electronic publishing and virtual libraries: issues and an agenda for the andrew w. mellon...

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Focus Section ELECTRONIC PUBLISHING ISSUES ANDREW Quandt is with The Andrew W. Mellon Foundation, and Princeton University, Department of Economics, Princeton, NJ 085% 1021, 609-258-4005, e-mail: <[email protected]. Acknowledgment: I am indebted to Richard Ekman for helpful comments and many productive conversations on the topic of this paper. All errors are obviously my own. AND VIRTUAL LIBRARIES: AND AN AGENDA FOR THE W. MELLON FOUNDATION Richard E. Quandt INTRODUCTION The economic position of research libraries, among which university libraries play a most prominent role, has been adversely affected by changes in the prices of materials purchased by libraries in the past ten to twenty years. Whatever the reasons for the unfavorable changes in the economics of libraries, it is clear that there is a significant danger that they will no longer be able to discharge their primary function of providing adequate information for teaching and scholarship. At the same time, massive changes have occurred in computer hardware and software and in the ease of electronic communication. The processing speeds and storage capacities of personal computers have increased by many orders of magnitude and the arrival of Unix-based RISC computers has revolutionized computing. Internet, a network of electronic networks, has become the prime mode of communication between computers, and has drastically reduced the cost and increased the convenience of electronic com- munication. The availability of fast computers and the ability to efficiently transmit large quantities of data between computers and the ability to scan and store images in bitmapped form, and the invention of HTML (Hypertext Markup Language) and World Wide Web browsers (such as Mosaic and Netscape), have allowed a vast increase in the amount of information that is -FOCUSSECTION:ELECTRONICPUBLISHINGANDVIRTUALLIBRARIES- SUMMER~!W~ 9

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Page 1: Electronic publishing and virtual libraries: Issues and an agenda for the Andrew W. Mellon foundation

Focus Section

ELECTRONIC PUBLISHING

ISSUES

ANDREW

Quandt is with The Andrew W. Mellon Foundation, and Princeton University, Department of Economics, Princeton, NJ 085% 102 1, 609-258-4005, e-mail: <[email protected].

Acknowledgment: I am indebted to Richard Ekman for helpful comments and many productive conversations on the topic of this paper. All errors are obviously my own.

AND VIRTUAL LIBRARIES:

AND AN AGENDA FOR THE

W. MELLON FOUNDATION

Richard E. Quandt

INTRODUCTION

The economic position of research libraries, among which university libraries play a most prominent role, has been adversely affected by changes in the prices of materials purchased by libraries in the past ten to twenty years. Whatever the reasons for the unfavorable changes in the economics of libraries, it is clear that there is a significant danger that they will no longer be able to discharge their primary function of providing adequate information for teaching and scholarship.

At the same time, massive changes have occurred in computer hardware and software and in the ease of electronic communication. The processing speeds and storage capacities of personal computers have increased by many orders of magnitude and the arrival of Unix-based RISC computers has revolutionized computing. Internet, a network of electronic networks, has become the prime mode of communication between computers, and has drastically reduced the cost and increased the convenience of electronic com- munication. The availability of fast computers and the ability to efficiently transmit large quantities of data between computers and the ability to scan and store images in bitmapped form, and the invention of HTML (Hypertext Markup Language) and World Wide Web browsers (such as Mosaic and Netscape), have allowed a vast increase in the amount of information that is

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potentially reachable and displayable from any one computer terminal.

It seems entirely possible that the computer and net- working revolution that has been an ongoing process for some years will be able to counter the unfavorable developments in the economic situation of research libraries relying primarily on traditional print-based materials. The final verdict on this question will not be brought in for some years, but tantalizing glimpses of the future have emerged,’ In the present paper we shall examine some of the reasons for the unfavorable shift in the economic situation of libraries, the promises of the new technologies, and the agenda of The Andrew W. Mellon Foundation in this area. In Section 2, we document the adverse changes faced by libraries. In Section 3, we consider some of the underlying causes of these changes. In Section 4, we discuss in broad terms the changes in technology, the changes in the functions of research libraries that need to be consid- ered in the light of technology, and the economic impli- cations or preconditions of the likely changes. Section 5, finally, details the Mellon Foundation’s initiatives in this area. Section 6 contains some brief conclusions.

THE ECONOMIC POSITION OF LIBRARIES

The current state and the recent history of American research libraries have been amply documented in Cummings, et al. (1992). While the numerical data cited below pertain only to American libraries, there is reason to believe that West European libraries have been subject to the same types of cost squeeze as have the American libraries. East European research librar- ies have had their own peculiar history; first, because 45 years of Communist domination has had an extremely deleterious effect on their acquisition of materials in the humanities and social sciences (and, a somewhat less damaging effect in the natural sciences), and secondly, because since the revolutions of 1989, East European governments have battled particularly severe budgetary problems, which have, not unexpect- edly, translated themselves into very sparse library budgets.

The history of American research libraries exhibited explosive growth in the number of volumes added in the period 1950-1970, but after 1970 the number of volumes added annually stabilized or even declined slightly.21n nominal terms, library expenditures increased 9.8 percent annually from 1952 to 1991, and in real terms they increased 4.3 percent annually. How- ever, these expenditures as a fraction of the educational

and general expenditures of universities actually

declined after 1979 from approximately 3.9 percent to 3.1 percent. Expenditures on materials, as a fraction of total library expenditures, have remained approxi- mately constant during the last three decades and expenditures on staffing have declined slightly in the same period, but expenditures on serials have been an increasing fraction of total expenditures on materials.

Nominal expenditures for materials have, of course, increased, and primary responsibility for this is the

increase in the prices of library materials, particularly of serials. Since 1963, book prices rose annually at an average rate of 7.2 percent, while serials prices rose at

an annual rate of 11.3 percent. During the same period, the general price level, as measured by the GNP defla- tor, increased only 6.1 percent, indicating a substantial increase in the relative prices of journals. There is also substantial variation among journal prices and price increases, as well as among book prices and their price increases. As a general proposition, prices of books and serials in the sciences, technology, and medicine tend to be higher and increase faster than in the humanities and the social sciences. Cummings, et al. (1992) report

average 1990 serials prices in chemistry and physics to

be $412.66, in engineering $138.84, in political science $49.67, and in languages and literatures $30.63, with the rate of increase from 1982 to 1990 averaging in these four fields 131.9, 125.6, 91.9, and 58.0 percent respectively. Carpenter and Alexander (1994) give the corresponding average 1994 prices in these four fields as $678.03, $195.62, $70.50, and $39.72. Other authors report somewhat different figures (see, for example,

Ketcham and Born, 1994; and Lynden, 1993), but all are agreed that the rate of increase has been substantial and greatest in the science and technology areas. The response to this from 1986 to 1992, among libraries that are members of the Association of Research

Libraries, has been a decline in the the number of seri- als titles purchased (2 percent), monograph volumes

purchased (15 percent), an increase in expenditures on serials that nearly matches the increase in their unit

costs (70 versus 72 percent) and a 25 percent increase in expenditures on monographs. Some individual libraries have responded with substantial journal can- cellations worth several hundred thousand dollars (Thatcher, 1993).

