CRKN Offer 2014

This page is addressed to CEL publishers interested in offering discounts to libraries to incentivize purchase of perpetual access licenses.

The proposal:

Under the Publisher License Agreement, CEL is bound to sell perpetual access licenses at the list price established by publishers. We cannot deviate from this price without specific publisher permission.

In order to stimulate license sales, CEL will promote discount offers from publishers willing to provide them. For the duration of the offer, we will apply a sliding scale discount to any Perpetual Access purchase in made in 2014. The discount will be calculated by the percentage of a publisher's available catalogue purchased by a library. The base discount, running from a minimum of 5% for one title purchased to a maximum of 20% for “all” titles purchased, will be taken from the CEL revenue share, which is 30%.

We are asking publishers to supplement that discount by allowing an additional percentage to come from their revenue shares.

Publisher participation is optional. If you do not choose to participate, you will continue to receive 70% of list price for all sales. If you choose to participate, the amount of the discount you allow will be added to the base discount, and your revenue share will correspondingly fall. (Although because purchase volume determines discount, absolute revenue will rise.)

For example

 

Allows discount

Library receives minimum

Library receives maximum

Publisher revenue share

Publisher A

0%

5%

20%

70%

Publisher B

10%

5%

30%

70% > 60%

Publisher C

15%

5%

35%

70% > 55%

Publisher D

20%

5%

40%

70% > 50%

All calculations (catalogue value) are based on SUPO pricing. But if a MUPO license is allowed (and purchased) the discount will apply on the larger amount (which is 150% of list price.)

We believe that the incentive of a discount is a vital component in library purchasing. Because there is no requirement for group purchasing, individual libraries can earn discounts without looking to other group members. This will simplify administration and stimulate purchasing.

There is strong revenue potential here. Very few of the 70 CRKN member libraries have purchased new titles since 2008. And there is about the same level of list price value in the combined publisher catalogue now as there was in 2008. These are sample returns from a purchase by all CRKN members:

 

 If

 If

Publisher Return if

 

Catalogue value =

Allows discount of

20% of catalogue purchased

50% of catalogue purchased

100% of catalogue purchased

Publisher A

$1,000

0%

$10,500

$26,250

$52,500

Publisher B

$5,000

10%

$51,000

$121,875

$225,000

Publisher C

$10,000

15%

$100,500

$234,375

$412,500

Publisher D

$15,000

20%

$147,045

$335,227

$562,500

Here’s the process for publishers:

  • In the rights panel of your publisher dashboard we will provide the tools to indicate the incentive discount allowed, and to mark titles to be excluded from the offer.
  • You may continue to add titles to CEL/desLibris during the year. Total catalogue value for purposes of discount calculation will be done on June 30, 2014.
  • The deadline for publishers to indicate participation is March 31, 2014.

Here is an example of the results using the assumptions of a catalogue value of $5,000 and a discount of 10%: