Macmillan is one of the largest publishers in the world and they upset libraries when they announced they were implementing an embargo for ebooks. Instead of giving libraries access to as many copies as they want, Macmillan decided to wait numerous months, because they think libraries are cannibalizing their digital sales. It looks like Macmillan might scrap this system altogether and are currently running trials under new pricing models.
“This is a complex ecosystem. What we are trying to do is use the levers we have available to try to figure out an answer,” Sargent told librarians in Philadelphia. “We tried something. It’s clear that the library community did not like what we tried. I still think there’s value in it. But, is it the right thing to do? I don’t know. We might look at having two models. You can buy it from this model, or you can buy it from that model. We are not saying we are going to do this forever. We are trying to find a way to fix an issue that we all have.”
There are three different pricing models that the publisher is implementing with a number of libraries under a trial basis. Based on the results, we could see one of these models fully implemented for all libraries worldwide. In all three proposals, Macmillan’s eight-week embargo on new release ebooks to libraries is abandoned. Gone, too, however is the single, half-price perpetual access copy.
Proposal 1: Metered by circ period: The price is an increase of 33% ($80 up from $60) on titles for the first 8 weeks. This model is based on two-year licenses. Too many times we see licenses “explode,” not getting many circs before expiring. Best case for us in two years (at two weeks per) would be about 50 circs.
Proposal 2: Pay-per-use: I am assuming that the base cost we are working from is $14.99 (standard retail price?) but perhaps some costs would be lower? 70% in first 8 weeks is $10.49. That’s about what Macmillan what says they get from a consumer sale. 40% is $5.99 ($5.996 actually, or $6.00, but maybe they give us a penny). 20% is $2.99. Many librarians who order dislike pay-per-use. It is often a budget buster, with a few high demand titles eating up lots of the money. One must quickly cap circs per month per user, as many libraries have had to do with Hoopla. And at these prices–$10.50 a circ upfront? What library could afford it? Over time, the price is more attractive, but still high. This one would work if it were perhaps extended to some low-cost titles, perhaps the equivalent of mass market genre works, but not high-cost first run titles. Looks like embargo through price. Maybe offer on your backlist at $1.00 per circ or so?
Proposal 3: Metered per use and time: For the first 8 weeks that an ebook has been released, libraries would pay $70 for 10 loans, from 8-16 weeks it would be lowered to $60 for 10 loans, after 26 weeks it would be reduced to $20 for 10 loans.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.