These are clearly very serious developments and threaten the libraries’ abilities to serve the needs of the scholarly community in the accustomed fashion. Since library budgets are unlikely to increase in proportion to the price increases, and since economies in other

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library areas, such as reductions in staff and services, are unlikely to be sufficient, the only solutions in the traditional framework are (1) to place greater reliance on interlibrary loans and commercial document deliv- ery services, and (2) to buy fewer monographs and fewer serials. Interlibrary lending and borrowing have been substantial and have grown fast: among academic libraries, lending accounted for 8 million items in 1992 and borrowing for 5.3 million, and the annual growth since 1988 in these two categories was between 9 and 10 percent (Kyrillidou, 1995). But interlibrary loans tend to be time consuming and are also costly. Miller and Tegler (1988) compare the speed of delivery of requested items among various types of suppliers: uni- versities with a courier-type delivery system, libraries that participate in the OCLC interlibrary loan sub- system, database-specific commercial suppliers, gen- eral commercial suppliers, and local suppliers. They find that generally commercial delivery systems are slower than noncommercial ones, but even in the first group, which provided the fastest delivery, the median delivery time was 12.5 days. As far as the costs of inter- library loan transactions are concerned, an ARL study has found that costs range from $9.84 to $30.27 per item for borrowing and from $6.29 to $17.49 per item for lending. Both the cost and the time required for completing such transactions suggests that interlibrary loan and commercial document delivery are not likely to play an effective role in counteracting the cost increases in library materials.3

It seems plausible, therefore, that interlibrary loans and other document delivery systems will not be able to counteract the effects of the monograph and serials price increases. The only option libraries may have is to reduce their purchases of library materials. But that will not only reduce the libraries’ ability to serve the needs of the scholarly community, but it may well dete- riorate the atmosphere within the scholarly communi- ties, as the uneven incidence of price increases among the various disciplines induces libraries to change the traditional proportions of library budgets allocated to the various fields.

THE CAUSES OFPRICEINCREASES

Before we turn to the discussion of the promise of the new technologies, it may be useful to reflect on the causes of the price increases in the last few decades. There is, obviously, no single cause and no universal explanation. But a variety of studies have established a number of statistical regularities concerning price

increases, and perceptive speculation about the motiva- tions for and institutions participating in scholarly pub- lishing have considerably advanced our understanding of the underlying factors.

Some basic statistical facts are given by Petersen (1989, 1990). The average one-year library price of a random sample of scholarly journals depends on the field of the journal (highest in the physical sciences, lowest in the social sciences and humanities, in between for the biological sciences), the type of pub- lisher (highest for commercial publishers, lowest for government or nonprofit publishers, in between for academic society publishers), on the country of origin (highest for continental Europe, lowest for the U.S., in between for great Britain and other countries), and on the volume of circulation (with price being monotoni- cally higher the lower the circulation). He estimates several slightly different cross-sectional linear regres- sion models4 in which the subscription price is regressed on the following independent variables: the number of issues per year, circulation, a dummy vari- able with values of 0 or 1 indicating the absence or presence of photographs or graphs in the journal, a dummy variable measuring the presence or absence of advertising in the journal, the number of pages per year, the number of years that the journal has existed, a dummy variable measuring whether the journal is pub- lished by a for-profit firm or not, dummy variables measuring the discipline of the journal, and dummy variables measuring the geographic origin of the jour- nal. About 55 percent of the total variation in the dependent variable is explained in the regression and most variables are statistically significant at least at the 0.05 level. (Not significant are the coefficients associ- ated with the variables measuring the presence of graphs and photographs, the presence of advertising, and the dummy variable for the biological sciences.) An additional issue adds $15.15 to the annual price of the journal, an additional page in the published journal adds $0.07, one additional copy in circulation reduces price by $0.005, an additional year of existence reduces the annual price by $0.92, and being published by a commercial publisher adds $102.45 to the annual sub- scription price, while being published in continental Europe adds an average of $303.45 to the price. Most of these findings are entirely compatible with crude observations of the data and with intuition, and we should note that the negative sign associated with the age of a journal is plausible, because newer journals may face higher operating costs and need to survive in

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an environment characterized by competition from older, established journals.

Chressanthis and Chressanthis (1994b) estimate a similar model, but also include as a potentially impor- tant explanatory variable the quality of the journal, measured in six different ways. Some of the alternative quality measures are the total number of citations to articles in the journal; the “half-life” of journal articles, which is measured by the length of the most recent period accounting for one half of the citations of that journal; the “immediacy factor,” which is measured by the ratio of the citations of the journal in a given year divided by the number of articles appearing in it in that year; and the “impact factor,” defined as the average number of times that articles appearing in the journal during the two years preceding a given year are cited in the given year. They also include in the regression the subscription price that individual subscribers have to pay, The results are somewhat different from those found by Petersen: the presence of illustrations now has a significant positive effect on price and the fre- quency of journal issues does not have a significant effect. The various journal-quality measures do not produce a consistent result. But in important respects, there is some broad confirmation of the previous results: an additional copy in circulation reduces the price by $0.002, and additional year of age reduces it by $0.53, and an additional page per annum increases price by $0.023. These figures are about two to three times as high as the corresponding figures obtained by Petersen, but are all of the same orders of magnitude, which is a comforting finding, since they are obtained from an entirely different dataset and use regression equations with differing independent variable sets. They also find that not-for-profit status reduces the price of the journal. In a different version of this model, they also introduce foreign exchange risk which is based on the standard deviation of monthly foreign exchange rates. In this version, the quality of the jour- nal becomes significant (the “better” the journal, the higher the price it can command) and foreign exchange risk is positively related to price as well.

Apart from obvious factors such as the effect of the number of pages in a journal or the presence of diffi- cult-to-typeset materials, what does this tell us? There is a consistent effect that for-profit publishers charge a higher price than not-for-profit publishers, that conti- nental European publishers charge a higher price than others, and that low-circulation journals as well as high-prestige journals are more expensive. The first of these findings tends to be the source of the frequently

heard view that characterizes for-profit publishers as villains who reap monopoly profits at the expense of university libraries. European journals may be more expensive because there are fewer university publish- ers of journals there, and also because the journal price a publisher sets for the following year has to protect him against unexpected currency fluctuations; hence the price charged may incorporate a margin of protec- tion against declines of the dollar. Casual observation suggests that three West European publishers (Elsevier, Springer Verlag, and Kluwer) have a highly dominant position in science journals, which undoubt- edly also confers upon them some monopoly power and makes it easier for them to price-discriminate between libraries on the one hand and individual sub- scriptions on the other. But low circulation is also a powerful factor in raising prices: low circulation jour- nals are undoubtedly more expensive than high circula- tion journals, because the costs of producing a journal can be decomposed into “first copy costs,” such as, those costs that must be incurred even to produce a sin- gle copy of the journal, and “additional copy costs.” If circulation is low, first copy costs account for a rela- tively high proportion of total costs, and if price is set by adding to costs a desired profit and dividing the total by the expected circulation, each copy of the journal will have to bear a larger fraction of first copy costs than when circulation is large. Finally, if a journal has high quality, it confers “scarcity rents” upon its pub- lisher, for instance, the publisher can exact a higher price for it.

