NFAIS 45th Annual Conference
By Stephanie C. Ardito
"Markets, Technologies and Standards: Strategies for Success" wasthe theme
of the NFAIS 45th Annual Conference, held Feb. 23—25 in Philadelphia.
Attended primarily by aggregators, the event is a major opportunity for providers
to voice and share their concerns about the day-to-day operations of their
businessesand to speculate about the future ofthe industry.
Were the Dot-Coms?
With my objective reporting completed, I do have some personal observations.
The dot-coms were noticeably lacking, on the program and in the audience.
Where were Google, Amazon.com, and eBay? To me, they seem to be primary
candidates for NFAIS membership.
For too long, the "traditional" aggregators (sorry Ron Dunn!) have
been in a reaction mode. Not so long ago, I remember conferences at
which Elsevier speakers said the company would never give up the print
journal or offer transaction-based electronic articles over the Internet.
Even though Elsevier continues to voice its harsh disregard for the
value of document suppliers and sneers at the popularity of Google,
hasn't the company indeed reacted to innovation brought about by Web-based
services? I think it's ironic that Elsevier is now patting itself on
the back for taking a leadership role in changing information models!
The put-down of Google and the constant references to "Google-ization" bothered
me terribly. Let's hope next year's conference will afford an opportunity
for Google's leadership to respond to NFAIS's condemnation.
As an information business owner, I may seem a strange choice to report on
this meeting. However, myassociation with NFAIS goes back more than 20 years.
For 10 years, my connection with the organization was a direct result of being
an ISI employee. Bonnie Lawlor, hired last November as NFAIS's executive director,encouraged
my participation in the group. The annual meeting especially is an excellent
source for information on a wide variety of databases. The conference also
allows me to stay current on the pricing, marketing, and legal challenges faced
by this organization.
Since I've been on both sides of the industryworking for a database
producer and then operating as a searchermy scrutiny of NFAIS has changed
over the years. While I understand and sympathize with the issues confronted
by NFAIS members, at the same time I can't help but feel adversarial about
the hurdles I contend with when accessing members' databases. It is with this
dichotomy of viewpoints that I report on the conference.
After a warm welcome from Access Innovations' (and incoming NFAIS president)
Marjorie Hlava, speakers from the American Institute of Physics, Library of
Congress, and American Theological Library Association stressed the significance
of standards to the publishing industry. While there may be too many standards,
without such an infrastructure, online hosting would not work.
De facto standards important to publishers are the Digital Object Identifier
(DOI) and CrossRef. Forthcoming standards include the replacement of HTML with
XML, Standards for Scientific and Technical Information Exchange (STIX) fonts
(to be completed in the first quarter of 2004), and standards for the interchange
of headers and full text.
Two key library standards that need development are bibliographic data sharing
and expanded access across dissimilar systems. Although MARC and the Z39.50
Information Retrieval Protocol are well-established, there are pressures for
change. Existing standards must be brought forward to embrace SGML's maturation
to XML, the proliferation of digital resources, the Web's potential for linking,
and expanded retrieval expectations.
Key technology trends and statistics were reviewed by representatives from
CAS, Thomson, and Really Strategies. They included the following:
Computer processing power doubles every 12 to 18 months.
Telecommunications bandwidth has doubled every 6 to 9 months.
High bandwidth wireless is a reality.
Projected data growth in the next 2 years is estimated to be
57 billion gigabytes.
Although libraries are facing decreased funding, they are accelerating
spending on electronic services.
A 2002 Pew study states that 71 percent of school students
use the Internet as their major source for information versus 24 percent
who use the library; 73 percent of college students use the Internet versus
E-learning is the next big thing. By 2005, IDC forecasts that
$9.75 million will be generated in corporate e-learning revenue.
By 2004, 1.2 million K-12 students will be enrolled in virtual
classrooms, and 80 percent of U.S. and European universities will offer online
courses (according to a 2002 Brandon Hall study).
Secondary services must change their approach, focusing on "content
as king." Products will incorporate integrated, subject-specific targeted
solutions; one-stop shopping with multiple media types and formats; proprietary
and licensed content; and an emphasis on partnerships and linking. Since
libraries are"bad marketers," companies must also help them "become better
marketers to drive awareness and usage of the library."
Derk Haank's Keynote Address
Without a doubt, the most dynamic speaker (and most controversial, dependingon
your point of view) was Derk Haank, chairman and CEO of Elsevier. In his keynote
address, Haank expressed his opinion that in the paper world, the journal model
is just fine. When journals cost $10,000, it's because few payers (mainly a
few hundred large university libraries) are picking up the tab, with others
relyingon interlibrary loan, document delivery, or photocopying. (Incidentally,
Haank wants to get rid of document delivery altogether, but believes interlibrary
loan will be around for a while.) Haank "doesn't care who pays,but someone
Elsevier's strategy is migration to the virtual world of electronic publishing
as soon as possible. Journal brands will be kept, new content and features
introduced, historical problems corrected, archiving addressed, and a new business
A past problem has been journal price increases. Elsevier raised prices by
14 percent in 1999, but pricing has decreased in subsequent years to 8 percent
in 2000, and 7 percent in 2001 and 2002. The 11 major publishers have kept
price increases under 10 percent for the past few years.
The future problem is how to charge for electronic services. Elsevier is
willing to increase costs by only 5 percent, while at the same time adding
more searching capabilities and content. Such increases are "a bargain," since
no storage is required and savings can be made on interlibrary loan.
According to Haank, "enemies" are not publishers and secondary services.
The enemies are Google and the "lazy student" who primarily uses Google, thereby
relying on "inferior" services. Elsevier's free Scirus Web Search is a Google-like
engine for scientists. It searches the Web, internal data (searching behind
firewalls for university information), and ScienceDirect, which leads to more
usage of Elsevier journal products. Elsevier's main job is to make sure primary
material is used. The company would even give away secondary databases as navigation
tools as long as journals are purchased.
Haank contends that the "world would be better" if e-only services were implemented
and paper was eliminated. The business model to be applied first for new markets
and/or new products is to migrate current customers to more content and additional
functionality. Long-term agreements/partnerships (including 10-year contracts)
are possible with customers. The model is changing from payment for ownership
and a single price to payment for access and price based on value for customers.
Understandably, database protection is a constant theme of the annual NFAIS
conferences. Two attorneys and one aggregator reviewed the problems, recent
litigation, and forthcoming legislation. Each speaker pointed out the flaws
in current business models and urged the development of new prototypes.
The importance of licensing can't be emphasized enough.Although laws to expand
patent, copying, and trademark rights have been enacted, licenses protect databases
and digital materials. They define the product by limiting liability and controlling
simultaneous access, interlibrary loan, and databases not covered by copyright
(such as telephone directories). Joel Wolfson of Blank Rome, LLP, said, "The
license is the product."
While it's not clear whether digital downloads are services or goods, so
far there's been a U.S. moratorium on most online sales taxes. After Nov. 1,
2003, the long-term fate of taxation remains uncertain. At that time, the moratorium
could be lifted and not extended for a third time. Compounding the problem,
in July, a European Union value-added tax will be imposed on electronic products.
Steve Emmert of Reed Elsevier provided startling statistics on spam. In the
past year, it has grown 400 percent, with 100 corporations accounting for more
than 80 percent of it. Consequently, three anti-spam bills are before the current
Congress. Information providers must be careful about the deceptive nature
of spam compared to "legitimate" advertising.
NFAIS Customers Speak
A customer session is another long-standing conference tradition. Three individuals
from Swarthmore College, Accenture, and GlaxoSmithKline were invited to give
their corporate and academic perspectives regarding secondary services.
On the academic front, Anne Garrison explained that Swarthmore librarians
teach students natural language searching, but librarians don't want all databasesto
be "Google-ized." Students expect full text and will change topics if they
can't get it. (Garrison referred to Steven Bell's article, "Is More Always
Better?" publishedin the January 2003 issue ofAmerican Libraries.) Academic
libraries also require full text, mainly in disciplines that haven't received
much attention, historical materials, and primary sources like newspapers and
older runs of journals.
Accenture's Janice Keeler was most direct about her company's information
needs. She dared to disagree with Elsevier's Haank about a few issues, mainly
in regard to pricing. Her view is that usersdo want instant gratification,
and they don't want to buy the whole package. Modular and "rational" pricing
models are preferred. Despite Haank's wish to eliminate document delivery,
Keeler feels thereis a need for reprint/
archiving pricing rates for individual items.
In the corporate environment, database services must have an accounting mechanism
to track costs, user by user.Aggregators should also keep in mind remote or
mobile users and provide global support in each country's language.
45 Years and Counting
In closing sessions, Georg Friedrich Schultheiss of FIZ Karlsruhe, Karen
Hunter of Elsevier Science, and Ron Dunn of Thomson Learning reflected on the
past and future of NFAIS and the industry.
Schultheiss agrees with Haank that someone has to pay for the information,
but urged attendees to "observe the diversity of mankind." This means the diversity
of products and services and the establishment of stable processes in each
of the world's regions. Schultheiss stressed that there's no one global product
or user, and, therefore, it's not possible to harmonize everyone. He advised
the secondary services to listen to their different types of customers and
to be as flexible as possible.
Hunter reminded the audience that the rise of host services occurred between
1983 and 1988. At that time, aggregators were "seduced" by the view that electronic
was going to be supplemental to print. Hunter acknowledged that electronic
full text is now more important than print, but echoing Haank's sentiments,
she's not clear what the value of full text is.
Another change is the emergence of the "disaggregator" model. Although secondary
services are still with host sites (like Dialog), they now have their own sites.
As the last speaker, Dunn lamented how NFAIS members are referred to: as
the old economy, dinosaurs, traditional, stable, and a mature business. Dunn
agreed that members are operating mature business models, but claimed
that successful model changes have taken place.
Dunn believes print is here to stay, since the technology base is not there
to supplant it (for example, in LatinAmerica). Print is itself an excellent
technology. More than 70 percent of students want books in print, so books
will be around for a long time.
For the future, he recommended to NFAIS members that they read Jim Collins'book, Good
to Great, which tells how to run a company and succeed.
Stephanie C. Ardito is the principal of Ardito Information & Research,
Inc. and co-author of the Legal Issues column. Her e-mail address is email@example.com.