Educational Pricing Based On Unique Users

Posted on 3/28/2011 by Jim Pickerell | Printable Version | Comments (0)

Educational publishers regularly set up “preferred provider” agreements with image suppliers who represent large collections. Publishers outline certain standard terms and uses. The image provider is then asked to stipulate a fee that will be charged for each use. Based on the fees providers agree to charge the publisher decides which supplier to use.

McGraw Hill School Education Group has recently requested quotes from potential preferred providers and they have introduced a new concept for determining circulation of the product. Instead of talking about the number of copies printed McGraw Hill now refers to the number of “unique users.”
    “Unique user is defined as a discrete individual who receives access to the same component through any number of multiple media. For example, if a user receives a print and CD-ROM version of the same component and also receives access to the same component via a closed website, that is calculated as one unique user.”
With the growing expansion of electronic delivery of educational information it makes sense to count customers who receive information rather than products delivered. If a student is given a book and a CD-ROM and also has access to the information in the text online that student is counted as one user, not three. If the student's parents are able to use the student’s password to access the online site I suspect the parents are not counted as unique users.

It is not clear how an image used in a powerpoint presentation and shown to a class of 20 students would be counted. Is that one unit (the teacher) or 20 units? If all the students are already counted as owners of the printed book, or have a password giving them access to the information online, then it seems reasonable that they should not be counted twice. If, on the other hand, the powerpoint presentation uses reference material out of a product that is different from the one licensed for the student’s use it would seem that each member of the class should be counted as a single unit – even the ones sleeping through the presentation.

Some publishers are setting up image databases that will enable students to create their own powerpoint presentations. When a student uses one of these images to create a presentation to an entire class, or the student body will the presentation be counted as one “unique user” or the total number of recipients of the information?

One of the big concerns going forward, which is not dealt with precisely in the language of the McGraw Hill agreement, is how those who only receive passwords to a web site, but no physical products (books or CD-ROMs) will be counted.

In the not to distant future most students will be accessing the educational information they need online rather than using printed texts. This will all information to be corrected and updated in a timely manner and it will be less expensive because paper, printing and shipping are eliminated.

For school systems the huge cost of printed books would be eliminated, but there may also be some disadvantages. Currently, K-12 schools tend to use texts for several years. So a text that cost $100 might really only cost $20 or less per student because 5 (or more) students get the benefit of using the same book. If the publisher can sell a new password to every student the count of “unique users” will likely be significantly higher than “circulation” figures of the past. But, depending on what publishers are able to charge for electronic access to the information this change in the method of delivery may not generate more revenue.

Currently some publishers are able to sell e-books for about half the price of the printed version and considering the cost of producing and delivering an e-product that would appear to be a significant increase in the value of the content given the savings in paper, printing and shipping.

An analogous situation is what the Dallas Morning News is charging its newspaper for digital delivery of the information. The paper charges customers $34.62 a month for the printed version plus and the eEdition was thrown in for free. But if the subscriber just wants the eEdition plus the iPad and iPhone apps the cost is $16.95 a month. Readers can save half of the print subscription cost if they just subscribe to the digital services. How long is it going to take school systems that are strapped for cash to figure this out?

If all of the electronic users are counted what used to be a distribution of 100,000 copies of a book, might now become 500,000 or more unique users over a period of 5 to 10 years. Another concern is that students may share passwords unless the school systems insure that everyone registered in a class has his or her own password. This is probably not a big concern in K-12 learning environments where typically the school systems provide the text. However, in many private schools it is the responsibility of each student to purchase his or her own texts. Certainly, when we get to the college and university level the possibility of sharing passwords would seem much more likely.

At the university level there is big business in selling used book. Neither publishers nor creators benefit from these sales. In the future content creators might benefit from increased sales if publishers are able to use passwords to control the delivery of educational information to each unique user.

Things We Need To Know To Establish A Fair Price

First, we need to know that the publishers have systems to count all the unique users.

Next, we must be sure that the publisher will report when they exceed the authorized distribution number. Given what has been happening in the industry in the last few years, it is hard to trust any publisher to actually do this. If it is impossible to trust them, and if they will not put systems in place that will allow us to monitor the number of licenses for a particular title, the only alternatives are to charge a very high price to cover all contingencies, or take what little they are willing to hand out and accept that we are being exploited.   

If we are pricing for 100,000 unique users, and to qualify as a “unique user” the customer must receive a printed book, then the fee charged should be the same as would be charged to 100,000 circulation plus 50% for all the supplemental materials that might be included. If the customer also has access to online information then the customer should be charged an additional 50% for a total of 100% or double the basic circulation charge. Charges for multiple languages would be additional.

If the “unique users” include those who just receive online access and no printed materials then the price should be the same as might be charged for a 100,000 circulation.

To establish fair prices for future usages content creators must understand more about the future plans of publishers, the likely prices they will be able to charge users for access to the information they supply, and how those prices relate to what the publishers have been charging for books.

Copyright © 2011 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


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