While it is easy to jump to the conclusion that jour- nal publishers, or at least commercial journal publish- ers, exploit the relative inelasticity of demand and raise prices to obtain monopoly profits, this view is some- what simplistic, because it does not ask the fundamen- tal question of why the circulation of some journals is high and of others low. The Noll-Steimnueller (1992) model attributes substantial responsibility for this vari- ation to academics and scholars themselves. According to this model, the initial pressure comes from academ- ics who are seeking journal outlets for their articles. Since at American universities promotion and salary decisions are based, at least in part, on the publication record of the scholar, there is high payoff to publishing in the most prestigious journals. But because of limited space in a journal, many excellent articles cannot be published in the most prestigious journals. This induces both publishers and scholars to create new publishing outlets. But it is extremely difficult to create first-rate, new, and general journals, such as journals that are not

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only top-notch in quality, but also appeal to a wide pro- fessional audience. The easier course of action is to cre- ate rather more specialized journals. Such a new journal may well have the desired quality characteris- tics, but is almost certainly going to appeal to a nar- rower audience.

An interesting example of this phenomenon is pro- vided by the field of economics. In the 194Os, Econo- metrica served economists who wanted to publish articles dealing with econometrics and mathematical economics in a first-rate journal. Subsequently, the Journal of Econometrics was created to appeal to the specialized interests of econometricians and the Jour- nal of Economic Theory and the Journal of Mathemat- ical Economics were created for those interested in mathematical economics. Still later, the Journal of Econometrics was followed by three even more spe- cialized econometric journals, namely the Journal of Econometric Theory, the Journal of Applied Econo- metrics, and Econometric Reviews, to cater to various subpopulations in the field of econometrics. In any event, as we indicated above, if circulation is smaller, first-copy costs are going to be a larger fraction of aver- age cost per copy and the price is likely to be much higher. Hence the mechanism by which academic advancement occurs may have a significant role to play in raising the prices of journals.

First-copy costs may also play a significant role through a related, albeit somewhat different mecha- nism (Quandt, 1994). Imagine that there is an initial equilibrium in which all libraries are content with the subscriptions that they have, and all publishers are making a sufficient profit (if they are profit-seeking) or are breaking even (if they are not-for-profit), and so stay in business. Under these conditions, nothing needs to change. If now there should be an exogenous change in the publishers’ costs (for example, caused by an increase in wages), publishers would be tempted to increase subscription prices. But at the higher prices, not all libraries will be able to continue to subscribe to all the journals for which they currently subscribe. Hence, some subscriptions will be cancelled; but the moment that this occurs, the prices charged by the pub- lishers before the cancellations is no longer the “cor- rect” price. With a smaller circulation, the price must cover a larger share of first-copy costs, and hence prices will tend to rise again. That, in turn, may cause more cancellations, and so on. Simulation experiments show that the subsequent adjustments diminish in mag- nitude and the process eventually converges to a new equilibrium, but at the cost of sizeable cancellations in

the aggregate, which is also accompanied by consider- able increases in prices.

One might well ask why competition from low-cost or not-for-profit publishers of scholarly journals does not prevent the proliferation of highly specialized, low- circulation, and expensive journals. Two circum- stances are worth mentioning. First, journals are not homogenous goods, so that the “law of one price” would have to prevail. They are highly differentiated products, and the industry which produces them is monopolistically competitive; it is emphatically not the case that journals are largely substitutes for one another. If a new journal in econometrics were to appear, it would not be the case that libraries typically cancel their subscription to an existing econometrics journal so that they can subscribe to the new one. The mere appearance of a new journal makes it necessary for research libraries to subscribe to it. A second, and related, factor is that university faculties have a sub- stantial influence on what university libraries buy, and the faculties are largely insulated from the economic impact of their recommendations. Their interest is to have the library subscribe to everything that they might conceivably need, and hence university faculties (and, therefore, libraries) tend to operate on the “just-in- case” principle; that is to say, they acquire materials just-in-case it might be needed by somebody at some time.

This is not to say that competition has no beneficial effects. There clearly are marginal libraries that do not purchase everything, and may very well take relative prices into some account in deciding on their subscrip- tions. But perhaps the most important influence on publishers will come from the increasing awareness of the economic plight of libraries and universities and from the conscious efforts of libraries to provide alter- native modes of access to scholarly materials.

'J~CHNOLOGY,ECONOMICS,AND

RESEARCHLIBRARIES

~CHNOLOGY

Since the ultimate purpose of research libraries has to be the provision of scholarly information, the quality of a library must be measured not so much by the phys- ical objects within its walls, but by the ease with which it permits access to relevant scholarly materials. Before the advent of the electronic age, the number and variety of books and journals in a library and the effectiveness, clarity, flexibility of its classification and cataloging

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schemes might have been reasonable proxies for qual- ity. The first step in improving access in the electronic age was probably the introduction of integrated library automation software that enhanced ease of access for all library users by automating bibliographic searches, circulation, cataloging, acquisitions, and other library functions.

Two particular developments have made new library technologies feasible. The first of these is electronic networking, using the TCP/IP protocol, which is widely used by computer sites connected to Internet. TCP/IP uses packet-switching technology that is dras- tically different from telephone voice communication. (The latter employs dedicated connections between two communicating stations.) Packet switching, instead, breaks messages into individual packets (of approximately 1,500 bytes on the average), and the individual packets of a message may take different paths from source to destination, which permits extremely efficient use of physical communication lines (MacKie-Mason and Varian, 1993).

Internet transmission is fast and inexpensive and the successor to the TCP/IP protocol (ATM or Asynchro- nous Transfer Mode) will permit transmission capabil- ities of 622 Mbits/second. The cost of transmission has declined drastically over the years: M&e-Mason and Varian report that communication costs per one million bits has declined from $1 in 1960 to $0.00094 in 1992, and the cost of routers (per million bits transmitted) has declined from $10 in 1962 to $0.00007 in 1992. The second development was the introduction of the optical compact disk, capable of storing some 500-600 mega- bytes of information. I think it is fair to say that elec- tronic communication via the Internet holds out, at present, a greater long-term promise than CD-ROM based electronic communication, but in the short-run not all institutions will be connected to Internet with adequately large bandwidth, and hence CD-ROMs will continue to play an important role for the foreseeable future. These breakthroughs permit scholarly informa- tion to be made available rapidly and in large, some- times comprehensive volume, without the use of physical books. To the extent that these modes of accessing scholarly information are available, the con- cept of the library changes from that of a physical entity with a physical inventory of materials to one that is glo- bal, in the sense that materials from arbitrary sources can be accessed, and virtual, in that access no longer requires physical possession of an item. With a global system of information sources, libraries no longer need to apply the acquisition principle of “just in case,” but

can deliver information “just in time,” such as being entirely driven by actual demand rather than by the demand that might be anticipated to occur at some time in the future.

