Posts Tagged ‘publisher’

A New Market Opportunity

Tuesday, November 3rd, 2009

There is a new opportunity opening up for the publishers of research material, and that is in reaching interested users and customers who do not have an affiliation with an academic institution.  At this time, when academic libraries are cutting budgets for materials, this new opportunity presents a good offset to difficult economic times, and for many publishers, a bona fide growth initiative.  This opportunity is entirely a creature of Web technology, for without the low-cost transactions enabled by digital tools and the Internet in particular, seeking out individual users would simply be too expensive.

Since the launch of our rental service for research articles on October 27, DeepDyve has been well covered by the press. Our offering, which allows users to “rent” (view-only) the full-text of a premium article for $0.99, has generated strong and mixed reactions among both subscription-based publishers and open access publishers – a rare feat which suggests that perhaps we’re doing something meaningful.  In leading up to our launch, DeepDyve met with many in the publishing community and presented the below analysis to make the case for this new opportunity:

Who is the DeepDyve audience?  DeepDyve is targeting the non-institutional “knowledge worker”.  Based on the 2006 U.S. Census Bureau report, DeepDyve estimates there are approximately 50 million knowledge workers in the U.S.  According to a 2007 IDC report, over 70% of these knowledge workers turn to the web first to conduct research and in turn spend approximately 25 hours per month gathering information for both personal and professional projects.  Of these 50MM knowledge workers, there are approximately 10-15MM institutional readers (Mabe MA (2009): Scholarly Publishing. European Review 17(1): 3-22), or put another way, there are 35-40MM non-institutional knowledge workers.

Geoff Bilder of CrossRef helps make the case for the potential in addressing this new audience by noting the number of users to publisher sites who are NOT recognized as either a subscriber or prior customer to any of the journals found there.  In talking with our publishers, we have found pretty much the same thing.  I often begin by asking them, “what is the annual traffic to your site”.  The majority of publishers do not know, although they can tell me immediately the number of downloads.  When they provide me with this traffic information, I also ask that they estimate the number of visitors that are non-institutional visitors, a subset of their non-subscriber traffic.  The numbers have ranged from 30% to 65%, meaning that a significant portion of the traffic to any publisher’s site is non-institutional users.  Now these figures are estimates provided to DeepDyve, but our partners generally agree that the figures are reasonable for the purposes of quantitative modeling.  Lastly we ask if the publisher will share with us the size of their pay-per-view (PPV) business and their average article price.  Here is our analysis for a sample publisher:
•    Traffic per year:  40MM visitors
•    % of traffic that is non-institutional:  50%
•    Non-institutional traffic per year:  20MM
•    PPV sales per year:  $1MM
•    Average article price:  $25
•    # PPV transactions:  40,000
•    PPV conversion rate of non-institutional traffic:  0.2%  (40,000 transactions / 20MM visitors)

DeepDyve’s  new rental service allows users to rent articles a la carte ($0.99), or via a monthly plan ($9.99 and $19.99).  To calculate a total addressable market, there are several approaches which may lead to a reasonable range.  Assuming there are 40MM non-institutional knowledge workers:
•    If they rent 1 article per month, the total addressable market = $480M
•    If they sign up for a monthly plan of $20/mo., the total addressable market = $9.6B

Undoubtedly some users will rent a la carte, others will sign up for the plan, and still others will do nothing.  In quantifying new, adjacent markets such as this, a rule of thumb in business forecasting is to start with the existing ‘core’ market and assume the new market is 25-50% the size of the original.  In this case, the International Association of Scientific, Technical, and Medical Publishers recent report (”The STM Report:  An overview of scientific and scholarly journal publishing”) estimates that annual revenues generated from English-language STM journal publishing were $8 billion in 2008. Thus the size of the non-institutional market is approximately $2-4 billion dollars.

With a conversion rate of just 0.2%, it’s fair to say that this potential $2+B non-institutional market is quite literally untapped.  Why?  According to a recent report from the Publishing Research Consortium, for small-medium enterprise users (many of whom are non-institutional), PPV has several shortcomings:
•     “perceived high prices, compounded by the need to review the full text of irrelevant articles in order to identify relevant ones”
•    “uninformative or misleading abstracts requiring users to purchase blind”

This feedback relates to the experiences at the publishers’ site and does not include the challenges users face in finding this information on the web in the first place.  For example, users who go first to PubMed or Google, must then go back and forth to each publisher site, each of which has different, often complex interfaces, requiring different search techniques and different e-commerce processes.  It is an environment that is friction-heavy and requires many clicks, giving users multiple opportunities to abandon their transaction.

