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Dialog Re-Introduces 'CPU-like' Charges, Drops Connect Time
by
Posted On May 6, 1998
Starting in June, Dialog will drop connect-time charges from its pricing strategy. According to Dan Wagner, chief executive of the Dialog Corporation, "We have eliminated connect-time charges, viewing the policy as unsustainable in today's high-speed access environment. Our customers have made it clear to us that they desire a more predictable pricing structure and want to work without the pressure of connect-time charging."

The telecommunications portion of the Dialog charges will still apply. As we prepared to file this story, a Dialog representative told us that the new price list posted in early May (http://www.dialog.com) would not announce across-the-board raises in output or per-hit charges. Instead, Dialog has instituted DialUnits, a composite measure of the system performance required by the search process. DialUnit charges will vary from $1 to $23, depending on the database.

In an interview on the new pricing mechanism, Wagner assured us that the new charging will allow users to prepare search strategies, read documentation ("Blue Sheets") and help screens, view free formats such as title lists, browse search results already on screen, configure alerts, set delivery options, and establish user preferences at no charge. Wagner estimated that a large number of searchers should see a reduction in their search costs. He compared the costs to LEXIS-NEXIS' per-statement charging. According to Wagner, Dialog will round up the charges for a DialUnit as they did with minute charges. For example, if a charge goes over one unit by a fraction, the charges will go to a full second unit.

Under the new pricing, the Dialog system continues to provide search-session costs regardless of what pricing scheme users choose. Searchers who want to bill immediately can still do so using the "actual" cost built around three components: DialUnits, telecom, and per-hit/format charges. The true cost may vary depending on subscription contract terms.

Clearly, Dialog intends the new pricing structure to push users toward flat-fee or subscription pricing; the only way searchers can avoid DialUnit charges is to switch to flat-fee or subscription pricing based on usage. At this point, even Dialog staff do not know exactly how the new DialUnit searching will affect specific searches. When we pointed out to Wagner that the DialUnit approach would make predicting search costs more difficult for transactional searchers than connect-time pricing and might reduce Dialog's password holders, he seemed aware and resigned to the possibility. "It would be unfortunate, sure, but that may be the case. But it's better for the company for us to focus on customers who want to use us."

The new management seems to have made its first major move to change the face of Dialog and, predictably, would seem to be following the former MAID longstanding history of relying heavily on subscription revenues. Dialog may also experience some advantages in distribution of that revenue, depending on whether contracts with database producers specify royalty payments based on connect-time charging assumptions that no longer exist.


Barbara Quint was senior editor of Online Searcher, co-editor of The Information Advisor’s Guide to Internet Research, and a columnist for Information Today.


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