COPYRIGHT ISSUES AND LICENSING

With the emergence of electronic reproduction of works, as well as of electronic creation of original works, the issue of copyright protection for the owners of intellectual property has become an important issue addressed by numerous authors (see, for example, Ginsburg, 1993, Bennett, 1994, Lyman, 1995). Copy- right protection pertains to the unauthorized reproduc- tion of works, and not to the physical objects; thus no copyright issues are raised by libraries acquiring books and making them available for the reading public. Moreover, copyright, most recently embodied in the US in the Copyright Act of 1976, provides important exemptions for noncommercial activities characterized by “fair use,” such as research and teaching, and archi- val reproductions (for, say, damaged items that cannot be replaced at reasonable cost). Copyright attempts to provide a balance between the interests of the owner of the intellectual property and the public at large, and may provide much better protection of the interests of the public than might be the case if access to intellec- tual property were always governed by private con- tracts permitting no exemptions.

Scanning printed works and creating bitmapped ver- sions of them, or converting these to ASCII form, does constitute reproduction, but is likely to be protected under the archival reproduction exemption of the law (Ginsburg, 1993, p. 56). But what is almost certainly not permitted under the exemptions is making such copies available to several simultaneous readers on their terminals. Hence libraries and other providers of electronic texts will have to secure permission from the copyright holders for all the activities that users can engage in, such as, displaying text on their screens, downloading, printing, and so on. Suitable licensing arrangements that protect the economic interests of the owners of the intellectual property will be necessary and at the same time permit the public to access infor- mation in the new and powerful ways that have become available. It should be noted that while negotiating licenses will be straightforward in some cases, as in the case of a single electronic journal that a library wants to make available to its readers, it may be extremely com- plicated and time consuming in other cases, such as when a university creates a multimedia product with

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hundreds or thousands of sources for the materials that are included in the product.

It is clear, at least in some contexts, that enforcement will be difficult. While network-distributed products can be restricted to a specified number of simultaneous users-exactly as in the case of software products available on networks-this may be more difficult in the case of CD-ROM-based products that can be cop- ied. Vendors will have to address these issues explicitly when CD-ROMs are intended to be made available on a network. A particular case in point is the HUSLO- NET project, funded by the Mellon Foundation, which is a consortium of Hungarian and Slovak universities created for the purpose of sharing CD-ROM databases: it became clear when the consortium requested vendor quotes for wide area network licenses that several ven- dors had not previously entertained the possibility of wide area network sharing their products.

While the virtual library concept may suggest that in the future there will be no need for “physical” libraries, particularly because individuals may purchase licenses directly from vendors of electronic materials, it seems fairly clear that a world without library entities would not be in the interests of the reading public. The mar- ginal cost of providing a single access to a particular work is or is near zero; hence, optimality in pricing requires a zero price, which would not permit vendors to survive. But if each access is priced at, say, average cost, accesses by the public will tend to be discouraged. The more reasonable solution then is for libraries to purchase site licenses for particular works, which per- mit free, unlimited viewing, downloading, and printing by readers, and the price of which will have to be set in the aggregate in such a manner as to ensure vendors a reasonable revenue and profit without bankrupting library budgets.

THEECONOMICS OF ELECTRONICPUBLISHING

One of the most complex and least studied questions is the question of the economics, broadly understood, of the electronic publishing field. It is the fundamental issue that will determine how and how much vendors will want to charge for licenses that permit access to their product and that will also decide whether the eco- nomic situation of libraries will be improved by increasing the share of electronic library materials in the mix of materials they purchase.

In order to begin to grapple with these questions, we obviously have to be prepared to measure the costs of producing electronic library materials and the demand

for these materials. Thus far, not even the costs have been measured adequately. Clearly, the costs will depend on the type of product, that is to say, whether it is an electronic journal, or a monograph, or a database (perhaps a citation index or a collection of journal abstracts), or a special-purpose multimedia product (perhaps one that combines musical scores with musi- cal performances and access to critical literature at the same time). There are costs for the vendors or preparers of these products and they might consist of standard costs that any scientific journal has to incur, such as costs of editing, refereeing, layout and composition, although the latter may become less expensive if an electronic journal requires that articles be submitted in a standard format in some high-level language such as TEX or LATEX. Other costs are computer and network costs. It is, of course, important in calculating the annual cost of operating such a journal to include not the original purchase cost of equipment, but the annu- alized value of an infinite stream of capital costs repre- senting periodic replacement of obsolete equipment. There may be nonrecurring setup and programming costs and there may be continuing costs of storing and archiving the journal. Most importantly, one should note that many of the early efforts to create electronic journals relied on the volunteer labor of enthusiastic faculty members, on space “borrowed” from some other university activity, and on equipment originally purchased for some other purpose, but which had some excess capacity that could be used for creating an elec- tronic journal. Unless one is careful, one might fail to include all these costs that properly belong in the cost calculation. In evaluating the relative advantages of electronic publications, one needs to know whether first-copy costs for traditional and electronic journals and books differ appreciably from one another, and whether costs in general depend on the field in which a journal or book is published. I may mention that fairly crude estimates to date suggest that the cost of produc- ing an electronic journal can range from 50 to 90 per- cent of the cost of a traditional paper journal, but we have no firm measurements of this as yet. We also need to point out a particularly vexing problem in the mea- surement of costs, namely the circumstance in which two different activities (or “outputs”) share some costs, as is the case when a paper version and an electronic version of the same journal are produced. In such cases it may be difficult or impossible to attribute a cost item to one or the other activity, as in the case of costs of edi- torial or refereeing activities, which benefit both ver- sions of the journal. Finally, even if we know the costs

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that the vendor of the product incurs, we need to ascer- tain the costs that a library will have to cover in order to make the product available. This may require investing in (and periodically replacing) servers and terminals, some staff time, and will surely require the payment of license fees.

Complicated as the cost picture may be, the demand side of electronic products is even more difficult to estimate. The prime difficulty stems from the fact that the electronic product is, at least in comparison with traditional library materials, a new product; that is to say, it has characteristics of access and internal organi- zation that may be radically different from print-based materials. Econometric approaches are well developed for estimating the demand for given products, but face greater difficulties in estimating the demand for prod- ucts with as yet untested combinations of characteris- tics.5 These characteristics are design features in new electronic products, and while the scholarly commu- nity’s preferences over, say, journal characteristics may well change over time as a result of what is avail- able, the publisher of a new electronic product may dis- regard preferences at his/her own peril. A recent study (Schauder, 1994) reports, for example, the results of an extensive survey of academics conducted in 1992, which revealed that the prestige of a journal was much more important than the speed of accepting articles, that the peer review system was important, that an elec- tronic delivery of a print-based article should retain the presentation style of the original, and so on.