Finally, what does this mean for the Publisher who is likely to ask, “Won’t this cannibalize my PPV”?  Using the sample metrics above, imagine placing a DeepDyve rental link alongside the PPV link on the publisher’s site.  Knowing that users likely come to the site via a Google search and are therefore qualified and motivated, we can assume that 4% of these 20MM visitors will rent the article.  That would equate to $800,000 of rental sales which DeepDyve would split with the publisher.  In DeepDyve’s focus groups, respondents viewed the rental option as a way to ‘sample’ an article, or as Marydee Ojala describes it, as a “rent to own” option which is in-line with the PRC report above that users are unwilling to purchase based solely on an abstract.  If say 5% of these renters later owned, i.e. 5% of the aforementioned 4%, then 0.2% would conduct a PPV transaction, possibly doubling the publisher’s current PPV sales or at the very least, offsetting any possible cannibalization.

That being said, we do not believe rental will cannibalize PPV sales.  Of course, in some respects, with a 0.2% conversion rate, cannibalization, or more accurately ‘piracy’, is already afoot as users “borrow” PDF’s from colleagues or request a free copy directly from the author.  As iTunes has proven, $0.99 is a price which makes it morally convenient for users to purchase, not pirate, due to the affordability to impulsively sample and discover material.  And “borrowing” takes time, something in short supply for the typical knowledge worker.  iTunes has combined the $0.99 point with a simple one-stop shopping experience that no single publisher can easily replicate.  Finally, those 0.2% users who are purchasing articles for $25 are clearly very motivated and in our estimation will very likely buy the article anyway, even in the face of a rental option.

In summary, we believe there is a significant, new market opportunity that is literally beating a path to the publisher’s sites, but leaving empty-handed.  We believe that publishers have optimized their sites to serve their core institutional audience who is comfortable with their sophisticated interfaces, but consequently have overlooked non-institutional users who’s requirements (affordability; ease of use; one-stop-shopping; full text read-only) are beyond the scope of any single publisher.  We believe this non-institutional user base is an attractive, untapped audience that has considerable growth potential in an otherwise challenging economy.  The size of this market, how quickly it grows, the affects it has – either positively or adversely – on a publisher’s other businesses –-we really can’t know all the answers to these questions until the service is live in the marketplace and studied.  But what we can be certain of is this opportunity will most definitely not materialize if we wait to have all the answers. In that case, I again refer to Geoff Bilder’s ominous iPub analogy where we run the risk that a less-than-friendly outsider emerges and “turns the industry upside down”.

New publishers partners

Tuesday, August 18th, 2009

DeepDyve is pleased to announce that the following publishers are now available for searching and discovery:

