Scan of Pricing Models for Online Content
Prepared by Albert W. Darimont
�OnDisC Alliance 2001
1. Executive Summary
in Today's Academic Libraries
The objective of this research project is to
perform an environmental scan of pricing models
for online content to help the OnDisC Alliance
and BELLE/Netera formulate an effective e-commerce
model. Towards this end a number of literature
searches, interviews and web searches were performed.
The research was directed in several areas to
ensure that the results provided a broad context:
e-business models in general and for electronic
content in particular; the developments in the
library field towards digitization in general
and in the use of e-journals in particular;
discussions with specialists in a number of
relevant fields; and a broad survey of content
providers on the internet.
The e-business literature revealed the breadth
of different pricing models available and gave
insight into the nature of price and market
differentiation, which is an effective strategy
for increasing the user base for digital content.
An example of price differentiation is to sell
the same product to two different kinds of users
at different prices thereby maximizing overall
Libraries have been at the forefront of technological
changes for many decades, and much research
has already been done on the potential for e-journals
to greatly improve library service for academic
institutions. Electronic journals allow for
the dis-aggregation of journals and novel pricing
schemes using bundling of articles and metered
use (pay as you go). Libraries tend to like
the flexibility and cost savings that these
novel pricing schemes allow but there are disadvantages
such as increased administrative overhead and
the potential for metering to inhibit end users.
The discussions with industry specialists and
subsequent web searches revealed a number of
content aggregators "organizations which
accumulate digital content from a number of
different providers for redistribution"
which have moved beyond the stage of subsidized
pilot project status towards operational independence.
Background papers and pricing schedules were
found for JSTOR, AMICO (Art Museum Image Consortium),
SCRAN (Scottish Cultural Resources Access Network)
and ECO (Early Canadiana Online) which revealed
that all of them use price differentiated academic
institution subscriptions to generate revenue.
Two of the four, JSTOR and ECO charge a one-time
up-front fee to help pay for the cost of initial
Web searches revealed a number of sites offering
cultural and educational content in various
formats including streaming video, audio, text,
animation, images. Many of these sites generate
revenue from banner advertising, affiliate referrals,
product sales, and donations as well as subscriptions.
Many pricing models are possible by combining
or blending the above revenue streams. The wide
variety of cultural and educational content
available on the web attests to the effectiveness
of these models.