Electronic library materials clearly have some signif- icant advantages over print-based materials. While we defer to the next section a more detailed description of particular products, we can anticipate some of the most important advantages as follows: (1) Electronic materi- als are accessible with great ease from many locations; (2) They are often combined with powerful search engines; (3) They permit easier and faster browsing than print-based materials; (4) They save physical space, both in the library and in the scholars study; (5) When rare and perishable materials are scanned and made available electronically, electronic access saves wear and tear of the originals; (6) They often represent a sig- nificantly improved product for teaching and scholar- ship over what print-based materials can offer, particularly when related materials are bundled together by hypertext links, as is often the case in multimedia approaches. All these advantages, but perhaps most par- ticularly the latter, also point to a special difficulty in assessing the economic promise of electronic library materials. If the product is different, and in fact better,

can we complain if it also costs more? Are we entitled to complain if our new Mercedes costs more than our old Lada? While the answer has to be in the negative, we must recognize that the libraries’ economic problems will not be solved if every new electronic product deliv- ers more, but also costs more. The creators of these products tend to have a wonderful and enthusiastic tech- nological vision that may not take the cost side suffi- ciently seriously. The fact is that the electronic age must lower some costs, or the new technology will have failed to live up to its promise.

It is not surprising that publishers exhibit a certain nervousness in response to the academic community’s demands that books and journals become available electronically, and that they be shared not only by many individuals under site license arrangements, but per- haps also by many institutions under wide-area site licenses. They fear that the ease of access to the elec- tronic products will cut into their profits, and there are some indications that electronic journals produced by commercial publishers may even be priced higher than the corresponding paper product. But as is argued by Varian (1995), the sharing of a smaller number of avail- able copies of a product among many more individuals (as is done by lending libraries, video stores, and the like) need not be done at the expense of profits. In fact, sharing will increase profits if the marginal cost of pro- ducing the book is relatively large compared with the transaction cost of accessing it through a shared envi- ronment. An additional route to increased profits exists when consumers have heterogenous tastes. In this situ- ation rich consumers may want to own the product and poor ones may be willing to access it by sharing with others; without the latter mechanism, large numbers of consumers may drop out of the market. The fear that sharing library materials will encroach on profits may therefore be unjustified and suggests that careful stud- ies of marginal costs of production and of transaction costs may well allay publishers’ fears.

Electronic products clearly also have some disad- vantages. The most obvious one is that you need equip- ment to access them: it is difficult to access them if you are lying in bed, travelling in a car or train or airplane, or going to work on the underground. You do have to learn a few new skills to be able to access them, and in some fields, perhaps particularly in the humanities, scholars may have a reluctance to change their old method of working. Other disadvantages are that spe- cial attention may have to be paid to archiving and to refreshing archival materials. Special attention also has to be paid to authentication of materials because of the

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ease with which computer records can be created in comparison with print-based records. Finally, and this may be more of a question than an outright disadvan- tage, it is not clear yet that the acceptance of electronic materials by the scholarly community will be suffi- ciently general so as to make electronic products equiv- alent in scholarly weight to the traditional materials and that, for example, publication in electronic journals will be regarded by university personnel committees to represent the same scholarly achievement as publica- tion in paper journals. There is not much evidence to date that promotion and tenure guidelines have been modified in response to the appearance of electronic publications, and a recent survey found only a single university document that specifically mentioned elec- tronic publishing in connection with tenure consider- ations (Cronin and Overfelt, 1995).

All these advantages and disadvantages together will determine what the demand for an electronic prod- uct will be, what price or license the vendor will be able to charge for it, and which products are worth develop- ing and which ones are not. Licensing arrangements can be flexible, perhaps more so than in the case of print-based products, and site license fees can be adjusted to reflect the size of the institution and the number of simultaneous accesses that need to be guar- anteed. But whatever the price and the licensing arrangements, it is important that not-for-profit ven- dors break even. But what about commercial vendors? Clearly they cannot exist unless there are profitable opportunities in the electronic publishing field. While in the short-run, their pricing behavior is likely to exert an important influence in the market place, in the long- run, this is not altogether clear. In some ways and in some fields electronic publishing is so easy and cheap, and so easily undertaken by the individual scholar, that there may not be room for publishers, above all com- mercial ones, in the future (see, for example, Okerson and O’Donnell, 1995).6

In fact, if the electronic environment becomes dom- inant, and it exhibits all the signs that this is indeed the case, the functions of traditional agents in the informa- tion provision field will change; the demarcation lines between scholars, publishers, computing center, and libraries are likely to become increasingly blurred; and the nature of teaching and learning will be markedly transformed. Scholars themselves may assume some of the functions of publishers, while libraries will become less important as depositories of materials and more important as gateways to the rest of the world, with librarians performing the functions of navigators.

Acquisitions budgets will no longer be based on the assumption that only print-based materials need to be acquired, and librarians may decide to discard large volumes of print-based materials that become available in electronic form. In fact, to the extent that librarians are able to persuade themselves that old (not rare) material that has been digitized can be safely discarded, future savings in construction costs may well tip the balance in favor of the electronic approach. Finally, as easily accessed resources multiply and multimedia approaches permit students to navigate seamlessly in an ocean of knowledge, “resource-based learning” will replace the more traditional forms and students will be able to chart their own paths through the learning pro- cess (O’Donnell, 1995).

A MELLON FOUNDATION AGENDA

GENERAL CONSIDERATIONS

The Foundation’s objective is to assist the adoption of new technologies for acquiring, storing, and dissem- inating scholarly information. The greatest emphasis is placed on concrete, practical, and cost-saving projects, while leaving a little room for exploring more visionary projects with less well-defined payoffs in the short-run. In any event, it was intended from the beginning that projects would largely use existing hardware and soft- ware technologies, rather than concentrate on inventing brand-new technologies (such as designing new types of chips). In all projects funded by the Foundation, grantees must pay considerable attention to the eco- nomics of the project, that is to say to the cost side as well as to the demand side. This requires that project personnel carefully track the evolution of costs and of usage of old and new ways of providing and accessing scholarly information.

It is quite clear that, at least in principle, total as well as unit costs will tend to vary according to the type of product that is made available electronically and usage patters are likely to depend on the type of audience that a particular product is intended to appeal to.7 No complete picture about the economics of elec- tronic libraries is likely to emerge unless projects funded by the Foundation are selected with some suit- able diversification in mind. Ideally, diversification might occur along the following dimensions. (1) Some projects might emphasize network-based distribution of products, while others might avail themselves of stand-alone (e.g., CD-ROM) technologies. (2) Projects might be diversified by the nature of the agency carry-

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ing out the project, for example, university library, university press, professional association, commercial press, etc. (3) Projects might well differ among them- selves in terms of the intended target audience; hence some might concentrate on projects in the scientific fields, while others might deal with humanistic disci- plines. (4) Some diversification may be desirable according to whether the electronic product is or is not parallelled by a paper-based product. (5) Finally, since most-if not all-projects will have to deal with the question of how to price the product, it may be desir- able to diversify according to the pricing scheme employed.

