Introduction

This opening chapter aims to provide an overview of digital library economics, describing the main areas to be discussed in more detail in subsequent chapters. It is complemented by Chapter 4, a résumé and critique by Derek Law of the case studies that form an integral part of the later chapters of this publication. For a fuller contextual and environmental analysis of the subject, see Digital Library Economics: An Academic Perspective (Baker and Evans, 2009), especially the first two chapters.

Defining the digital library

In ‘an era of unprecedented technological innovation and evolving user expectations and information-seeking behaviour, we are arguably now an online society, with digital services increasingly common and increasingly preferred’ (Buchanan, 2010; see also Castelli, 2006). Moreover, there continues to be an exponential growth in digital content and an ever greater divergence in its provenance. There is clearly a significant role for digital libraries which, ideally, should ‘enable any citizen to access all human knowledge anytime and anywhere, in a friendly, multi-modal, efficient, and effective way, by overcoming barriers of distance, language, and culture and by using multiple Internet-connected devices’.¹

What will the library be for, what will it be doing, in 20 years time? What are the things done now that should be distilled and preserved for the future, the unique roles and tasks that should continue, however technology might develop, and which are so demonstrably vital that funders and policy-makers will want to pay for them? A number of definitions of a digital library have been put forward in recent years. The most popular were analysed in Digital Library Economics (Baker and Evans, 2009). The working definition of the Digital Library Federation is regularly cited and appears to have a wide currency:

The definition from the Joint Information Systems Committee (JISC) stresses the distributed nature of electronic library provision:

More recently, Candela et al. (2011) have provided another variant on the basic definition, as follows:

Our definition of a ‘digital library’ remains much the same as it was in Digital Library Economics: An Academic Perspective (Baker and Evans, 2009):

In addition, digital libraries must maintain, store and preserve in ways not envisaged in a traditional library set-up. Elements of a digital library may include the conversion of existing services into digital mode or the creation of new services, for example ‘online delivery, portals, personalised services, online teaching modules, online reference, digitised collections, or electronic publishing’ (Poll, 2005). The emphasis will vary depending upon context, need and priority, though the basic elements identified here are typically always present (see, for example, Digital Library Federation, 1998; Seadle and Greifeneder, 2007).

The need for economics

Libraries – of all types – face an uncertain future (Feather, 2004; Grant, 2010). So do publishers and others involved in the creation, publication and dissemination of information and knowledge (see, for example, Paulson, 2011; Johnson, 2012). Continuing global economic difficulties and increased competition from other services and alternative means of provision mean that libraries will have to fight for resources, including through the development of strategic approaches and partnerships (Rasmussen and Jochumsen, 2003). In Digital Library Economics (Baker and Evans, 2009) we stressed the importance of the financial and related aspects of digital library management and development:

However, it is only since the late 1990s that the need for a better understanding of all economic aspects of digital libraries – and notably cost, funding, long-term financial implications and the need to ensure sustainability – has been fully recognised. The drive to ensure sustainability has become ever more important and prevalent:

In Digital Library Economics (Baker and Evans, 2009), we discussed in some detail the key themes surrounding the development of the digital library in the first decade of the twenty-first century, as do the other authors in that volume. Those themes were further developed and broadened in Libraries and Society: Role, Responsibility and Future in an Age of Change (Baker and Evans, 2011) and even more so in Trends, Discovery and People in the Digital Age (Baker and Evans, 2013). The future of libraries – of all kinds – will be as dependent on economic and financial sustainability as on technological developments, though having said that it is clear that the two key themes of sustainability and innovation are inextricably linked. As both Eakin and Pomerantz (2009) and Koehn and Hawamdeh (2010) point out, libraries are in yet another phase of belt tightening and this situation is likely to continue for some considerable time.

All library systems are required to be efficient, effective and relevant, and economic pressures (see, for example, Martinez et al., 1998; Hutchings 2009; Koehn and Hawamdeh, 2010) are leading to the questioning of received wisdom and accepted models, the development and implementation of radical solutions and a resulting trend towards discontinuous change simply because existing ways of doing things can no longer be afforded (Hyams, 2010). Digital library developments are no longer an adjunct to traditional provision and access; they replace it – for good (Curtis et al., 2012) – though ‘the justifications for delivering cultural resources digitally can rarely be made on purely financial grounds as the fiscal returns on investment are relatively small, but the returns for culture, education and prestige are high’ (Tanner, 2004).

