Making digital preservation affordable: Values and business models Simon Tanner Director King’s Digital Consultancy Services King’s College London [email_address]

Overview Monetizing content – some models The role of public repositories: My View… It is about time - the Attention Economy Cost and business models Costs and OAIS Balancing costs with benefits and institutional mission Risk and consequence Justifying and building your case Levers: getting your way…

Monetizing content – some models

The role of public repositories: My View…

It is about time - the Attention Economy

Cost and business models

Costs and OAIS

Balancing costs with benefits and institutional mission

Risk and consequence

Justifying and building your case

Levers: getting your way…

Revenue Generation Models Advertising model: supported by advertising revenue Infomediary model: user data as revenue Merchant model: traditional retail model Affiliate model: financial incentives to affiliated partner sites Community model: users invest in a site (e.g. contribution of content, money, time, hosting) Subscription model: users pay for access to “value added” content (e.g. high resolution files) Utility model: metered usage or pay-per-view THESE DON’T WORK FOR MOST OF US! Amazon’s last Quarter $80m profit requires $3bn in sales (~2.5% ROI)

Advertising model:

supported by advertising revenue

Infomediary model:

user data as revenue

Merchant model:

traditional retail model

Affiliate model:

financial incentives to affiliated partner sites

Community model:

users invest in a site (e.g. contribution of content, money, time, hosting)

Subscription model:

users pay for access to “value added” content (e.g. high resolution files)

Utility model:

metered usage or pay-per-view

The role of public repositories: My View… My view: A place where a community nourishes its memory and its imagination – where it connects with the past and invents its future. Purpose: To educate, enlighten and entertain - to promote and disseminate and to preserve culture This may be preserving the record of a way of life or the very roots of a culture, its language, literature, music and traditions Nature, politics, and war have always been the mortal enemies of public repositories Preserving information is a human purpose – it can only happen through an act of will and desire Format is less important than content and experience we receive: users are “format agnostic”. But format matters to our digital preservation actions – a paradox. (2004 Information Format Trends: OCLC)

My view: A place where a community nourishes its memory and its imagination – where it connects with the past and invents its future.

Purpose: To educate, enlighten and entertain - to promote and disseminate and to preserve culture

This may be preserving the record of a way of life or the very roots of a culture, its language, literature, music and traditions

Nature, politics, and war have always been the mortal enemies of public repositories

Preserving information is a human purpose – it can only happen through an act of will and desire

Format is less important than content and experience we receive: users are “format agnostic”. But format matters to our digital preservation actions – a paradox. (2004 Information Format Trends: OCLC)

It is about time! Digital Preservation the time to take action is short those actions are continuous over time Strategic Time Problems: Perpetuity is a very long time! Time is the scarce resource in our information age

Digital Preservation

the time to take action is short

those actions are continuous over time

Strategic Time Problems:

Perpetuity is a very long time!

Time is the scarce resource in our information age

The Attention Economy An economic measure of the information age: America’s industrial output weighs (literally) about the same as it did 100 years ago. Even though real GDP (Gross Domestic Product) is 20 times higher. This reflects the higher knowledge content of contemporary goods and services. The Attention Economy “ iPod therefore iAm” Cover headline, Newsweek July 26, 2004 issue Information has to be selected or discarded, read or not read, but it cannot readily be ignored. There is a deficit of attention.

An economic measure of the information age:

America’s industrial output weighs (literally) about the same as it did 100 years ago.

Even though real GDP (Gross Domestic Product) is 20 times higher.

This reflects the higher knowledge content of contemporary goods and services.

The Attention Economy

“ iPod therefore iAm”

Cover headline, Newsweek July 26, 2004 issue

Information has to be selected or discarded, read or not read, but it cannot readily be ignored. There is a deficit of attention.

What does this mean for our future? Attention is vital to economic sustainability Therefore access is valued more than preservation by our consumers who are ultimately our benefactors Without access there are very few long term preservation strategies that will be economically sustainable The question remains: how do we think about financing digital preservation We should address: Our designated community Costs against the OAIS model

Attention is vital to economic sustainability

Therefore access is valued more than preservation by our consumers who are ultimately our benefactors

Without access there are very few long term preservation strategies that will be economically sustainable

The question remains: how do we think about financing digital preservation

We should address:

Our designated community

Costs against the OAIS model

Tools for financing digital preservation Cost model Business model Costs and OAIS Balancing costs with benefits and institutional mission Risk management Levers to get your way

Cost model

Business model

Costs and OAIS

Balancing costs with benefits and institutional mission

Risk management

Levers to get your way

Cost and business models What is a cost model? A framework in which all costs can be recorded and allocated or apportioned to specific activities. Essential to enable the costs of providing a service to be calculated. What is a business model? A model of how the service functions and the method by which it can sustain itself. It involves both strategy and implementation.

What is a cost model?

A framework in which all costs can be recorded and allocated or apportioned to specific activities. Essential to enable the costs of providing a service to be calculated.

What is a business model?

A model of how the service functions and the method by which it can sustain itself. It involves both strategy and implementation.

Cost and business models A cost model is essential to identify costs, but does not itself persuade stakeholders to necessarily invest time and resources. The business model and preservation plan serve the purpose of persuasion and clear planning. Calculating costs must take place in a realistic context Costs need to consider the strategic context & designated community Holistic lifecycle approach Helen Shenton, “Life cycle collection management," LIBER quarterly, 63 (Sept. 2002): 388-404.