It is, of course, entirely clear that one cannot hope to achieve a completely orthogonal experimental design. Projects come to the attention of the Foundation with some particular configuration of characteristics, and the only significant influence that the Foundation has on the overall design is the choices it makes in what projects to fund or not to fund.

DETAILS OFPROJECTS

The present subsection shall briefly discuss in chro- nological order each of the projects that the Foundation has funded to date. (A listing of the projects appears in the Appendix.) In most instances the amount of the grant is less, and in some cases substantially less, than the total cost of the project. We should also note that in general, that while no specific mention is made in the description of the projects of the details of the cost and usage monitoring that will be undertaken, every one of the projects has built into it a rather elaborate mecha- nism for generating data that will ultimately be useful for assessing the costs of such projects and the demand for their products.

. Massachusetts Institute of Technology (MIT). The project consists of creating an exclusively electronic journal, The Chicago Journal of Theo- retical Computer Science. It will be carried out by MIT Press, with the assistance of the MIT librar- ies, and it is anticipated that the new electronic journal will provide useful competition for other journals in the field and render a significant ser- vice to the profession.

Articles intended for the journal will have to be submitted in LaTex and will be refereed by a dis- tinguished board of editors. Accepted articles will be placed on MIT’s server and all subscribers will be notified of the existence of new articles. They

will then be able to retrieve these in several ways. Articles in the archive will be retrievable through ftp, gopher, Mosaic, Netscape, and so on. MIT Press will insert pointers to subsequent relevant work in existing articles and will also maintain an unrefereed discussion group on computer science. Subscriptions will be $30 for individuals and $125 for libraries, with essentially no restrictions on how the published articles may be used.

l Bryn Mawr College. Bryn Mawr College fac- ulty, with assistance from faculty members at the University of Pennsylvania, have already been publishing two electronic review journals, namely the Bryn Mawr Classical Review (BMCR), since 1990, and the Bryn Mawr Medieval Review (BMMR), since 1993. BMCR is also published in paper form. Both of these electronic publications are devoted to book reviews and short discussions and are distributed free of charge via a LISTSERV in ASCII format when they become available. Bryn Mawr intends to improve the appearance of all the journals so as to make it possible to prop- erly display Greek characters, diagrams, and so forth. They also plan to make the corpus of mate- rial searchable and to link it to other types of pub- lications, tables of contents, and indexes. The contents of the journals will be encoded with the Standard Generalized Markup Language (SGML) as well as the Hypertext Markup Language (HTML). The encoded versions, as well as Post- script and the plain ASCII versions, will be made available on the World Wide Web.

. Johns Hopkins University. Johns Hopkins Uni- versity Press publishes forty scholarly journals, particularly in the humanities, and proposes to make all forty available on the Internet, with fully formatted text; subject, title, and author indexes; hypertext links to tables of contents, endnotes, and illustrations; and full searchability of both text and tables of contents. Some of the journals, such as Conjigurations, Modern Language Notes, and English Literary History are already available. The project, called Project Muse, differs from the earlier described MIT project in that all the jour- nals involved in the Johns Hopkins project are established and already distinguished journals. The goal of Project Muse is to make print and electronic versions of the journals available simul- taneously, with a pricing scheme that encourages subscribers to opt for the electronic version. The

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electronic version is likely to be offered at a cost of 90 percent of the print version, and both version for 130 percent of the print version. Eventually (but beyond the scope of the present project), the print version may be phased out altogether. One of the innovations of the project to date has been the development of software that converts composi- tor’s PostScript files, used in the production of the printed version, to HTML files.

l New York University (NYU). NYU proposes to implement a Fully Integrated Library Multimedia Information System. The university has long been in the vanguard of introducing library technology, and was one of the earliest institutions to develop a video production center, satellite teleconferenc- ing services, and access to multimedia resources from many locations on campus. NYU has con- tracted with GEAC to install a UNIX-based library information system with the potential for connection to a wide range of information resources through 239.50 search protocols. NYU will create a linked catalog and menu system that guides users among the different resources, including various image, sound, and video data- bases in addition to what is currently available, and will merge all these resources with catalogs, indexes, and full text access tools.

l Cornell University. Cornell is cooperating with the University of Michigan in the “Making of America” project. The project, which is cur- rently in a pilot phase, intends to preserve and make accessible through digital technology a sig- nificant volume of primary source material on the history of the United States. During the first phase, between 1,000 and 1,500 monographs and thirty and forty serial titles representin the period from 1850 to 1,900 will be scanned P and made available online across institutional boundaries. Eventually, the project is expected to cover 100,000 volumes of material relevant to the 1850- 1950 period. The project is facilitated by the fact that publications from this period are not covered by copyright protection. Most of the material is likely to be text, with small amounts of line art, and scanning will be done mostly from paper rather than microfilm. The digital library is also intended to be linked to the online catalogs of other universities.

l University of California. The project will be a cooperative one involving the University of Cali-

.

.

fomia Press and the Berkeley Library and intends to create a system for electronic publication of scholarly journals and monographs in the humani- ties. ‘live of these, Nineteenth Century Literature and Classical Antiquity, either are or will soon be available, while another seven journals and six- teen monographs will follow in the next five years. Search tools will be provided, and it is anticipated that the database will be useful for both teaching and research. Both paper and elec- tronic versions of these materials will be avail- able. The electronic version will account for 70 percent of the cost of the paper editions, and the combined electronic and paper versions are intended to be sold for 120 percent of the paper version. The digital library will be accessible at first from three, and later from all eight, campuses of the University of California. Other institutions are expected to gain access to the system in the near future.

Columbia University. Columbia will develop a comprehensive methodology for its ongoing activities in creating a digital library. At present, Columbia is making available or planning to make available in networked form within the Columbia community (1) reference works such as the Concise Columbia Encyclopedia, Granger’s Index to Poetry, the Columbia Dictio- nary of Quotations, and other works, (2) some 100 Oxford University press monographs, (3) selected high-use titles published by Simon and Schuster, and (4) various texts for the study of the humanities, such as Greek and Latin texts and pri- mary works in philosophy, religion, and history. Texts will be bitmapped and/or in ASCII format and also coded in SGML. Columbia has a particu- larly detailed plan for measuring the costs of the project and the usage that is made of the digital library. The university will also study issues of copyright and attempt to develop model agree- ments between publishers and digital libraries that reach a reasonable compromise between copy- right protection and user access.

Northwestern University. The Economics Department of Northwestern University will study economic models of the publishing industry and of the dissemination of scholarly learning in order to gain a better understanding of the economic fac- tors that determine the nature of equilibria in this industry.

