READI

(Rights for Electronic Access to and Delivery of Information)

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METHODS OF USE

Definition

A contract element that identifies the way in which access to information by institutions and their end-users is measured and paid for--whether paid to the intermediary or original information supplier.

Discussion

While there are no universally accepted measures (and consequently payment schedules) in the industry, our research revealed several fairly common practices. Among these are:

1. Subscription-based. A subscription to a networked information service allows institutions and their end-users to access as much or as little as they wish for as long as they wish, for a set fee--either on an annual or some other basis (print and CD-ROM subscriptions, for example). In certain subscription arrangements, the concept of simultaneous users may be introduced which restricts access to a limited number of end-users who may access the information at one time (see other discussions of simultaneous users in "Defining the User").

2. Per-transaction. Some agreements call for end-users to pay either on their own or from an institutional account on a per-transaction basis. In the most liberal of such agreements, a so-called "search" is identified as any information that is generated following the hit of an <enter> key. Either the institution or end-user is responsible for paying on the basis of what is generated from access. Such a search may generate considerable or little information, depending upon the size and nature of the database.

   In less liberal per-transaction agreements, so-called "hits" or "finds" may be the basis on which information is measured and paid for. Such "hits" or "finds" may be based upon any number of elements as defined by the provider. Some examples include: by the number of individuals who have access, terminals, users, text lines, characters, titles, abstracts, figures, pictures, article, time (per minute or hour), downloads, number of times the database is accessed, etc.

3. Block-searching. Some institutions combine elements of subscription and per-transaction services into what is termed "block-searching." Here an institution purchases a number of searches (or time, depending upon the model). Searches are still performed on a per-use basis, but charges are deducted from the "block" purchased by the institution (namely at a reduced rate from individual search charges). When use of the block is finished, another block may be purchased by the institution.

4. Time-based. Some agreements call for institutions or end-users to pay for access time by the minute/hour/day, etc. When employing this model, time-based payments are often made in addition to other charges incurred while using the system. (Dialog, for example, has varying charges for access to its resources.) The cable television model, with general access for a fee, plus separate charges for "premium" channels, is similar to this approach.

5. Volume Discount Pricing. Certain large institutions, with vast numbers of end-users, may be in the position to receive discounts from suppliers for unusually large volumes of access to databases.

6. Other Approaches/Methods. Certain other agreements may call for institutions and their end-users to measure and pay for information using a variety of combinations of the above methods--time plus per-search access, or number of hits plus time-based billing, for example.

Benefits

Our research revealed that most institutions, as well as many suppliers, are most comfortable with subscription-based pricing, since the institution need never again be concerned with measuring how many individuals actually access the data or how many transactions are completed. Certain publishers are equally comfortable with this system since it provides them with guaranteed income for access to their databases, no matter how much or how little it is used.

Other buyers prefer per-transaction use--especially smaller institutions that usually cannot afford conventionally expensive subscription-based pricing. It allows access to a greater number of online resources--especially seldom-used sources, not economical on a subscription basis.

Similar benefits can be expected from block-searching since institutions can gauge their expenditures up to a point and only later extend their investments into information access as required. Obviously, institutions with the greatest demand for networked resources can benefit greatly from negotiating discounts with suppliers for large-volume use. The emergence of consortia has made it possible for even greater institutional negotiating strength and buying power with providers and has enabled many to secure discounts or to subscribe to large numbers of databases free of burdensome transaction fees.

Risks

In subscription-based models, one danger is that without monitoring use, institutions may subscribe to information that is accessed infrequently. On the other hand, per-transaction payment opens the institution to unexpectedly large expenditures when end-users enter the system without knowledge or personal responsibility for payment. This is also true for time-based systems. Participants encouraged institutions to be alert to providing as much as possible to their clients, without restricting use because of expenses involved in time-based or transaction-based systems.

In non-institutional settings, however, where access to information is paid directly by individuals, rather than by their supporting organizations, time-based and transaction-based systems appear to be the norm. Individuals often have more control over their personal budgets than institutions under such plans.

Panelists identified certain risks to information purveyors in providing transaction-based models, rather than bulk or subscription approaches. The risk is that few users will be willing to access their database and without a significant volume of access, the economic viability of the database may be in jeopardy. Database providers may also encounter further obstacles, especially with billing systems for end-users. Such systems usually require complex interactions with telephone, cable, banking and other-third parties with which publishers traditionally have little experience.

Subscription-based billing services tend to have fewer (but more sophisticated) customers who pay greater amounts for access. As services drift towards transaction-based and time-based approaches, customers emerge as a "mass market" with each one being charged little, compared with subscriptions paid for by larger institutions. The amount of accounting and infrastructure needed to manage individual transactions is far more complex than is common with traditional methods of publishing information.

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Any comments, or feedback?		Last Update:   Wednesday, 03 July, 2002 - 04:22 PM - EDT