1. Paying for digital libraries Why is this hard? New services, but no new money Cost of transition Users not in the community A problem of quantization: Sell by item or sell in bulk? Sell to one reader or to many?

2. Digital reading in libraries Our technology has outrun our economics. As always. Items sent outApprox. bytes Website900M9 TB Reading rooms1.6M1 TB Library of Congress, calendar year 2000 statistics:

3. More and cheaper disk (From Jim Gray)

4. Even more information!

5. And yet more information…

6. How do we pay for it all? Communities pay (what happens now) Readers pay by month or year Readers pay by item or minute Authors pay Advertising pays Other (PR, bounties, cost avoidance, …) None of these seem to quite work…

7. Electronic purchases at SUNY

8. “freely available to everyone, twenty-four hours a day, everywhere, forever.” (Harnad) Remember when electricity was going to be “too cheap to meter”?* 80% of a library cost is not shelfspace. If we all we cared about was minimizing storage cost, we’d have been reading microfilm for decades. Books on disk are cents each instead of dollars: but the staff still gets paid (perhaps more). * Lewis Strauss, AEC Chm, Sept. 16, 1954

9. Costs: libraries and disk farms Per book-year: $3-8 Per staff position: 7,000-20,000 books Per megabyte-year: under a cent Per staff position: terabytes (millions of books)

10. Why is digital a problem? Most users are not in the community paying. For example, the BUBL site had only 15% of its users from within the UK, which pays for it. Why should a university provide a good digital library service, if most of the users are not on premises?

11. Subscriptions

12. Library subscriptions work Elsevier reports regular growth in ScienceDirect, with $1.5B in online revenue. Consumers spent relatively little for online content, however. Enough is available free, and people resent paying for better: Gresham’s law (but note bottled water and cable TV)

13. Page charges Brain Research costs 19,000 euros/yr PLOS will recover costs from authors at $1500 per article; then post free. US legislation to prohibit copyright on government funded research Warning: proportionally more authors are in universities and readers in industry The answer has to be in profit and setup costs, since authors are not paid and paper is cheap.

14. Advertising

15. Advertising unlikely to help Most journals in past did not get that much advertising; most web advertising goes to a few sites and does not seem likely to be targeted at readers of journals. Mostly, libraries advertise for donors; and computer equipment becomes obsolete too quickly to attract bequests.

16. Micropayments Lots of resistance: people dislike Recordkeeping, metering Hard to collect small amounts of money Lots of administrative overhead Bad social incentives Users, librarians, publishers all risk-averse So we’ll sell in bulk to groups

17. Other ideas Foundations Cost avoidance Advertising print Reputation Bounties Dedicated taxes Government support Pledge breaks

18. Conclusions It’s probably library subscriptions vs author page-charges (paid by institutions). Both represent bulk sales to groups. Inertia is winning: library subscriptions