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l JSTOR. A number of institutions are participat- ing in JSTOR, with the University of Michigan taking the lead role. The objective of the project is (initially) to make the entire backfile of five eco- nomics journals and five history journals avail- able in bitmapped form. In the initial pilot phase, five smaller institutions will be the users of the resulting electronic library; later, more institu- tions, journals, and fields will be added. In the pilot phase, 750,000 pages are being scanned. All the publishers of the journals have entered into an agreement with the Foundation to permit the elec- tronic distribution of their back copies up to 1990. It is hoped that eventually current copies will also be linked.

The project will make entire runs of journals for which they may not have print copies avail- able to individual institutions at a relatively mod- est cost. In addition, it will permit institutions that do have print copies of these journals to either move their print copies to remote and less expensive storage, or to get rid of them altogether, thus freeing up valuable space. It is easy to imag- ine that a substantial growth of this digital library may postpone new library building construction for a number of years.’

. Case Western Reserve University (CWRU). CWRU intends to create, in collaboration with the University of Akron (UA), a Chemical Sci- ences Virtual Library. CWRU subscribes to 443 chemical journals and UA to 393; but 297 of these journals are subscribed to by both institu- tions. The annual “budgetary overlap” of the sub- scriptions they have in common is $289,000. The objective of the proposed project is to realize sub- stantial savings in journal subscriptions by using existing campus communication networks to pro- vide virtually instantaneous access to the com- bined holdings of the two universities and to eliminate duplicate holdings of journals. Key ele- ments of the system will include a unified finder (the starting point of which may be Current Con- tents or the Science Citation Index), collections of journals and monographs stored on a variety of media, and a personal note-taking facility for users. Site licenses for including particular jour- nals and monographs will be sought from pub- lishers; it is anticipated that the savings will be less than the current budgetary overlap, since site licenses are likely to cost more than a single sub- scription but less than two subscriptions.

l Massachusettts Institute of Technology (MIT). MIT, in partnership with the Folger Shakespeare Library, intends to continue work on the Shakes- peare Electronic Archive. To date, this archive has entered into it (1) a contemporary edition of the complete plays, (2) an early edition of the plays using the Oxford Text Archive transcription of the First Folio and the pre-1623 Quartos, (3) digitized facsimiles of early editions of Hamlet, (4) nine- teen complete film performances on laserdisc, which are linked to the text of the plays, (5) digi- tized images of 250 art works relevant to Hamlet

fromthe 1700-1899 period, (6) commentaries and critical articles. The work to date also includes the production of software that permits electronic text to be connected precisely to the corresponding moment in the retrievable film performances. In the next phase, the project will link the Oxford Text Archive to the contemporary edition, add dig- itized versions of the folio and quart0 editions of Romeo and Juliet, Othello, and King Lear, add fourteen additional film performances, and improve the software. Perhaps most importantly, a digitized version of the most suitable copy of the First Folio (the Folger Library has approximately seventy copies) will also be added and linked to the ASCII version to enable searching the First Folio. In addition, all early editions will be entered, such as Quarto-1 (1603) and Quarto-2 (1604-1605), including copies owned by the Brit- ish Library, the Huntington Library, the Bodleian, Trinity College, Cambridge, Yale, and Wroclaw. Ultimately, but in the next phase, all the Folger First Folios (approximately 250,000 images) will be added to the Archive.

The material that the Archive will bring together into a single “product” has four important characteristics that make it especially valuable and that are likely to guide the Foundation in future multifaceted, multimedia projects: (1) the material is intellectually coherent, (2) it is the subject of active, current research, (3) it is physically dis- persed, and its provision in a unified framework is likely to lead to substantial avoided costs, and (4) incurred as well as avoided costs from creating and using the Archive are measurable.

It is anticipated that the Archive will become a major tool of Shakespearean scholarship that will save on the wear and tear of the originals and will permit access to an extraordinarily wide array of materials.

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l Emory University. Emory will cooperate with the Scholars Press to test the feasibility of elec- tronic journals in the field of religious studies. The journals to be included are Biblical Archeologist, Critical Review of Books in Religion, Journal of the American Academy of Religion, and Semeia. These journals will be produced electronically, in addition to their print-based versions, and will be made available by subscription to both individuals and libraries in a variety of formats (Internet, CD- ROM, and magnetic tape). Submission of papers, editing, and peer review will also be handled elec- tronically. During the initial phase of the project, even nonsubscribers will have free access to the journals.

l Associated Colleges of the South (ACS). The thirteen liberal-arts colleges comprising the ACS” have noted substantial overlaps in their holdings of journals and print and CD-ROM- based indexes. The project is aimed at reducing aggregate acqusitions costs by negotiating wide- area licenses with vendors of journals and indexes at more favorable prices than the sum of individ- ual subscriptions, and sharing such library materi- als over the Internet. The project also intends to extend previous regression studies of the determi- nants of the prices of journals by estimating the influence on prices of a dummy variable that mea- sures the availability of an electronic version of the journal.

CONCLUDINGCOMMENTS

It is too early in the history of the above projects to warrant more than very preliminary reflections. How- ever, we hazard the following observations.

1.

2.

3.

It is likely that substantial variation will exist in the operating costs of electronic journals, ranging from about 40 to 90 percent of the print-based ver- sion. While electronic submission of manuscripts (in a standard language, such as TEX or LATEX) and electronic refereeing will tend to save on costs, these techniques may leave editors burdened by having to “fix up” the authors’ TEX manuscripts. Brand-new electronic journals are likely to face the same difficulty in getting market acceptance, unless many excellent articles are published in them early in their life. Acceptance of electronic journals may be further impeded by the require-

ments they may place on libraries to acquire equipment and software to take advantage of par- ticular products. The lack of standardization of electronic products is particularly onerous for libraries that may have to acquire hardware and/ or software to cope with Postscript files, SGML files, DVI files, and so forth. At the same time, because of rapid technological developments, it is possible that premature standardization will tend to freeze practices in ultimately undesirable states.

4. Not much progress appears to have been made as yet in pricing electronic products, and in particular, in finding appropriate pricing formulas for consor- tial approaches to obtaining licenses or subscrip- tions. Consortia ought to be able to save money for their members, but at the same time publishers (particularly commercial publishers) will not let a larger consortium have a product for the same price as a smaller one. A ground rule ought to be that the marginal price for the (n + 1)st member of a consortium should be less than the average price for the first n members.”

5. Multimedia projects that digitize hard-to-access, rare materials can save on costs not only because it may be less expensive to operate the newer tech- nologies, but by providing a unified approach to accessing the materials, substantial costs normally incurred by scholars can be avoided. The measure- ment of these avoided costs is not a settled issue and will surely require estimates of the frequency that scholars have consulted the rare materials before digitizing occurred. It is plausible to sug- gest that a corpus of material is worth digitizing if it meets the following criteria: (a) the material must be intellectually coherent, (b) it must be the subject of active, current research, and (c) it should involve material that is physically dispersed. From the Foundation’s point of view, the fourth criterion would be that a suitable cost and access measure- ment procedure can be attached to the provision of the electronic product.

