D-Lib Magazine
July/August 2001

Volume 7 Number 7/8

ISSN 1082-9873

The New Digital Divide

Dissecting Aggregator Exclusivity Deals


Steven J. Bell
Director, Gutman Library
Philadelphia University

Red Line


(This Opinion piece presents the opinions of the author. It does not necessarily reflect the views of D-Lib Magazine, its publisher, the Corporation for National Research Initiatives, or its sponsor.)


Several months ago, I attended a meeting of the directors of libraries belonging to a regional consortium. Before the meeting got underway, a sales representative from one of the major database aggregators made a brief presentation. In the ongoing aggregator wars, contemporary ammunition is full-text journal content, and the sales representative was manning the big guns that day. Boasting of unprecedented amounts of full text, this vendor assured us that the databases offered by her firm offered far more than its competitors. Pretty standard fare so far. But what really got my attention was the announcement that this aggregator had secured exclusive rights to the full text of the Harvard Business Review (HBR). As a subscriber to a competing aggregator that offers the venerable business database ABI/Inform through its Proquest system, I was astounded to hear this claim. I thought, "How could my database aggregator let such a thing happen?" According to the sales representative, the publishers of HBR no longer wanted to offer their wares through multiple aggregators and had chosen her firm based on its special relationship with publishers and libraries.

This revelation led me on a several months' journey to discover the real issues behind this seemingly passive database development. What I uncovered, with help from a reporter from Library Journal, is a trend toward publisher-aggregator exclusivity deals. The information I found provides a glimpse into a new evolving information marketplace where publishers and aggregators can easily restrict the flow of information to their customers through embargoes. Such a marketplace has the potential to create a new digital divide among libraries and their patrons.

The forces driving the recent change in aggregator behavior are in part based on a desire, by an aggregator whose business also includes a subscription service, to protect revenues lost when libraries cancel print subscriptions for electronic journals. The new digital divide is being caused, to some extent, by publisher and subscription service fears about print cancellations that could occur when journal publishers and aggregators provide access to extensive full-text content in electronic format. The situation creates a complex cycle in which aggregators compete by offering more full text, which leads libraries to cancel print titles, which in turn causes publishers and subscription services to lose revenues. Can they really be blamed for trying to protect their sources of income?

The next step in my journey took me to my database vendor. I contacted my sales representative to ask if it was true that their service would no longer offer the full text of HBR. According to my representative, what I had heard at the meeting was partially correct -- ABI/Inform would no longer provide HBR full text -- but the rest was not entirely accurate. In fact, the HBR publisher's decision to award exclusivity to the other aggregator had little to do with favoritism or relationships, but rather was based on a mega-dollar offer for exclusivity rights to this plum business database journal. The acquisition of such crown jewels affords bragging rights along the lines of "only WE offer the full-text of HBR," but it also puts libraries in a bind. If the library's existing aggregator database no longer offers the full text of HBR, and that library's patrons really want access to the full text of HBR, then the library has a tough decision to make.

Like many librarians, I prefer to base aggregator database licensing decisions on features such as search interface, quality of abstracts, availability of a strong controlled vocabulary and other added value features. I should not be forced to choose an aggregator based solely on the availability of full-text content. However, if the trend toward exclusivity deals between publishers and aggregators continues, then a library's decision variables may grow slim.

Wanting to learn more, I contacted Andrew Albanese, a reporter for Library Journal and Library Journal's Academic Newswire. Albanese is tremendously knowledgeable about the database aggregator industry, but at that time, even he was somewhat unfamiliar with publisher and aggregator exclusivity deals. After listening to my story, Albanese agreed to investigate. Fact checking and interviews confirmed that exclusivity deals were indeed a new trend in the database aggregator business model. Why they were needed was not well understood, but some new details emerged. The amount paid for the exclusive rights to HBR, rumored in the seven-figure range, would remain unknown, but Albanese learned that along with exclusivity came an embargo clause.

Embargoes should strike fear in the hearts of librarians. When a full-text electronic journal is embargoed, the publisher holds the right to prevent the aggregator from making the full text available for a specified period of time. Why would publishers seek embargoes? I believe that they do so to create a mechanism intended to deter the cancellation of print subscriptions. How can a library cancel the print format when the full text won't be available in its aggregator database until six months after the date of publication? The library can hardly inform its patrons to just be patient until the full text is available from an aggregator. Though publishers rarely enforce these embargo rights on aggregators, nevertheless their rights to do so exist.