It is clear that change is already well under way (Keiser, 2010), with a wide range of pathfinder and exemplar projects exploring new futures for libraries. Indeed, librarians have often been some of the earliest adopters of new technologies (Walter, 2010), paving the way for more widespread adoption by other public and private sector organisations, though a number of commentators have observed that progress is neither consistent nor coherent. Nevertheless, librarians have evolved ‘from mere content providers to sophisticated service suppliers’ (Markscheffel, in CILIP, 2007) and in consequence, Buchanan (2010; see also Chowdhury, 2010) argues that, as a trusted information provider, libraries are in an advantageous position to respond to this much-changed environment, but this requires ‘integrated strategic and enterprise architecture planning’ across a complex matrix of variables, of which economic factors are a fundamental aspect. ‘While challenging, such integrated planning should be regarded as an opportunity for the library to evolve as an enterprise in the digital age, or at minimum, to simply keep pace with societal change and alternative service providers’ (Buchanan, 2010). It needs to be stressed, though, that once libraries enter the online world, they ‘are moving from a relatively sheltered environment, operating at the pace of the academic enterprise, into one that operates at the speed of web commerce’ (JISC, 2008) and away from the ‘dependency culture’ which Derek Law describes in Chapter 4. In any case, ‘the pervasive nature of economics [means that it is something that is] influencing every decision, technology, implementation and evaluation’ (Tanner, 2004), hence the need for a full and clear understanding of the economic management of the digital library. As Cathro puts it:

However, as (Tanner 2004; see also Lee, 1997; Deegan and Tanner, 2002; O’Connor, 2005; Jubb, 2007; Law, 2009; Creaser, 2011) goes on to say, the economic aspects of managing digital content and establishing digital libraries are proportionately underrepresented in the relevant literature, to the point where it is not necessarily clear or certain that digital solutions are always the most cost-effective or that they are economically sustainable (Marcum, 2001; Baker, 2006; Boukacem-Zeghmouri and Kamga, 2008; Lavoie, 2008). Indeed, the final evaluation of the UK’s major eLib programme^3,4 makes almost no reference to the economic benefits of the initiative, though the subsequent assessment of the Joint Information Systems Committee’s impact since its setting up in the wake of eLib suggested significant savings as a result of JISC’s spend on electronic resources (Dolphin and Walk, 2008).

What is the value of libraries? Without robust answers to this question, it will be difficult to justify continued investment. Yet much progress still needs to be achieved if convincing cases are to be made. There are nevertheless some notable contributions to the subject area (see, for example, Lesk, 1997, 1999, 2005; Butler and Kingma, 1999; Beagrie et al., 2008) and a number of earlier case studies show that a range of digital library developments have considered the financial implications, their evaluation and their management (see, for example, Martinez et al., 1998; Brewer, 2002; Choy, 2005; Hickox et al., 2006; Franklin and Plum, 2008; Poll, 2010; Steinberger, 2010; Walmiki, 2010). Tanner (2009) stresses, however, that information and communications technology (ICT) in digital libraries is not always showing the immediate return on investment (ROI) delivered in the 1980s and 1990s, such that future developments will not necessarily instantly save staff time or reduce costs, certainly not if there is no overarching framework within which cost-effective decisions can be taken. Without coherent economic strategies and realistic business, funding, costing and pricing models, then rapid and effective digital library development could well be stifled (Carr, 2009). Financial considerations become ever more crucial in such circumstances.

Recent history and relevant work

Carr (2009) provides a useful history of digital library economics, noting that the financial sustainability of early digital library projects – as, for example JSTOR, discussed in Case Study 1 – was ‘by no means certain’ in their early years. Indeed, Carr stresses that there were many who did not believe that such initiatives would survive. Philanthropic funding made a big difference to such projects. Not all of them, though, put the question of long-term sustainability to one side in their early days. The California Digital Library (CDL) recognised as early as 1996 that the traditional provision of’comprehensive research collections’ across a distributed campus system was financially unsustainable. Both ‘operational efficiencies’ and ‘additional cost savings’ were required, at least in the longer term (Ober, 1999). This seems to have been achieved, at least partly, by the development of a number of equitable co-investment funding models that have been ‘the basis for sharing the financial responsibility for providing access to … digital resources … on all ten campuses’ (French, 2004). Business models were developed by publishers in order to calculate the total cost to the university of the digital resources, including a unit cost model based on full-time equivalent student numbers, the cost of print plus an electronic access fee and a flat fee plus a fee for ongoing access. CDL’s involvement in digital library projects is discussed further in Case Studies 7 and 11. Carr (2009) notes other early successes, such as the ‘Making of America’ project:⁵‘Although few details have been published about the economics of this large digital collection – now containing almost four million digitised pages – the fact that it is still freely available and publicly searchable suggests that the costs of sustaining it have proved manageable.’

