We started offering Institutional, or Site Licenses a year ago. This was not a part of our original business model, but the Exact Editions founders know that market from previous experience. We have, even so, been surprised at the strength of interest for consumer magazines. To judge by the range of libraries subscribing to our services (government departments, international organisations and schools as well as universities) there is a large global market for subscriber content delivered via IP to private networks. It is a ‘rule of thumb’ in STM publishing that there are 2/3,000 universities world wide that constitute the market for periodical literature. The market for digital books and consumer magazines in libraries world wide is potentially two or three orders of magnitude higher (think schools and public libraries).

There is a large market, but there must be real pressure on the budgets to acquire information. At the high end, STM academic databases are very, very expensive (individual universities are often spending millions on their scientific periodical budgets). It seems likely that new entrants in the books and digital magazines space will thrive if they keep their prices down (by which I mean significantly less than $1,000 per title, per institution). Digital books may need to be priced in the region of $100 pa, per site, if they are to achieve widespread adoption.

Perhaps much lower? When Google Book Search starts selling its massive archive of mainly ‘out of print but in copyright’ books it will be fascinating to see how that is priced. On a per title basis the collection will need to be priced at much less than $1 a title if individual universities and colleges are to subscribe for access (there are already 7 million titles in the aggregate).

It is at least possible that the advent of the Google system will lead to a two-tier market. A huge pile of mainly little-used books in the Google mass, and slivers of high value and highly current content which will be marketed and promoted direct by the publishers, or perhaps by Google in a ‘premium stream’. That will pose problems of channel contention and regulation. It may not be too long before authors, publishers and even Google are saying that books in the ‘slush pile’ should be free. One suspects that this is what Google may have wanted as an outcome from the beginning.

PS ‘Slush pile’ is here merely a technical term. Slush piles contain many books of outstanding quality. The Google collection will be very valuable and useful, though, of course, with plenty of rubbish in it!