Now take this one step further. The publisher wants to protect their subscription revenue. The subscription service provider wants to protect their serials management and renewal service revenue. Both lose revenue when libraries cancel print subscriptions. Is it far fetched then to conclude that a publisher and an aggregator with a subscription service mutually benefit each other when they form an exclusivity deal bolstered with an embargo?

So, how does the new digital divide manifest itself, and what role do exclusivity deals play? Exclusivity deals may cause little pain for large, well-funded libraries. Such libraries are more likely to offer multiple aggregators, and when a library can offer multiple aggregators, the damage caused by exclusivity deals is greatly minimized. If Vendor A is the only one offering journal C, while Vendor B is the only one offering journal D, then for those who can afford it, the solution is to subscribe to both Vendor A and B. (However, as solutions go, even this one is far from perfect. The more aggregators a library offers, the more cumbersome it can be for library users to locate and retrieve articles from specific journals.) For libraries that cannot afford to acquire multiple database systems, exclusivity deals mean settling for one aggregator and losing access to necessary journals. A new digital divide will be created between the patrons of libraries that can afford multiple aggregators and patrons of those libraries that cannot.

Are there solutions available that might allow us to avoid creating another digital divide? With significant revenue at stake for publishers and aggregators, the situation is complex. I see two distinct problems needing to be addressed: acknowledging the realities of print title cancellation, and questioning the necessities of exclusivity deals.

Publishers and aggregators might be encouraged to create business models based on a realistic accounting of journal cancellation by libraries. There is a perception -- a false one, I believe -- that library managers immediately cancel a print title as soon as it is available from an aggregator in full-text format. Yes, certain esoteric or little used titles may be targeted for cancellation under these circumstances, but the majority of libraries will choose to maintain a separate print counterpart to the full-text database holding. Countless libraries that early on decided to mass cancel titles when full text became available in databases quickly realized the folly of their actions when aggregators showed no loyalty to their offerings. Titles have been routinely dropped and added, making it difficult, if not impossible, for libraries to base future access to a journal title from doing business with any particular aggregator (other than the publisher's own e-journal collection perhaps).

The journal cancellation scenario is further fueled by those few libraries that decide on an "all electronic" model. These libraries establish serial collection plans that call for the cancellation of as many print titles as possible. Although the potential savings in subscriptions, subscription service fees and serial processing costs may be tempting, there are cascading consequences to these actions to be considered. Whatever these libraries hope to save in the short run may be lost in the long run, as publishers and aggregators combine to break this model with higher database licensing fees and embargoes in their efforts to recoup lost revenue.

Database aggregators might be encouraged to reconsider their thinking about exclusivity deals. While database aggregators shouldn't be expected to offer all the same titles -- after all, the traditional database systems such as Dialog and Lexis-Nexis made the offering of unique databases part of their competition for customers -- no real damage will result from all aggregators having the rights to certain significant titles within disciplines. Using the HBR example, a business database just isn't the same without the full text of this journal. Let the aggregators offer unique titles that are more esoteric, with appeal to libraries supporting specific disciplines and sub-specialties, and then base their uniqueness and attractiveness to customers on the quality of their content and search interface. Publishers can no doubt obtain the same revenue from two or three different aggregators as they can from one.

Where does the movement toward making sense out of the new publisher-aggregator exclusivity/embargo model begin? My reporter colleague's articles did eventually appear in the in the Library Journal's Academic Newswire, which brought the issues to a larger audience. Still, no real answers were identified.

At a recent library conference, I spoke one-on-one with executives representing the major database aggregators. As expected, all had strong reactions to the Albanese articles, and the tendency was for each aggregator to insist his or her firm was in the right while the others were in the wrong. Nevertheless, I was encouraged that everyone with whom I spoke offered to begin a dialogue about both exclusivity and embargo deals.

I would like to see representatives from the database aggregators, journal publishers and librarians come together in a forum to discuss these issues in the hope of making sense out of what is happening, as well as determine how we might change this path on which we find ourselves. Such a forum could occur at any of several major annual library conferences. To further that goal, I would like to hear from other librarians who are concerned about these issues and who would also be interested in seeing a publisher-aggregator-librarian forum come to fruition. A scary new digital divide looms in the future, and we must act now to make sure it is prevented.

Copyright 2001 Steven J. Bell

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DOI: 10.1045/july2001-bell