!&MARY

There is no doubt that the new electronic technolo- gies have made it possible to gain access to remote information resources in a hassle-free manner and to combine resources at various sites and in various forms for more effective and creative teaching and research. This breakthrough in communicating schol-

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arly information has already changed the ways in which teaching and research are undertaken. The question to which we do not as yet know the answer is whether all this can be accomplished within the budgets that research libraries are likely to have in the coming years. It is to be hoped that some of the projects described in the previous section will, in two to three years, begin to shed light on this important question.

APPENDIX: CIJMULATIVEGRANTSFORSCHOLARLY COMMIJNICATIONANDTIWHNOLOGY

Massachusetts Institute of Technology For the Chicago Journal of

Theoretical Computer Science Contact: Janet Fisher, MIT Press, Massachusetts Institute of Technology 55 Hayward Street Cambridge, MA 02142 Fax: 617-258-6779

Bryn Mawr College For the Bryn Mawr Classical Review,

Bryn Mawr Medieval Review

$ 150,000

130,000

Contact: Richard Hamilton, Bryn Mawr College Bryn Mawr, PA 19010 Fax: 610-527-1547

Johns Hopkins University 400,000 Project Muse Contact: Marie Hansen, The Johns Hopkins University Press, 2715 North Charles Street Baltimore, MD 212184319 Fax: 410-516-6998

New York University 650,000 Fully Integrated Library Multimedia System Contact: Nancy Kranich, Elmer Holmes Bobst Library, New York University 70 Washington Square South New York, NY 10012 Fax: 212-995-4070

22 SERIALS REVIEW -RICHARD E. QUANDT-

DECEMBER 1994

Cornell University Making of America Project Contact: Anne R. Kenney Cornell University Library 214 John M. Olin Library Ithaca, NY 14853-5301 Fax: 607-255-9346

750,000

University of California, Berkeley Electronic publication of journals and monographs Contact: Peter Lyman University of California at Berkeley Main Library, Room 245 Berkeley, CA 94720 Fax: 510-643-8179

750,000

Columbia University 700,000 Evaluation methodology for activities in creating a digital library Contact: Carol Mandel 3 15 Butler Library Columbia University 535 West 114th Street New York, NY 10027 Fax: 212-222-0331

Northwestern University Studies of the economics of dissemination of scholarly learning Contact: Profs. John Panzar and Ronald Braeutigam Dept. of Economics

340,000

Northwestern University Evanston, IL 60208-2400 Fax: 708-49 l-7001

University of Michigan Journal Storage Project (JSTOR) Contact: Kevin Guthrie, The Andrew W. Mellon Foundation 140 East 62nd St.

1,500,000

New York, NY 10021 Fax: 212-888-4172

Bryn Mawr College 15,000 Journal Storage Project (Testsite for JSTOR)

Denison University 15,000 Journal Storage Project (Testsite for JSTOR)

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Haverford College 15,000 Journal Storage Project (Testsite for JSTOR)

Swarthmore College 15,000 Journal Storage Project (Testsite for JSTOR)

Williams College 15,000 Journal Storage Project (Testsite for JSTOR)

JUNE 1995

Case Western Reserve University 650,000 Chemical Sciences Virtual Library Project Contact: Raymond K. Neff, Vice-President Case Western Reserve University 10900 Euclid Avenue Cleveland, OH 44 106-70 19 Fax: 216-368-4903

Massachusetts Institute of Technology Shakespeare Electronic Archive Contact: Janet Murray

Building 20B-23 1 Massachusetts Institute of Technology 18 Vassar Street Cambridge, MA 02 139 Fax: 617-253-5633

Emory University Electronic journals in religious studies Contact: Joan I. Gotwals

Robert W. Woodruff Library Emory University Atlanta, GA 30322 Tel: 404-727-6861

DECEMBER 1995

Associated Colleges of the South Electronic sharing of library resources Contact: Wayne Anderson Associated Colleges of the South 17 Executive Park Drive, Suite 420 Atlanta, GA 30329 Fax: 404-636-9558

450,000

250,000

1,200,OOo

2. Cummings, et al., carefully distinguish between devel- opments at private and public universities; a distinction that we shall largely ignore here.

3. For a suggested methodology for determining the costs of interlibrary lending, see Dickson and Boucher (1989). For a method of comparing the present values of costs of journal subscriptions and document delivery services, see Kingma (1994).

4. For instance, a regression model in which the data are observations on many journals at a single point in time.

5. One would have no great difficulty in estimating the demand function, such as the relationship between the price and the quantity that can be sold at that price, for, say, toma- toes. But one would have considerable problems in making sales predictions at various hypothetical alternative prices for a new product that looks like a blue tomato and tastes like a peach.

6. In high energy physics, for example, preprints are dis- tributed free of charge by Paul Ginsparg at Los Alamos National Laboratory and the need for a “publisher” in that field seems questionable; it is reported that his preprint net- work has 20,000 users worldwide and experiences 35,000 “hits” per day (Okerson and G’Donnell, 1995, p. 13).

7. According to some anecdotal evidence, electronic infor- mation is so easy to access at one college, and is so compre- hensive, that undergraduate essays have started to contain references only to electronically available information; the college now requires that essays must contain some refer- ences to books or journals actually on the shelves in the library.

8. Making a total of about 1.5 million pages.

9. See Lemberg (1995). Lemberg carries out elaborate sim- ulation studies to estimate the net present value of cost sav- ings over a loo-year period of digitizing approximately twenty-two million documents and retaining only a single printed copy. The cost savings are of the order of $44 billion.

10. Birmingham Southern College, Centenary College of Louisiana, Centre College, Furman University, Hendrix Col- lege, Millsaps College, Morehouse College, Rhodes Col- lege, Rollins College, Southwestern University, Trinity Uni- versity, University of Richmond, University of the South.

11. But the aggregate price for the consortium can be de facto split among the members in any manner that they desire.

NOTES REFERENCES

1. Considerable attention has been devoted to these issues Bennett, S. (1994). “The Copyright Challenge: Strengthen- in recent years. See, for example, Kahin (1994) and Okerson ing the Public Interest in the Digital Age.” Library Jour- and O’Donnell (1995). nal, Nov. 15: 34-37.

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Carpenter, K.H., and A.W. Alexander. (1994). “U.S. Period- ical Price Index for 1994” American Libraries (May): 450-452.

Chressanthis, G.A. (1995). “The Cost Structure and Benefit Impact of Academic Libraries at American Research Universities.” Conference on The Economics of Infor-

mation, Lyon-Villeurbanne, France, May 18-20: l-46.

Chressanthis, G. A., and J.D. Chressanthis. (1994a). “A Gen- eral Econometric Model of the Determinants of Library Subscription Prices of Scholarly Journals: The Role of Exchange Rate Risk and Other Factors.” Library Quar-

terly, 64(3): 270-293.

_. (1994b).“The Determinants of Library Subscrip- tion Prices of the Top-Ranked Economics Journals: An

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