caul - industry think tank pricing models may 23, 2002 adam klein vice president

CAUL - Industry Think Tank

PRICING MODELS

May 23, 2002Adam KleinVice President

Outline

I. Background Information

II. Factors Influencing Pricing

III. ISI Pricing Models

IV. Other Models?

V. Conclusions

VI. Questions

Background Information

• ISI - A Secondary Information Publisher• Best Known Products: ISI Web of Science & ISI Current Contents Connect

• ISI - A Pioneer in Pricing Strategies

• 1993 - CAUL Agreement For Current Contents on CD-Rom Covering All Australian Universities

• Today - ISI Has Entered Into A Significant Number of Consortia Agreements Throughout the World, Including A Recent One ...


• In Today’s Knowledge Economy, Libraries Need & Require Greater Access To Information Resources For Patrons At A Lower Cost Per User

• Publishers Need & Require To Expand Their Businesses To More Users Worldwide

• It Sounds Like There Are Common Issues To Discuss!


• Sustainable Pricing Models - Sounds Good BUT…

• Pricing Models Vary From Country to Country and Within Countries and Must Evolve Over Time Consistency is KEY

• Models Require Flexibility To Deal With Unique Customer Issues

• Pricing Models Are Only One Component Of The Equation - Exploring Creative Funding Options Is Also Required

Factors Influencing Pricing

• ISI Products (Files & Depth Selected) • Web of Science (3 files/2files/1file/years of access)• Current Contents (1-7 Editions and 2 Collections)• Other Web Products

• Size of Institutions - # Of FTE’s

• Physical Locations

• Access - University Staff Only? Commercial Partners?

Factors Influencing Pricing

• Customer Loyalty - Existing Subscriber vs. New Subscriber• Providing Past Purchase Credits For Current Subscribers

• Size of Contract - Allows Additional Flexibility; Example: National Site License

• Prevailing Economic Conditions - Are Considered When Developing Pricing

ISI Pricing Models - What We’re Doing Today

• Tiered Models - Segmenting the Market

• Subscription Models - Payment Plans

• Country Access Models - Iceland

NOTE: These Models Are Not Mutually Exclusive


• Tiered Pricing Models (Market Segmentation)

• Used With Consortium Groups • Enables Smaller Institutions To Acquire Data At Lower Costs• Segmentation Data Agreed To By Both Customer & ISI• Typically Use Published Sources

• Data Can Include:• FTE’s• Budgets • Research Output (# Of Papers Published)• Or Other Mutually Agreed to Statistics

• Weights (%’s) Are Applied To Each Data Source


• Tiered Pricing Models (Market Segmentation) - Continued

• Anomalies Are Dealt With (e.g., If A Small, But Well Funded Research Institution Falls Into A Lower Tier)

• Requirement For Success - All Parties Agree That Differential Pricing Is Both Necessary and Acceptable


• Subscription Models (Payment Plans)• Defers Upfront Costs & Spreads These Over Multiple Years• Working With Customer Budgets / Funding Ability• Flexibility Determined By Contract Size• Requires Multi-Year Agreement


• Country Access Models - Iceland• Population 283,000; 100% Literacy; 80% Internet Access• Price Per User Is Lower Since The Number Of Users Increases Dramatically In This Model

Other Models?

• Advertising Models

• Reduces Product Costs Through Advertising Subsidies• What Will Users Think?• Further Commercialization Of Scholarly Content?

Conclusions

• ISI Strategy - Cooperation & Partnership

• Flexibility Is Key - Implies Models Will & Should Vary

• Pricing Models Are Just One Component Of The Equation -Creative Funding Is The Wave Of The Future

• GET READY...A New Technology Vehicle Is Likely To Come Along That Will Turn The Industry Upside Down Again…Like The Internet Did

• Never Take Your Eye Off Of The End User - The Ultimate Customer...

Conclusions

“What is changing is that as the competition narrows to a handful of major players,

• the players that listen best• that command the deepest understanding of your needs• and have the greatest flexibility to fulfill them…

will be your partners of choice.And it is our ambition to ensure that Thomson is one of your partners.”

Richard HarringtonPresident & CEO The Thomson Corporation

Questions For Discussion

• What Changes Are Coming That ISI Needs To Monitor?

• Are There Alternative Models That You Would Like To See?

• Let’s Chat!

Thank you!

caul - industry think tank pricing models may 23, 2002 adam klein vice president

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