Exclusivity deal does disservice

June 11th, 2010 by Jack Styczynski

In case you hadn’t noticed, the Time Inc. publications—including People, Sports Illustrated and Time—recently disappeared from your Nexis and Factiva accounts.  This stems from an exclusivity contract Time Inc. inked with EBSCO earlier this year.  While the research community hoped the deal might still allow other aggregators to continue providing access to the publications, so far, no luck.  Apparently, EBSCO will soon be the only fee-based aggregator with the archives.  (According to Library Journal, Gale retains them through 2010.)  Nexis Senior Director of Licensing Dave Oakley hasn’t given up hope things will change, but it doesn’t look promising.

“We’ve left the door wide open, though at the moment talks are not continuing with EBSCO,” Oakley said last week in an e-mail exchange. “Given my understanding of the exclusive arrangement, any after-market licensing has to run through EBSCO.”

The true irony is that at least two research departments within the Time Inc. empire—and likely more—don’t subscribe to EBSCO.  That’s not to suggest those departments don’t have access to their own backfiles.  They do, through an internal database.  But what it does say is that Time Inc. seems to have no problem forcing everyone else to access its archives through an aggregator the company’s own researchers don’t consider worth a subscription—Nexis and Factiva users be damned.

An informal sampling of researcher reactions has ranged from puzzlement to disgust to simply viewing the move as “a joke,” with more anger directed at Time than EBSCO.  While they don’t like it, researchers understand how EBSCO benefits from exclusivity—it gives the company a leg up on its competition—but none can fathom why a popular publisher like Time would want to trade multiple providers for a single one.  Could one possibly pay more than all of them combined?  Or is it as Gale claims: that Time was really seeking an exclusive distribution partner to ease its administrative burden rather than an exclusive provider that would shut out others, thereby shifting more of the blame for this predicament to EBSCO?  Keep in mind, this is not a case like the Wall Street Journal where a publication and its exclusive provider (Factiva) are part of the same corporate entity.  Time has no reason to give EBSCO special consideration over any other provider.

Oakley has a theory why Time might want a single contract, even if the revenue merely matches that of multiple non-exclusive deals.

“Assuming the move is revenue neutral, you’ve lowered your cost base by only having to deal with one vendor, so there could easily be an overall benefit to Time,” he said, adding plausibility to Gale’s claim regarding the publisher’s desire to ease its administrative burden.

Anyway, Time appears disinclined to provide explanations.  In January, Library Journal confirmed Time was the party that pursued an exclusivity contract—which you would think makes it less likely EBSCO made a huge offer for exclusivity, and more likely that it simply made an acceptable one—but LJ couldn’t extract much else from the company.  More recently, a Time spokesperson refused comment on the company’s decision, and the fact that at least some of its research departments don’t subscribe to EBSCO.  (Dear J-school family, is it not a trip when a news media company refuses comment?)  In fairness, it should be noted that the archives of People, Sports Illustrated and Time remain freely available on those magazines’ individual web sites—at least for now—although searching publication by publication is nowhere near as convenient as searching an aggregator.  Nonetheless, you would think the free web access is another reason EBSCO probably didn’t go overboard with an exclusivity offer.  According to Library Journal, ProQuest only pursued a non-exclusive agreement at least in part because of the free web access.  Similarly, Gale published an open letter stating it placed language in its bid that would have allowed all information providers to retain the Time Inc. titles in their products, although the free web access was not given as a reason.

Oakley addressed the free web access issue, as it pertains to bidding on exclusivity.  “While the Time brand is a powerful one and an exclusive gives marketing prowess, it’s pretty hard to monetize when all the content is free on the open web.  That greatly limits the value of this particular exclusive,” he opined. 

“My very personal opinion in this case is that EBSCO has overvalued the exclusive and will have a hard time monetizing.”

EBSCO Senior Vice President Sam Brooks called Oakley’s statement “misleading,” at least in part.  “Anyone who does their own analysis will see that some of the important titles (e.g., Fortune) do not have ‘all the content free on the open web,’” he countered. “In addition, I think most information professionals realize the value of aggregation or there would be no controversy here.”

Brooks also responded to Gale’s open letter shortly after it was published.  EBSCO and Gale compete for many of the same customers and obviously have a contentious relationship.  But frankly, EBSCO comes up on the short end of the PR battle if it’s not sublicensing high-demand content that it could, no matter how much (or little) other vendors may offer EBSCO for rights to that content, how they run their businesses, or how many times Brooks assures customers his company’s products are “affordable.”  Look at it this way: if cable TV companies started locking up popular networks with exclusive contracts, would you care how affordable their plans were?  Or would you be upset that you now had to pay multiple cable bills each month to get all your favorite channels?

Getting back to the research perspective, it’s understood that no aggregator is going to provide access to every source.  EBSCO is a more academically-oriented aggregator, with lots of journals and trade publications.  Nexis and Factiva are more commercially-oriented, heavy on newspapers and TV network news transcripts.  With consumer magazines being sort of a hybrid between a journal and a newspaper, it’s easy to see them being grouped with either type of aggregator.  Thus, exclusivity deals for popular magazines will naturally be more controversial.  They have value to all aggregators and their users.

If you’re looking for a silver lining in this cloud, there is one.  According to Brooks, by 2011 EBSCO will expand the backfiles of several Time Inc. titles in its MasterFILE product beyond what has been offered by aggregators in the past, at no additional charge.  For example, Time will be available back to its first issue in 1923.  Likewise for Sports Illustrated back to 1954 and People back to 1974.  In sharing this news for the first time, Brooks said EBSCO is also likely to offer an upgrade module for Business Source customers that will include expanded backfiles for the Time Inc. business titles, Fortune and Money. However, the archives for all these titles will be text-only rather than in their original format via PDF, as EBSCO provides for some publications.

After reading all this, you might think, what’s the big deal?  Here at the J-school, we have access to Nexis, Factiva, EBSCO, Gale, ProQuest and more.  While that’s true, it doesn’t take into account that exclusivity deals require users to spend more time searching multiple databases to cast the widest possible net, more brain power mastering different search interfaces and terminology, and more money on multiple subscriptions.  Aggregators should be competing on things like added value (e.g. expanded backfiles), ease of use and cost, not fostering monopolies on the archives of popular publications.

It’s a disservice to the research community.

3 Responses to “Exclusivity deal does disservice”

  1. Steve Strasser Says:

    Don’t these guys know that information wants to be free??

  2. Kerry Prendergast Says:

    Jack, very well said. Publishers who give exclusivity to aggregators will get it where it hurts, in the pocketbook. On the few instances where I would need Time, Fortune or People, I would certainly not feel the need to subscribe to an expensive database like EBSCO’s. So I’ll do without, which means Time doesn’t get the revenue it might have if its publications were available on some of the databases I do subscribe to.
    I’m sure your students will understand the ramifications of this move as far as the ease of accessing information goes.

  3. Liz Pressman Says:

    What’s an aggregator? Just kidding. I don’t mind searching “People” separately on the web and “People” is the main publication I’d be searching – as one might imagine. Publications always seem to be dropping off and coming back on to Nexis. Didn’t the NY Observer drop off for awhile? I know, I know, that’s just one, local publication. Anyhow, regardless,I’m puzzled by Time Inc.’s move.