Kollöffel and Kaandorp (2003) describe the development of a model for academic libraries that can be used to give detailed insight into the library’s current financial structure and to quantify the impact of the transition to a digital environment. Moving forward, certain library services, activities and costs will decrease whereas others will increase. How will this affect the library budget? The project gave all participants detailed insight into library costs before and after such a transition, and showed that the added value of library services increases. The model is a cooperation of the libraries of the universities of Utrecht in the Netherlands, Lulea in Sweden and Bremen in Germany. Elsevier commissioned the project; Atos KPMG Consulting delivered the methodology (Rapid Activity Based Costing) and financial expertise. Franklin and Plum (2008; see also Choy, 2005) surveyed early attempts by libraries to assess the value and impact of digital content on users. Among these were projects to standardise the measurement of digital content use, user satisfaction with digital content, cost-benefit analyses, and determination of the demographics and purpose of use of digital content.

Pomerantz et al. (2008) traced the history of digital libraries (DLs) in the United States through the funding sources that have supported DL research and development over the past decade and a half. A set of related questions are addressed: How have the mission and goals of funding agencies affected the types of projects that have been funded? What have been the deliverables from funded projects and how have the goals of the funding agencies shaped those deliverables? Funding agencies have exerted strong influence over research and development in DLs, and different funding agencies have funded different types of projects, with varying sets of concerns for driving the various fields that feed into DLs.

One great assistance to the development of DLs has been the ability to measure usage relatively easily. The development of the COUNTER (Counting Online Usage of Networked Electronic Resources) Code of Practice has helped. It has been possible to undertake many research projects aimed at analysing cost and usage and assessing relative value for money (King et al., 2003; Cooper, 2006).

Case Study 9 summarises and develops this kind of work.

In 2004, Pung et al. assessed the British Library’s contribution to the UK national economy using the contingent valuation method (CVM) discussed in more detail in Chapter 3 and Case Study 9. Their study was the first of its kind and provided not only a comprehensive evaluation of the collections and services, but also a demonstration of how the technique could best be used, not least in a digital library context. Missingham (2005) followed this up by examining CVM not only at the British Library but also by public library services in the United States, and reviewed value studies of national bibliographic services in Canada and New Zealand.

Yet in 2007 the work of the Research Information Network on digital provision led to the conclusion that ‘we lack the key components in the evidence base on which we might build an effective strategy for the future (Jubb, 2007). The Ithaka report Sustainability and Revenue Models for Online Academic Resources (Guthrie et al., 2008) thus examined the key mindsets needed to run a digital project and the success drivers and challenges of several revenue models, giving an overview of many of the issues which are pertinent to digitisation initiatives, including creating the culture and structure for success, leveraging value and some of the pros and cons of revenue-generating options. At much the same time, Joint (2008) examined the impact on library funding of ‘budget holders’ idiosyncratic understanding of three important principles of technological innovation: the more you use a technology, the less staff you need, the better the service becomes and the lower the cost of the service’. He found that there were ‘common misunderstandings’ about not only ‘service-enhancing impacts’ but also the real costs of supposedly free digital library provision – a major challenge still.

With the support of the Joint Information Systems Committee (JISC), the US National Endowment for the Humanities and the US National Science Foundation, Ithaka selected a range of projects to illustrate the various business models being employed (Maron et al., 2009). This new work focused on how project leaders were implementing these models, including advertising income, author fees, content licensing, corporate sponsorship, endowment, memberships, subscriptions, premium services and more. How did project leaders define their organisational mission and their sustainability goals? What steps did they take to build business models that generated revenue and controlled costs while also serving users? What contributed to the success of different models and what challenges were encountered?

The Blue Ribbon Task Force (2008) was set up to look at sustainable digital preservation and access, looking at economic sustainability, the cost of preserving valuable data and the identification of who will pay for it. The final report of the Task Force (2010) provides general principles and actions to support long-term economic sustainability; context-specific recommendations tailored to specific scenarios analysed in the report; and an agenda for priority actions and next steps, organised according to the type of decision-maker best suited to carry that action forward.

Digital preservation is concerned with the long-term safekeeping of electronic resources. How can we be confident of their permanence if we do not know the cost of preservation? One of the first attempts to look at lifecycle costing was the LIFE (Lifecycle Information for E-Literature⁶) Project (Watson, 2005; Davies et al., 2007; Wheatley and Hole, 2009), based at University College London. It has made a major step forward in understanding the long-term costs because it aimed at a comprehensive analysis of activities related to the management of content from selection, through licensing and acquisition to ingest, metadata creation, adding links, access, user support, storage costs and preservation. The project developed at least the basis for a robust methodology to model the digital lifecycle and to calculate the costs of preserving digital information for the next five, ten or 100 years. Libraries can now apply this process and plan effectively for the preservation of their digital collections.

