Digital -- and Financially Viable

Scholars increasingly rely on digital resources, but who will pay for them? A new report released today by Ithaka -- an organization that promotes scholarly digitization -- aims to critically assess the sustainability of business models for non-profit digitization.

Researchers analyzed the diversity of revenue streams in 12 case studies, showing how each one combined funding sources to attempt financial stability. Projects ranged from a philosophy encyclopedia to a publishing corporation to an aggregated data set of bird sightings. The report -- following a study last year that identified different strategies for funding -- was created to help organizations work toward sustainable funding for their digitization projects.

"Revenue models that worked for decades in print have not made an easy transition to the internet, and the commercial world is scrambling to develop new business plans to support existing operations," the report reads. "The not-for-profit community must similarly realize that old models -- dependence on foundation support and institutional largesse -- are unlikely to be reliable over the long term. As government, foundation and university budgets tighten, helping projects develop sound sustainability plans become more critical than ever."

Laura Brown, executive vice president for Ithaka's Strategy and Research Division, emphasized that while the cases in question present interesting ideas for ways to build revenue to support digitization, the goal isn't to encourage readers to replicate the models. In fact, there is no defined school of thought on what works. "In print publication, you do a lot of research, put your book out, and that's the end of what you need to do. There's conversation around it, but it's not like you need to keep updating the book on a regular basis," Brown said. "When you do an online resource, you continually refresh and it is continually changing. When you take on one of these [digitization projects] there's an implied longer term window and type of activity that's significantly different than publication."

Brown did say, however, that a number of commonalities appeared across all 12 cases -- dedicated entrepreneurial leadership, the intent to offer a valuable resource, the attempt to minimize direct costs, the development of diverse revenue sources, and a system of accountability and measurement of success.

One case study outlined in the report was the Stanford Encyclopedia of Philosophy, started in 1995. The encyclopedia provides entries on philosophical matters that are constantly changed and updated by their authors as academia progresses. In the past, the encyclopedia was funded through Stanford, along with grants from the National Endowment for the Humanities and the National Institutes of Health.

However, in 2003, the program began to move away from dependence on grants and university budget allocations, instead opting to build an endowment, according to Ed Zalta, senior research scholar at Stanford and director of the digital encyclopedia. With a $4 million fundraising goal -- including $1 million from Stanford and $3 million raised by an organization of library associations with scholarly connections to the project -- the endowment is meant to provide an annual payout roughly equivalent to the encyclopedia's operating budget. To date, the endowment is at $3.3 million.

"Our primary goal is to continue fundraising among the worldwide library committee. If we do reach the goal, we will be in good shape for the long term," Zalta said.

To make up the current budget difference, users can buy subscriptions to the encyclopedia. All of the entries are freely available to the public, but the subscription provides pdf access to the entries, along with a number of other services. Zalta also emphasized that libraries that join the encyclopedia's library support organization receive a refund if Stanford ever decides to pull the plug on the encyclopedia project.

Another model of digitization business practice is the Thesaurus Linguae Gaecae, a collection of Greek writings from Homer through the 15th Century run through the University of California at Irvine. Founded in 1972 as a collection and eventually developing into a CD-ROM package, the works are now all online and accessible in part for a subscription fee. The program has historically been supported by the university, but a decrease in funding over the years -- and, with the current state of California universities, the threat of no funding at all -- has caused Maria Pantelia, professor of classics and director of the thesaurus, to look for other sources. The program has created an endowment, supported in part by NEH challenge grants. Universities are also charged varying subscription fees depending on their size. Though Irvine still provides funds to the program, most of the revenue used to support it comes from the two new sources of funding.

"My personal opinion is that it will become increasingly more and more difficult to support research projects. With the financial climate, and now more research projects than ever before, competition is higher and the need is higher," Pantelia said. "I expect that there will be a decrease in institutional support, so [our] subscription fee becomes the support."

Of the 12 models analyzed in the study, Brown and Nancy Maron, an analyst with Ithaka's Strategy and Research Division, said that each had their own high and low points. But they had a special liking for eBird, a site for bird watchers to report sightings and scientists to access them, which is run by the Cornell University Lab of Ornithology. Brown and Maron noted that eBird has a very diverse set of revenue streams, including corporate sponsorship, usage fees, endowment payout, and software customization fees.

"They were able to shift gears a couple of times in the course of their existence, responding to things that weren't working for them," Brown said.

But Maron emphasized that, "in all of the cases, pretty much without fail, we were not just looking for shining examples, not for people to go out and follow these examples. We hope people read these cases deeply ... looking at it in a well-rounded way."

Sarah Michalak, university librarian and associate provost for university libraries at University of North Carolina at Chapel Hill, saw value in emphasizing the use of many revenue streams to support digitization, but spoke of the importance of institutionalizing digitization programs within the infrastructure of university libraries. "I'm not telling the reference department that they are going to be self-sustaining," Michalak said. "I feel that the digital library is not like a photocopy service, it is very much integral to the library and the institution."

North Carolina -- in addition to the ongoing task of digitizing its entire archive -- has taken on a special digitization project called Documenting the American South. Though the program has received significant foundation and government grants, Michalak said university funding would not dry up because of the importance attributed to the project.

However, widespread use of digitization has not been without its skeptics, who often see it as a threat to their business models. Those who work in university presses, for example, see the digitization going on in libraries as pressure to change their fundamental practices. The American Association of University Presses has opposed open access, publishing a statement last month backing legislation against open access requirements for the NIH.

Though many have voiced their continued support for the printed word, few see digitization as a passing fad.

"In the long run, our society will continue to have a near reverence for books, and the printed documents and records of our heritage and our civilization," Michalak said. "I do feel that people see libraries as needing to be preserved. Gathering and preserving digital information has been added to that mission."