Google Book Settlement Market Analysis Q&A
Consultant suggests 65% of academic libraries would subscribe; database may serve as entrée to library market for monographs
Norman Oder -- Library Journal, 04/22/2010
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- Cairns is former president of Bowker
- Cost to academic libraries might average $55,000
- Established library vendors may market database
How many libraries would buy access to the millions of titles in the Google Books database, assuming the pending settlement is approved? How much might it cost? Who would market it?
In a paper titled “A Database of Riches: Measuring the Options for Google’s Book Settlement Roll Out,” Michael Cairns, former president of R.R. Bowker and Managing Partner, Information Media Partners, offers some informed—though admittedly not definitive—analysis of “the potential market opportunity that the Google Book Settlement could represent.”
He think the database is an easy call for most libraries offering potentially great savings over interlibrary loan, and he says that two controversial aspects of the settlement—the number of “orphan works” and the revenue model Google would implement—have gotten far too little analysis.
LJ’s Norman Oder, Executive Editor, News, posed some questions.
LJ: While critics of the settlement suggest Google could pursue monopolistic pricing and thus become like some much-criticized STM publishers, you think there’s a counter-balance.
MC: This is certainly a contentious point but I do think that Google seeks maximum exposure for the content—not only to support its stated mission of providing wide and broad access to this ‘hidden’ content, but also to support other business opportunities they may implement (such as advertising programs). And while I don’t cover potential uses of the scanned book content to support advertising programs (or business models) these may be launched as Google rolls out the offering
Google will see overly aggressive pricing as an inhibitor to wide market acceptance of the product. The company will also want to be able to promote increasing levels of usage and utility to librarians in an effort to both encourage new subscriptions and support renewals. To that end I expect that Google will incorporate functionality that encourages usage—particularly linking, reference and curation tools—and to continue to add content. On the other side will be the authors and publishers who will want to ensure ‘true value’ for their content and Google may act as a countervailing force to the authors desires for higher pricing.
You think single-terminal free access to database for all public libraries and certain academic libraries won’t affect revenue or dampen subscriptions—why?
There’s no question this will have some impact particularly on the market opportunities for small libraries. In my financial model I assume a low penetration rate for small public libraries and here the provision of a terminal may be all they require.
In a broader sense however, I view this issue as one of utility: Site-wide network access (possibly also remote access) will be a far more practical solution for most medium to large institutions. Where libraries only have the free terminal and this becomes continually used by patrons and librarians it could cause those libraries to seek a paid subscription so that they can meet demand more effectively.
What’s the basis for your calculation that 47% of the 9198 public libraries will subscribe, at an average price of $21,000? How crucial will price be?
The 47% is a ‘blended’ rate in that I assumed higher or lower levels of penetration based on the size of the library. With respect to price, my price quotes are estimates of what I believe is reasonable. I’ve had several people who reviewed this document suggest to me that based on the expected broad and deep depth of this database, my pricing is low versus some other aggregated databases with substantially less content. On the other hand, I am sure there are some who think $21,000 is pretty steep.
No matter what price Google selects they will have their own targets on revenue and subscriptions and they will adjust accordingly if they don’t meet those targets. Price becomes an issue if users aren’t using the product and I think Google will be very aware that they will need to continue to add value to this product via things like better navigation, bibliographic data, more content and additional functionality. As more people use the database the cost per access/query starts to go down and that’s a good conversation to have with your customers.
You estimate that 65% of academic libraries would subscribe. How do you get that percentage, and how do you calculate the average $55,000 price?
Similar answer to the above question on publics. Academics however will subscribe in greater numbers because the database will be considered a must have. Gaining access to this collection can in-effect place an academic library that otherwise would not have the financial resources to match those of a large institution on par in terms of their access to materials. In many cases the libraries that have participated in the project to date built their collections over decades (or more) and these tremendous resources will now be accessible to subscribing libraries.
You think it’s unlikely that Google establish their own sales force but rather will contract with one or more established player, such as ProQuest, Gale/Cengage, OCLC or EBSCO—or maybe more.
Working with a single provider represents an effective solution for Google but may not also be efficient. In order to achieve greater efficiency in reaching their target market while also eliminating possible “political” issues caused by selecting one vendor over the others, the company may consider allowing any provider to sign a standard distribution agreement. That potentially enables providers to integrate the Google product with their existing products and may enable Google to gain access to index all content supplied by their third-party sales partners.
Choosing one provider could limit Google’s market to only those customers serviced by that provider. Allowing broader access should ensure they are able to provide immediate subscriptions to all markets and customers who want the service almost from day one.
With 12 million titles, you estimate each has an annual value of $22 per year to Google. That doesn’t count advertising, right? And is 12 million total the right estimate if non-English foreign works and duplicates are eliminated?
You are correct advertising is not included. The 12 million number is the total of books scanned to date and the eventual number of books in the database will be a subset of this number. Since the precise amount is unknown I’ve used the total. My own view is that even if the eventual number is a lot smaller the value of the resource remains substantial.
Can the database become the primary access point for monographs in the library market?
Future market opportunities include the addition of other content, inclusion of international English, and non-English works, addition of more in-copyright materials closer to current pub dates, and potential third party application development. Admittedly, I may be taking a leap here and this statement is included in my summary of potential future developments; however, I believe publishers and libraries are on the verge of a major struggle to define a new and workable solution to making ebook content accessible via libraries. If this solution becomes successful we may see publishers view the database as a viable solution into the library market for all their content. Note however that the agreement doesn’t allow for the inclusion of recently published content.
In August 2009, you published an estimate of the potential number of orphan works: 580,388. That’s far lower than others have estimated.
There is/was a lot of hysteria about the potential number of orphan titles—none of it based on fact—which, in my report I attribute to laziness. In contrast, I reviewed some pre-existing statistical information produced by Jean Peters for RR Bowker documenting the numbers of new titles published in the U.S. since 1920. While I estimated that “orphans” would be more prevalent among older titles, the total annual title output only exceeded 15,000 for the first time in 1960 (according to the source data); therefore, the universe of all titles published between 1920 and 1980 is actually relatively small. Publishing output only rapidly increased during the late 1980s and it is assumed that the majority of these titles will not be ‘orphans’ because copyright information is readily available and confirmable.
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