Challenges of Buying and Selling Content in 2011: A Report by Valerie Ryder
It was standing room only at the Tuesday, June 14th session sponsored by the Leadership and Management Division, Content Buying Section at the SLA 2011 Conference that highlighted “Challenges of Buying and Selling Content in 2011”. A panel of buyers and sellers discussed issues facing both sides of the content acquisition process in a debate style presentation that was skillfully moderated and involved the audience in the lively dialogue.
Topics and discussion ranged over a variety of “hot spots” in the content landscape.
One solution was to establish a three-way license agreement among the content provider, the content buying organization and the outsourcing firm or consultant. Another solution was to ensure that the contract with the outsourcing firm included actions and penalties to cover violations by the outsourcing staff. Another issue that surfaced was the requirement to ensure that the outsourcing firm purged all data that was obtained from content providers when an outsourcing contract ended. A related issue was to require precautions to be taken by the outsourcing firm to ensure that data obtained from content providers was used only on projects performed for the content buying organization. Concerns were expressed that some offshore outsourcing contractors state that they can provide equivalent content, often at much lower prices, to replace the licensed content required for projects. Content buyers as well as content providers expressed the need to ensure that the equivalent content was indeed equal to the licensed content and to determine that the source for the equivalent content was legitimate. Some content buyers require that the outsourcing firm provide them with copies of their contracts with the content providers as proof of the content that will be used on their projects.
Vendor enhancements to their products
Content buyers took issue with the practice of added features resulting in additional cost for the product, especially when they were not involved in requesting or prioritizing the new features. Content providers often request direct access to end-users to give them a better view of what users need. Content providers lamented the decrease in interactions with end-users over time. They expressed the concern that product development often misses the mark when intermediaries interpret end-user needs on features needed because they are too remote from the end-users. Content buyers countered with the viewpoint that end-users always like new features without considering the value of the new feature or the increased price. Panelists debated the question of who pays for the new features – the buyers or the sellers, as a cost of staying competitive in the marketplace. The example was given that executives are high on using their iPads but does the vendor add the cost of an iPad app to an existing contract for content? A balance must be reached between vendors wanting end-users to critique new features during development with a content buying organization’s requirement to control access to end-users by vendors. Both sides of the debate agreed that effective product development involving end-users must be based on mutual trust and respect between buyers and sellers.
Content buyers expressed the need to keep price increases within certain percentage range to abide by their budget constraints. Content providers countered with the viewpoint that market demand dictates price increases. Some content buyers are willing to consider price increases if there is more transparency in the factors used to determine the price increase. One content provider expressed the opinion that conversations about price increases took place during the Great Recession that would never have occurred in the past. Some content buyers suggested the approach that content providers keep their prices flat to enable content buyers to be able to renew their contracts because if they drop the content then they learn to do without that content and will not re-subscribe when budgets are increased. Some content providers expressed their need to make up for past years of flat pricing in their revenue stream. The discussion around usage-based pricing elicited the analogy of the “crack model” – get them hooked and then raise the price.
Practices of certain content providers not to provide usage data were soundly criticized by content buyers. Some content buyers include clauses in their contracts that require the provision of usage data and specify the level of data detail. Content sellers promoted the view that buyers need to consider the value of the content used, not just the volume of usage. Content providers also use data to determine which content to keep or discontinue so they track usage at the data element level.
Decision-making in the buying process
Content sellers lamented the change that has occurred in the last 4 – 8 years where the decision-making has shifted from the information professional to the purchasing, legal or market data group in an organization. This shift has introduced a lack of transparency in the negotiations process as a group of people make the decision rather than one person. Content sellers feel that this shift has driven up their costs in the selling process. Part of their dilemma is that the sourcing person does not know their product nor its value to the content buying organization. Content sellers must find a champion within organization because end-users can influence a decision but not make the buying commitment.
The moderated debate format ensured that many viewpoints were expressed, discussion was lively and appropriate amount of time was spent on each of the topics.
Valerie Ryder, Director of Information Strategy
Wolper Subscription Services