From: Tony Sanfilippo <[log in to unmask]>
Date: Wed, 28 May 2014 15:36:58 -0400

Hello, I've responded to the letter on the Chronicle site, but I'll
post my response here, saving you the need to click.

Thanks,
Tony Sanfilippo
Penn State Press

*******

"Wasn't the Short Term Loan model supposed to be an alternative to
Interlibrary Loans? If that's not the case, and it's actually an
alternative to collection development, then publishers are only
discovering this now because an alternative to ILL was how it was
presented to us. There are really only two ways for a publisher
required (in my case, by our library) to meet expenses with sales
revenue to respond to its use as an alternative to collection
development. They can either remove their books from all PDA/STL
platforms, or they can replace the lost income by increasing the price
of the loan. This isn't price gouging, this is a survival strategy.
Here are some of the reasons why university presses are beginning to
either opt of PDA/STL or are raising their prices:

1) The EBL STL model is unchanged from its original incarnation. As a
critical mass of libraries have made use of it, it is entirely
reasonable and expected that adjustments would be needed.

2) STL was sold to publishers as an alternative to ILL and to make
additional content not previously available to patrons (owing to
financial constraints) discoverable and potentially available in an
instant. It was not understood as a tool to be used *instead of*
purchase. There's nothing wrong with rental, but the financial model
must be sustainable for publishers as well as libraries. The expected
use and actual use of PDA/STL do not match.

3) This is not "price gouging" or "maximizing profits". University
presses are seeing year over year declines of about 15% in the library
market and similar declines in the textbook market. This is
unsustainable.

4) Libraries have never been able to make so much content available
for such a low cost. Publishers have never made so much content
available at such a great loss. Even at higher rates, content costs
far less than ever before. Maybe if they paid a subscription for
access to all that content, and then paid for ownership using
sustainable triggers, price increases on the model wouldn't be
necessary.

5) Consortial PDA models in particular have been difficult for
publishers as evidenced in the data for Novanet
(http://www.novanet.ns.ca/novan... and VIVA (described in the latest
issue of Against the Grain, p 63). If the model cannot be fixed,
publishers may choose not to participate.

If PDA/STL models are actually replacements for the library and
textbook markets, which from my perspective as a university press
marketing person they are becoming, and the cost of creating the
content isn't decreasing, then it is simply the market behaving as
expected to a significant disruption. But, hey, thanks for assuming
the worst of us."

http://chronicle.com/blogs/letters/ebook-pricing-hikes-amount-to-price-gouging/#comment-1408811314