographs and/or monograph publishers. Monographs will be graded on their utility to researchers, academics and patrons and gone is the day that a book will sit unobtrusively on a shelf for years; moreover, gone is the day a book “sits” independently of all the other books. Serials publishers/aggregators provide substantial value-add for the e-titles they provide in comparison with those delivered in the print world and product development hasn’t stopped. Recently Elsevier announced a ‘developer platform’ that allows third parties to build applications and services around the Elsevier journal content extending the value proposition to all Elsevier customers. These features represent some of the ideas monograph publishers should be considering as they make the transition to eBooks in the library segment. ‘ Just-in-case’ purchasing has failed. To assume this model will transfer to eBooks is to ignore fundamentals. While the old monograph purchase model has collapsed there remain indications from ILL data that demand for certain monographs remains high. Even now, ILL data can and should be used by both libraries and publishers to better match demand with supply for print. As print demand spirals downward libraries and publishers should be sharing information to anticipate increases in demand and thus optimize the demand for these titles. Perhaps this effort could form the basis of greater cooperation in the larger question of the future of the monograph. Fourth and last, smart publishers are going to think hard about some of the data about the lifetime cost of books presented in the report by Paul Courant. Publishers will need to copy serials publishers to significantly increase the value proposition of the content. To achieve this goal, publishers may determine that databases provide greater utility supporting deeper linking, citations and enabling annotations than selling titles one by one. A publisher in a position to collect and collate the reader experience - to collect the social ‘exhaust’ in the references, notes, citations, commentary. etc - will be able to build a stronger franchise with the library buyer. Enabling an ability to document the scholars’ interaction with books will serve to reinvent what the monograph represents to library patrons.
  31. (31) Publishers have their work cut out for them assuming they view the library market as one they wish to invest in for the future. Given the long experience of monographs in the library segment their effort is long over due.
  32. John Sargent is right to ask “Is this a good model for us?” but libraries could also ask a similar question. (32) Publishers and libraries have an opportunity to build a new model and a better product and libraries are already moving toward their version. Will publishers join them?
  33. (33) Thank you and I’ll take questions. My thanks to Constance Malpas at OCLC who provided the initial inspiration for this presentation in her presentation to the RLG seminar which I attended in Chicago and later in email discussions between the two of us as I was putting my presentation together. Her influence is especially represented in the last section of this presentation.