  • American Physiological Society
    With over 10,500 members, APS is devoted to fostering education, scientific research, and dissemination of information in the physiological sciences.  The APS produces 14 journals for its members who have doctoral degrees in physiology and/or medicine (or other health professions).
  • American Society for Microbiology
    ASM journals are the most prominent publications in the field, delivering up-to-date and authoritative coverage of both basic and clinical microbiology. Highly cited and well regarded, ASM’s 11 journals represent over 40% of all citations in Microbiology, according to ISI Journal Citation Reports.
  • FASEB (Federation of American Societies for Experimental Biology) FASEB advances health and welfare by promoting progress and education in biological and biomedical sciences through service to its member societies and collaborative advocacy.  The FASEB Journal ranks among the top biology journals worldwide (according to Thomson Scientific’s 2007 Journal Citation Reports). This monthly journal publishes peer-reviewed, multidisciplinary original research articles as well as editorials, reviews, and news of the life sciences.  FASEB also publishes the Journal of Leukocyte Biology.
  • Genetics Society of America
    Genetics Society of America (GSA) members are researchers, scientists, teachers, engineers, breeders, and geneticists in training. The purposes of the Society are 1) to facilitate communication between geneticists, 2) to promote research that will bring new discoveries in genetics, 3) to foster the training of the next generation of geneticists so they can effectively respond to the opportunities provided by our discoveries and the challenges posed by them, and 4) to educate the public and their government representatives about advances in genetics and the consequences to individuals and to society. The GSA endeavors to be the collective voice of its members on subjects where a deep knowledge of genetics and biological science is critically important.
  • Health Affairs
    Health Affairs is the leading journal of health policy thought and research. The peer-reviewed journal was founded in 1981 under the aegis of Project HOPE, a nonprofit international health education organization. Health Affairs explores health policy issues of current concern in both domestic and international spheres.
  • Hindawi Press
    Hindawi Press is a rapidly growing academic publisher with more than one hundred journals in science, technology, and medicine. All articles published in Hindawi journals are open access and distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
  • Information Sources, Inc. (TecTrends)
    TecTrends is a premier guide to the ever-changing world of intelligent technology. TecTrends combines detailed company information with thousands of abstracts of independent, third-party reviews and analyses across the full spectrum of technology, including coverage of computers and information technology, the Internet, biotechnology, nanotechnology, consumer electronics, and wireless technologies.
  • MIT Press
    Beginning in 1926, MIT Press is the only university press in the United States whose list is based in science and technology. MIT Press publishes about 200 new books a year and over 40 journals.
  • Springer Science+Business Media:  Springer Protocols
    Springer Protocols is the largest subscription-based electronic database of reproducible laboratory protocols in the Life and Biomedical Sciences.  Comprised of protocols from Humana’s successful books and handbooks on methods in molecular biology, Springer Protocols are published by the world’s second-largest publisher of journals in the STM (Science, Technology, Medicine) sector, the largest publisher of STM books, and the largest business-to-business publisher in the German-language area.

With these new partners, DeepDyve now makes discoverable in its search engine over 32 million documents, both premium and free (open access).

DeepDyve Launches Publisher Tools

Wednesday, April 29th, 2009

Yesterday we announced several exciting new tools and products for the Publishing industry. As you know, we work closely with many publishers to make their expert content discoverable in our search engine. With the release of these tools, DeepDyve will now enable publishers to leverage the DeepDyve technology on their own sites. These tools are specifically designed for publishers whose content is already in the DeepDyve index and who want to bring custom search results (i.e. just their articles) to visitors on their site:
•    Publisher Landing Pages — Publishers can leverage DeepDyve’s technology to drive more traffic to their sites. DeepDyve will dynamically build landing pages for EVERY article in the collection. Each landing page is information rich with related article links and is optimized to be more easily found in the major search engines.

•    Search API — DeepDyve’s search technology can easily be added to a publisher’s site to make their content more findable. Through a web services Application Protocol Interface (API), simply ‘cut and paste’ the API code and allow DeepDyve to power the search.
•    More Like This Document API — This tool allows websites to directly interface with the DeepDyve database to search for articles that are related to any designated document within our index. The user simply clicks a MLT link or button and DeepDyve will return related article results using the designated document as the query (alternatively, the results can be streamed in automatically).
•    Content Highlight Widget — The Highlight Widget allows users at the publisher’s site to highlight any block of text up to 5,000 characters, then simply run that selection as a query.

“We are looking forward to DeepDyve powering the search on PLoS.org,” said Peter Jerram, CEO of The Public Library of Science.  “DeepDyve’s cutting-edge technology and ability to use entire sentences as a query will make it much easier for our users to find and discover new original research in science and medicine.”

Each of these tools is available for free with advertising revenue sharing, or for a fee which varies depending on volume. To learn more, please visit the Publisher section of our website.   You can also click here to read the entire press release.

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About The Public Library of Science

The Public Library of Science (www.plos.org) is a nonprofit organization committed to making the world’s scientific and medical literature a freely available public resource. Its goals are to:
•    Open the doors to the world’s library of scientific knowledge by giving any scientist, physician, patient or student - anywhere in the world - unlimited access to the latest scientific research.
•    Facilitate research, informed medical practice and education by making it possible to freely search the full text of every published article to locate specific ideas, methods, experimental results and observations.
•    Enable scientists, librarians, publishers and entrepreneurs to develop innovative ways to explore and use the world’s treasury of scientific ideas and discoveries