Economic Factors of Managing Digital Content and Establishing Digital Libraries: Tanner: JoDI

Economic Factors of Managing Digital Content and Establishing Digital Libraries

Simon Tanner
Special Issue Editor, HEDS Digitisation Services,
University of Hertfordshire, Hatfield, UK

The availability and management of information in digital formats has opened up varied means of fast and portable 24/7 access, encouraged new research routes, refreshed the information consumer-base and redefined the public domain, among other obvious benefits. Whether these benefits are economically beneficial to the consumer, the publisher or intermediaries is often overlooked, however. The literature is full of articles about digital projects, new technologies or methods, research, development and user studies, but the economic aspects of managing digital content and establishing digital libraries is proportionately under-represented. This special issue of JoDI extends the information base on this important subject and, with articles from key figures and institutions, will certainly engender thought and encourage debate.

With its economics theme, this issue is about the choices made by individuals, institutions and communities with regard to alternative uses of scarce resources to satisfy the desire for digital content and digital libraries. The effective utilization of resources is among the most important of management activities and in the context of digital libraries has several components:

  • immediate start-up costs of either creating or purchasing digital content;
  • further implementation costs for establishing a digital library or even just basic access to bought resources;
  • costs implicit in preserving, managing and maintaining a digital resource in the longer term.

Hand-in-hand with resource expenditure is the value and benefit derived from the resource itself, and how these are measured and offset against costs: can going digital ever become cost effective? Whether there are intentions to recover costs from use or to seek profit in the future remains a strategic question that every library manager will have to address. This issue of JoDI is constructed from papers received in response to an open 'call' last year and from invited authors. The papers are an eclectic mix that address many of the important economic issues just highlighted, from a wide array of viewpoints, as is inevitable from the sheer breadth of this subject area.

Delivering and Preserving Information

Libraries have experienced a strong shift in focus over the past decade towards digital formats for information resources. In a growing number of libraries, there is now an attitude that user demands will be met through digital media and electronic dissemination as much as through paper-based media. Universities are investing to provide improved teaching and learning resources via digital media. Other institutions, including the British Library and the US Library of Congress, are developing large technical infrastructures. The implementation of technical infrastructure and the improvement of access to the digital world is seen as hugely important for regions such as Africa, which lacks overall investment in social economic growth (Shibanda 2001, 2), and Latin America, where development has been limited by the relatively lower economic status of the library (Rodríguez 2001, 2). These shifts at the library or institutional level are a reflection of the macro economics of the global economy, which contains a much larger informational and digital element than ever before. Cronin points out that America's industrial output is about the same as 100 years ago, even though real gross domestic product (GDP) is now 20 times greater, thus 'reflecting the higher knowledge content of contemporary goods and services' (Cronin 1998, 3).

Given this macro economic situation, many institutions have realised they must put in place information policies, services and technologies with a firmer long-term economic strategy than might previously have been considered. The business plan driving MIT's development of DSpace, described by Barton and Walker, is one such example. DSpace is MIT Libraries' innovative institutional digital repository designed to manage, host, preserve and enable distribution of the scholarly output of MIT's faculty. In discussing the DSpace cost model, potential funding sources and future plans, the paper addresses the central issues of how to expend resources to best benefit the institution informationally. There is a clear intent to roll out the DSpace model to many other institutions, so this paper is a useful introduction to a business-like approach that may become a norm for many similar activities in the future.

Another major economic institutional issue is the long-term preservation of large documentary collections. Almost all libraries have to think about preservation in both analogue and digital worlds. Even if they do not themselves preserve materials, they need to be sure that some institutions are doing so if they are to direct their users to them. Chapman explores the institutional costs of digital preservation by comparing the consumer costs charged for repository storage. In comparing the long-term storage charges for the Harvard University Depository and the OCLC Digital Archive, it is possible to explore the economic decisions implicit in preserving either analogue or digital materials. Chapman finds that while format is significant, it is not the sole determinant of preservation cost. This is an important insight and evidence base on which to develop affordable preservation services.

Journal and Publishing Issues

The purchase of digital resources remains a difficult balancing act of apparently conflicting interests. Publishers want to retain and enhance profitability: academic journal prices reportedly rose by 215% between 1986 and 2000 compared with a 68% rise in the cost of monographs ( Electronic availability of journals is not relieving the cost to libraries. Electronic journals are often treated as a value-added service, rather than a replacement technology. Thus the library budget appears to be shrinking for the same amount of information resource. Meanwhile, user demand for more digital content direct to desktops continues to grow, as confirmed by recent LibQUAL+ surveys (ARL 2002). The use of LIBQUAL+ is highlighted by Heath et al., discussed later in this editorial.

Purchase of a digital product is likely to mean less money for a paper-based one, and thus the balancing of costs against opportunity has arguably never been harder. Fosmire and Young (2000) identified over 125 free scholarly e-journals in the STM sector, a small, growing trend that I think is significant in the overall picture. It is in this context that Geyer-Schultz et al. examine the roles of different players involved in the production of science and technology information (STI). By modelling the value chain of the STI market, the paper seeks to realise the strategic and economic opportunities for scientific libraries.

