ICOLC Statement on the Global Economic Crisis

["Ivy Anderson" <Ivy.Anderson@ucop.edu>]

Liblicense Colleagues,

The following Statement on the Global Economic Crisis and Its 
Impact on Consortial Licenses has been released today by 
International Coalition of Library Consortia (ICOLC).

For a list of consortia that have endorsed the statement, please 
see the full document at http://www.library.yale.edu/consortia/

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FOR IMMEDIATE RELEASE

INTERNATIONAL COALITION OF LIBRARY CONSORTIA (ICOLC)

Statement on the Global Economic Crisis and Its Impact on 
Consortial Licenses

January 19, 2009

Written on behalf of the many library consortia across the world 
that participate in the ICOLC, this statement has two purposes. 
It is intended to help publishers and other content providers 
from whom we license electronic information resources (hereafter 
simply referred to as publishers) understand better how the 
current unique financial crisis affects the worldwide information 
community.  Its second purpose is to suggest a range of 
approaches that we believe are in the mutual best interest of 
libraries and the providers of information services.

The ICOLC library consortia consider the current crisis of such 
significance that we cannot simply assume that libraries and 
publishers share a common perspective about the magnitude of the 
crisis and the best approaches to cope with it.  ICOLC members 
have been exchanging perspectives about how the current economic 
recession will impact consortia and their libraries.  We make the 
following forecasts about the impact of this crisis on libraries 
and library consortia.

1.  We expect significant and widespread cuts in budget levels
    for libraries and consortia:  reductions unlike the sporadic
    or regional episodes experienced from year to year, with real
    and permanent reductions to base budgets.  It may not be
    uncommon for library and consortia budgets to decline by
    double digits year over year.  We have yet to see the full
    effects, as many 2009 journal and database subscriptions have
    already been renewed.  As of late 2008, many institutions have
    declared significant budgets cuts in all areas (content,
    staff, and operations) for 2009.  Some consortia are
    experiencing significant economic impact in the current fiscal
    year; by calendar and fiscal 2010, the cuts will be in full
    force and widespread.

2.  These cuts will be prolonged.  The public and education
    sectors will likely lag in funding recovery.  Once funding is
    withdrawn over multiple years, it will be years before budgets
    climb back toward pre-crisis levels.

3.  Exchange rate fluctuations are complicating and in some cases
    amplifying the impact.

We encourage publishers to recognize these fundamentally 
different circumstances as we work together for the benefit of 
all parties. Library consortia are uniquely positioned to be the 
most effective and efficient means to preserve the customer base 
for publishers and create solutions that provide the greatest 
good for the greatest number.  By working together, publishers 
and consortia can create the most effective pricing and renewal 
options and maintain the broadest base of subscribing libraries 
and services.

While we cannot be prescriptive where solutions are concerned, we 
suggest the following principles and techniques as likely to be 
the most effective approaches.

Principle 1:  Flexible pricing that offers customers real 
options, including the ability to reduce expenditures without 
disproportionate loss of content, will be the most successful. 
In stable times, standardized pricing and terms may work 
relatively well.  Today, purchasers will be under heavy pressure 
to reduce their outlays and need solutions that let them do so 
while continuing to offer as much content and service as 
possible.  It is in the publisher's best interest that we avoid 
all-or-nothing, take-it-or-leave-it decisions and options, whose 
lack of flexibility is likely to result in far greater damage 
than is absolutely necessary.

Principle 2:  It is in the best interest of both publishers and 
consortia to seek creative solutions that allow licenses to 
remain as intact as possible, without major content or access 
reductions. Content, once discontinued, will be very difficult to 
reinstate at a later date. While there may be practical limits to 
this principle, publishers, authors, scholars, and libraries will 
be best served by those solutions that retain as much access to 
as much content as possible.

With these two principles in mind, we suggest the following 
approaches:

1.  Purchasers will trade features for price; that is, we can do
    without costly new interfaces and features.  This is not a
    time for new products.  Marketing efforts for new products
    will have only limited effects, if any at all.  Libraries will
    have few if any resources to invest in new titles or more
    content elements.  Publishers who work with the scholarly
    communities to understand what content is critically needed
    will be the most successful.

2.   Putting price first will help all parties, because budget
    pressures will drive decisions in a way never seen before.
    Real price reductions will be welcomed and can help to sustain
    relationships through the hard times.

Even increases at inflation levels will not be supportable by 
many groups and libraries.  Other approaches and options must be 
considered and made available.  Some options may be uniquely 
created to take advantage of local situations.  Therefore:

3.  Tailoring content to need and pricing accordingly can be very
    helpful.  For example, customized approaches that look to
    usage patterns as the basis for an adjustment may be equitable
    for all parties.  In the case of tiered pricing schedules,
    applying this flexibly to core content packages in combination
    with more affordable pricing for single titles may create
    another affordable option.  Multiple, creative options are
    needed so that library consortia can work with their members
    to fashion the optimal purchase level.

4.  Multi-year contracts will be possible only with clear opt-out
    and/or reduction clauses.  As difficult as these clauses can
    be, the only alternative for many institutions will be
    year-to-year (or even shorter term) licenses.  These increase
    the administrative overheads for all parties and may encourage
    further reductions.  Additionally, opt-out clauses must as
    well recognize the need for a flexible set of reduction
    techniques that avoid penalizing customers in either the long
    or short term.

5.  While annual payments currently are the most prevalent
    payment schedule for group licenses, options will be needed
    for semi-annual or quarterly payment schedules, in combination
    with more flexible opt-out/reduction clauses and renewal
    cycles.  Libraries and consortia may have very little warning
    of changes in their budgets.  Payment options are a necessary
    precaution in light of rapidly changing financial
    circumstances and expectations.

*  *  *

In combination, we suggest these approaches as a way to advance 
the conversations among libraries, consortia and publishers, who 
all hope to preserve existing relationships, provide as much 
information to users, and generate as much business as budgets 
will allow.  We believe our recommendations provide a solid 
foundation for the information community, including the 
publishers of scholarly information, to go forward together in 
these difficult times.

The current situation may in the long term serve as a catalyst 
that challenges publishers, scholars and libraries to create a 
system that will more efficiently produce and disseminate the 
growing output of global scholarship.

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FOR FURTHER INFORMATION ABOUT THIS STATEMENT, PLEASE CONTACT:

Faye Abrams, OCUL Projects Officer, Ontario Council of University 
Libraries, 416-978-421, faye.abrams@ocul.on.ca

Ivy Anderson, Director, Collections, California Digital Library, 
University of California, Office of the President, (510) 
987-0334, ivy.anderson@ucop.edu

Diane Costello, Executive Officer, CAUL (Council of Australian 
University Librarians),
+61 2 6125 2990, diane.costello@caul.edu.au

Ed McBride, Chief Marketing & Outreach Officer, SOLINET, 
404-892-0943 ext. 4864, emcbride@solinet.net

Arnold Verhagen, University Librarian University of Amsterdam, 
and Licensing Consultant UKB-consortium, +31 5252307 or +31 
611292816, a.j.h.a.verhagen@uva.nl

Hazel Woodward, University Librarian and Director of the 
University Press, Cranfield University, +44 (0) 1234 754446, 
h.woodward@cranfield.ac.uk

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