Research into long-term preservation costs has also been explored in Keeping Research Data Safe – A Cost Model and Guidance for UK Universities (Beagrie et al., 2008). The study made a major contribution to the understanding of the long-term preservation costs for research data by developing a cost model and indentifying cost variables for preserving research data in UK universities. The conclusion was that it may be difficult to identify clearly digitisation costs without a full contextual understanding, not least because an initiative may be part of a set of activities, therefore making it difficult to isolate the cost model. The Keeping Research Data Safe 2 (KRDS2) project (Beagrie et al., 2010) built on this work and delivered the following:

Walters and Skinner (2010) describe one economically sustainable digital preservation model in practice, the Meta Archive Cooperative, a distributed digital preservation network that has been in operation since 2004. The Meta Archive has built its financial sustainability model and has experienced successes with it for several years, with an emphasis on cooperative models. Where possible, the approach taken by JISC is to sustain project outputs and the synthesis of knowledge, learning and lessons across a number of projects through existing JISC services or other agencies. An example of this approach can be seen in the toolkits created by JISC infoNet.⁷

The JISC-funded ESPIDA (An Effective Strategic model for the Preservation and Disposal of Institutional Digital Assets) project was completed in January 2007.⁸ The initial aim was’the creation of a model that could help the digital preservation community achieve sustained funding’. The plan was to develop a model of the relationships, roles and responsibilities, costs, benefits and risks inherent in institutional digital preservation and implement this model by selling it to all the stakeholder groups, including senior management, administrative and clerical staff and academic teachers and researchers.’In particular, the project sought to identify the cost and benefits to the institution of developing a coherent, managed and sustainable approach to the preservation of its digital assets in a way that is transparent to all stakeholders.’ The model that ESPIDA has developed can help make business cases for proposals that may not necessarily offer immediate financial benefit to an organisation, but rather bring benefit in more intangible spheres. While it was designed initially to be used within the area of digital resource management, it has potential for far wider application (decision-making, performance measurement, change management).

Ithaka are currently working on two projects directly focusing on sustainability. Digital Content and Host Institution Support Strategies (UK) is supported by JISC. The emphasis is on financial sustainability post launch of a project beyond the initial up-front costs. There are two phases to the project:

The final report Sustaining Our Digital Future: Institutional Strategies for Digital Content was published early 2013.

Sustaining the Digital Humanities: Host Institution Support Beyond the Start-up Phase is also an Ithaka project and builds upon the JISC-funded work. It is supported by the National Endowment for the Humanities. It commenced in October 2012; the final paper will be published March 2014. The project also has two stages:

Reference must also be made to the significant work of Houghton and others (Houghton et al., 2009) on the economic implications of alternative scholarly publishing models, with special reference to costs and benefits. Houghton discusses this work further in Case Study 7. Hall provides a useful critique of the research and the subsequent discussion of the main findings.⁹

Key themes

As we noted in Digital Library Economics (Baker and Evans, 2009):

The key themes are generally the same regardless of the resources in question … because there is always the need to juggle diverse needs with limited resources in a constant quest for sustainability. Libraries of all kinds … must be efficient and productive along with the rest of the economy. As a result, they have to increase efficiency and decrease costs in order to survive in any economic climate, and to ensure that information is available as cheaply as possible …

In that book, we identified what we regarded as the key themes relating to all aspects of digital libraries. Those relating particularly to their economic aspects form the basic framework of this book. They are briefly reviewed here before being discussed in more detail in later chapters and through the case studies.

Conclusion

These, then, are the main areas covered in this handbook. The ‘wordles’ at the start of each case study – and perhaps especially that associated with Derek Law’s summary in Chapter 4 – show both the complexity of the subject on the one hand and the commonality of the key areas on the other. There can be no one right answer and no perfect solution to the many problems posed in any digital library project. However, the last ten years have seen many positive developments that need to be used as the basis of robust collection and service development for the longer term. As we said in the companion volume to this handbook:

As Derek Law comments in Chapter 4, the digital library world is populated by naturally collaborative innovators, as evinced by the case studies, so there is much cause for optimism in terms of meeting the challenges identified in this chapter and throughout the rest of the publication. The emphasis is on practical applications based on as wide a range of experience and know-how as we have been able to assemble, using key contributions from experts in the field, whether on the basis of the available literature or the specific contributions to this handbook.

References