As important as it is to monetize the increasing costs of print versus electronic journals, there are wider economic and international issues, such as information inequalities, that electronic journals can address given new pricing structures and the opportunities possible in the digital arena. Traditional publishing and distribution mechanisms do not deliver information products in an equitable way because a library in an economically developing country just cannot afford the same level of information provision as one in a rich country. Digital resources, by breaking the relationship between the cost of production and distribution from that of intellectual property charges, offer an opportunity to deliver more equitable information services. As Witten et al. (2001, 82) point out, "Whereas a US medical library subscribes to about 5000 journals, the Nairobi University Medical School Library, long regarded as a flagship center in East Africa, receives just 20 journals. In Brazzaville, Congo, the university has only 40 medical books and a dozen journals, all published before 1993".

To take advantage of the new economic possibilities of digital resources, the World Health Organization has negotiated a deal with publishers of approximately 1000 leading medical and scientific journals to offer electronic subscriptions at 'free or deeply-reduced rates to institutions in the developing world' for an initial three-year period ( It is clear this is an enormous information benefit to the developing world. It also offers economic benefits to all parties that are only possible in the digital arena. Digital distribution costs to the publishers are virtually nothing, but they gain significant market knowledge and customer loyalty in a new and developing world market. The opportunity for cooperation and central or consortia negotiation enables bodies, such as the World Health Organization, to predict costs against significant benefits and to manage these effectively in a predictable way with easily apparent value.

These are important developments that many would like to see taken to the logical end - the open access model of delivery. Focusing on scholarly associations, Willinsky considers the viability of an open access or free-to-read format for online journals, looking at the overlap between subscription-based and open access journals, and at publishing revenues against costs. The paper is a thoughtful and provocative call for open access publishing and will add new economic evidence to this already heated debate.


Having expended the budget and bought, delivered and preserved all these digital resources, how do we know whether this has been successful and satisfied users' information requirements? While measuring the effectiveness of libraries is an age old story, there are still many chapters to be written before we can say we have fully understood our place in the wider plot. The digital information environment, with the average library now linked to many more resources and intermediaries, means that controlling or even guiding the user's information experience is ever more challenging. Various projects are looking in detail at the evaluation of digital library services and systems, but the economic consequences of choices remains an area that deserves a lot more exploration. Heath et al. examine methods to evaluate how digital libraries are valued by their users, and then explore the consequences and means of allocating resources to user-identified needs. The authors make a case for integrating the available evaluation methodologies (LibQUAL+ and CAPM) to enable managers to identify gaps in digital library services and allocate resources more effectively.


This special issue is an eclectic mix of articles covering much of the lifecycle and value chain of digital content and digital libraries. This reflects the pervasive nature of economics - influencing every decision, technology, implementation and evaluation made of digital resources and libraries. I hope that future economics themed issues will grow out of this one and deliver new insights and research findings related to the economic factors of managing digital content and establishing digital libraries.

I would like to see more information on the economic divide between the approach of wealthy nations and poorer nations to digital developments. For all sectors, I also feel that much more information should be made publicly available on the costs of establishing digital libraries and the economic effects of digital resources on the institution. Future issues may include cost surveys and case studies to illuminate these issues. As this issue has highlighted, evaluation tools remain a vital area of discovery because to justify future expenditure all organisations need to quantify the success of current activities. Finally, digital preservation remains the great unknown as far as the real costs, and implications of those costs, are concerned. We are starting to see important work by Chapman and others, particularly Lavoie's (2003) economic assessment of incentives to digital preservation, but there is much more work to be done in this area.

I hope you enjoy this special issue and look forward to your responses to Economic Factors of Managing Digital Content and Establishing Digital Libraries.


I acknowledge the services of the 16 reviewers who helped shape this special issue. I am very grateful to have had their considered and constructive feedback to the papers in this issue.


Association of Research Libraries (2002) LibQUAL+ Spring 2002 Survey Results: Volume 1 Aggregate Survey Results (Washington: Association of Research Libraries), and LibQUAL+ Spring 2002 Survey Results: Volume 5 Association of Research Libraries Survey Results (Washington: Association of Research Libraries)

Cronin B. (1998) "Social dimensions of the digital revolution". Journal of Information, Communication and Library Science, 4 (4)

Fosmire, M. and Young, E. (2000) "Free Scholarly Electronic Journals: An Annotated Webliography". Issues in Science and Technology Librarianship, No. 28

Lavoie, B. (2003) "The Incentives to Preserve Digital Materials: Roles, Scenarios, and Economic Decision-Making". White paper, OCLC Research (747K/51pp)

Rodriguez, A. (2001) "The digital divide: the view from Latin America and the Caribbean". In 67th IFLA Council and General Conference, Boston, USA, August

Shibanda, G. G. (2001) "Skills and competencies for digital information management in Africa". In 67th IFLA Council and General Conference, Boston, USA, August

Witten, I.H., Loots, M., Trujillo, M.F. and Bainbridge, D. (2001) "The promise of digital libraries in developing countries". Communications of the ACM, 44(5) May, 82-85