A cost model is essential to identify costs, but does not itself persuade stakeholders to necessarily invest time and resources.

The business model and preservation plan serve the purpose of persuasion and clear planning.

Calculating costs must take place in a realistic context

Costs need to consider the strategic context & designated community

Holistic lifecycle approach

Helen Shenton, “Life cycle collection management," LIBER quarterly, 63 (Sept. 2002): 388-404.

Cost and OAIS Data Management Administration Ingest Access Producer Consumer Preservation planning Management Ingest Ingest, Admin & Management: Measurable Relatively high cost Archival Storage: Easy to cost Relatively low cost Administration Management Preservation Planning: Lacks evidence base Very variable costs Preservation planning Data Management Access: Visible benefit Potentially high cost Access Slide developed by Simon Tanner (KDCS) & Maggie Jones (DPC) Archival Storage KJN KJN Archival Storage

Ingest, Admin & Management:

Measurable

Relatively high cost

Archival Storage:

Easy to cost

Relatively low cost

Preservation Planning:

Lacks evidence base

Very variable costs

Access:

Visible benefit

Potentially high cost

Lifecycle costs and business models Two key developments from the UK. ESPIDA: a model to help make business cases for intangible assets and activities. http://www.gla.ac.uk/espida/index.shtml LIFE: a methodology and formula for costing life of e-journals, including preservation. http:// www.life.ac.uk /

Two key developments from the UK.

ESPIDA: a model to help make business cases for intangible assets and activities.

http://www.gla.ac.uk/espida/index.shtml

LIFE: a methodology and formula for costing life of e-journals, including preservation.

http:// www.life.ac.uk /

LIFE: Life Cycle Information for E-Literature LIFE found that in the first year of a digital asset’s existence; The lifecycle cost for a hand-held serial is £19 The lifecycle cost for a new website is £21 The lifecycle cost for an e-journal is £206 LIFE further predicts that in the 10th year of the same digital assets’ existence; The total lifecycle cost for a hand-held serial is £14 per issue The total lifecycle cost for a new website is £6,800 The total lifecycle cost for an e-journal is £3,000 Final report states that it “is in this predictive work that further research is required.”

LIFE found that in the first year of a digital asset’s existence;

The lifecycle cost for a hand-held serial is £19

The lifecycle cost for a new website is £21

The lifecycle cost for an e-journal is £206

LIFE further predicts that in the 10th year of the same digital assets’ existence;

The total lifecycle cost for a hand-held serial is £14 per issue

The total lifecycle cost for a new website is £6,800

The total lifecycle cost for an e-journal is £3,000

Final report states that it “is in this predictive work that further research is required.”

Balancing costs, benefits and mission Balanced Scorecard approach

eSPIDA approach

Risk management Essential to quantify the consequences and risk of loss of digital materials. Risk consequence is hard to define in the digital environment the volume is enormous so selection is essential previously information sources self selected through format, durability and luck – digital conveys none of these advantages selection assumes precognition of future significance Consequences matter more than risk in planning a way forward and making a case!

Essential to quantify the consequences and risk of loss of digital materials.

Risk consequence is hard to define in the digital environment

the volume is enormous so selection is essential

previously information sources self selected through format, durability and luck – digital conveys none of these advantages

selection assumes precognition of future significance

Consequences matter more than risk in planning a way forward and making a case!

Risk management: consequences count high risk low consequence high risk high consequence low risk low consequence low risk high consequence Consequences Risks low risk high consequence We have no future because our present is too volatile. We have only risk management. The spinning of the given moment’s scenarios. William Gibson, Pattern Recognition, 2003

Where will it hurt? Top Pain Points in Long-Term Digital Retention’ in Storage Networking Industry Association (2007) 100 Year Archive Requirements Survey: www.snia-dmf.org/100year/

Justifying and building a case Identify the brief timeframe during which action can be taken Raise awareness of the increasing dependence on digital materials Produce evidence of the various cost elements Be persuasive Emphasise the strategic fit with current institutional goals Show a clear understanding of the relationship between cost and benefits Benefit the designated community and stakeholders

Identify the brief timeframe during which action can be taken

Raise awareness of the increasing dependence on digital materials

Produce evidence of the various cost elements

Be persuasive

Emphasise the strategic fit with current institutional goals

Show a clear understanding of the relationship between cost and benefits

Benefit the designated community and stakeholders

Levers: getting your way… Benefits Strategic fit/positioning Access Efficiency gains Opportunities for revenue Support to other revenue activities Support for stakeholders Support for staff Levers Legal accountability Risk consequences Ownership of problem Accountability for legacy expenditure Critical to institutional mission Slide developed by Maggie Jones (DPC) & Simon Tanner (KDCS)

Benefits

Strategic fit/positioning

Access

Efficiency gains

Opportunities for revenue

Support to other revenue activities

Support for stakeholders

Support for staff

Levers

Legal accountability

Risk consequences

Ownership of problem

Accountability for legacy expenditure

Critical to institutional mission

Making digital preservation affordable: Values and business models Simon Tanner Director King’s Digital Consultancy Services King’s College London [email_address]