Discussion of the presentations focused on the following four topics:
- Business models: How does a museum or library structure an online enterprise: what are the advantages of for-profit as opposed to not-for-profit status?
- Scalability: Given the costs of a digital enterprise, can a single organization achieve success, or is collaboration a sine qua non?
- Organizational impact: How does a new digital enterprise affect the institution-its infrastructure, staff, and culture?
- Sustainability: What elements are necessary to build and sustain a digital enterprise, with respect to infrastructure and to management of external factors such as copyright?
Business Models
For-Profit versus Not-for-Profit: Primacy of Mission
All of the enterprises whose representatives spoke at the meeting claim to have an educational and cultural mission at heart. Is it possible to identify when a digital enterprise should (or must) be not-for-profit, and when it should (or must) seek shareholders to raise capital, share risk, and pay attention to the financial return on investment?
Questia’s experience answers some of those questions. After its founders realized that the business would succeed only if it could achieve a critical mass of digitized books, they decided to seek funding from the private sector. This allowed, and in some ways forced, them to do extensive market research in order to develop a model delivery and pricing portfolio. In addition, the decision to include large amounts of material held in copyright meant that Questia would have to ensure some measure of profit sharing for the intellectual property holders as well as to pay legal staff. The need to be accountable to shareholders actually freed the company to focus on developing a service for a targeted audience. The company did not set out to provide a public service, and unlike a public institution, it did not have to be all things to all people. In addition, the company’s ability to pay for talented staff enabled it to attract and retain employees with highly specialized skills. The company invests in training to keep pace with other commercial enterprises.
AMICO, by contrast, made a conscious decision not to follow the commercial model. This decision was based on the fact that its primary audience was a very specific nonprofit target-academic institutions. There were already commercial providers of art and other images, such as Corbis and Bridgman. Because its only aim was to recover costs, AMICO was able to concentrate on developing an infrastructure for the creation and distribution of digital images held by museums for the educational environment.
Fathom was funded by a private university. It decided to try the commercial (dot-com) approach as a way to attract other nonprofit organizations to a venture that it could not undertake individually. In some ways, the “capital” that needed to be raised was not financial, but one of reputation and of depth of intellectual and cultural assets. It is the opportunity to affiliate with other prestigious cultural organizations that draws participants.
While some participants recalled the definition of a successful nonprofit as an organization that “loses money honorably and in the service of high ideals,” others objected. They believed strongly that nonprofits must be as “businesslike” as any entity that wants to succeed. Any other attitude is no longer feasible, let alone desirable. Doing business in the digital realm, whether for profit or not, demands large amounts of capital, new skills, and a new organizational culture. The assumption that commercial organizations are better managed, and need to be so, is not only false but also dangerous.
Nonetheless, several individuals from the museum and library communities stressed that there are fundamental differences between the management styles of for-profit and not-for-profit entities. While both need to focus on a core mission, the nonprofit organization generally has a broader time horizon. For-profit companies must keep quarterly earnings and revenue projections in mind. Nonprofit enterprises usually have a longer period of time to achieve their goals, and the expectations of their board members and trustees can differ considerably from those of shareholders. These could be long-range goals that may never realize a return, as Mr. Keller asserted in his presentation when he said that a major goal of HighWire Press is to contribute to a marketplace correction. By way of contrast, one of the universities that had joined Fathom had decided to participate in part because of the expectation of a long-term investment opportunity that would reap some financial benefits. Many nonprofit organizations do make good money. The difference is that they do not pay this money out to investors and shareholders as for-profit organizations do; instead, they put it back into the enterprise. From the beginning, a nonprofit must be run with the same concern for accountability, efficiency, value for money, and rigor as must any enterprise hoping for success. Many collaborative projects among libraries and museums have failed because they have tried to “reinvent the wheel” instead of simply following established business practice.
Equally important to facilitating development of good business practice is the creation of a comprehensive, frequently updated guide to best practices for digital programs, ranging in subject matter from the technical to the organizational. The availability of a server with open-source tools would reduce the difficulty that cultural institutions face in finding out what others are doing and which practices are best suited for adaptation. Such a server would enable nonprofits to enter arenas now monopolized by proprietary software.
A successful project must have clear definitions of purpose, mission, and audience. To the extent that commercial enterprises are better able to identify, test, and target audiences, as Questia has done, these organizations have a competitive edge. Indeed, many in the academic library community fear that Questia may appropriate the function of the library, because it can offer services that students do not get from their campus library, as well as content.
New Users and New Uses
The subject of users touched off some debate about how a nonprofit can identify users on the Web and capture their attention. What is so compelling that consumers might be willing to pay for it? In the case of Questia, the answer is convenience. In the case of libraries and archives, it is the collection content that people cite as most desirable. Can libraries license or distribute that content in the commercial sector? There are clearly major differences between the resources needed to build and maintain a product and those needed to distribute it. Does that imply there is a fundamental disparity of mission-one the purview of cultural heritage institutions and the other of companies with marketing and distribution expertise? Museums have already undertaken marketing in the “real” world, with museum shops and so forth. Attempts to move that expertise onto the Web, however, have shown that this is a fundamentally different enterprise-one that has the potential to change the culture of the institution far more than building museum shops or selling tickets to blockbuster exhibitions has done to date. The failure of the online enterprise undertaken by the Tate Gallery of London and the Museum of Modern Art in New York underscores that it takes more than pairing the strengths of individual institutions to make such a enterprise succeed.
This brings us back to the promise of the technology to provide access where none has existed before. The Web has brought content, such as art, to audiences that might not have been able to seek it out in real time and place. In so doing, it has changed the profile of traditional audiences. Museums and libraries are not just creating more access but are offering new kinds of access to entirely new audiences. This, in turn, is changing the way museums perceive themselves. It is also changing the nature of curatorial practice and interpretation.
Value Proposition
A notion that Questia investigated in its market research and referred to as the “value proposition” proved intriguing. How much are people willing to pay for cultural assets such as library books, which have traditionally been free at point of access? What is considered indispensable in the online environment? Convenience? By offering convenience of access to these resources, is there a risk that mission-driven institutions will be squeezed out of what is now a market but that never has been one before? If so, what would happen to the largely unfunded work of museums and libraries, such as preservation?
Returning to the issue of business models, the example of the Copyright Clearance Center was suggested to be pertinent. The question for the center was not whether to “go dot-com” or not but rather to determine what partnerships would be crucial to success. Competition in rights management is causing the center’s original business model to be reconsidered. However, one business model does not fit all needs, either in the commercial or the nonprofit sector. Models are shaped by such factors as process and scale. Sustainable business plans have many components, each of which interacts with the others and with the outside world. As suggested by the case of the Copyright Clearance Center, one should expect that business partnerships will affect each player and alter fundamentally basic assessment of risk.
Daunting as these opportunities may be to traditional institutions that are responsible for the management of cultural heritage assets, even officials from public institutions, burdened by the need to maintain the ill-defined “public trust,” agreed that not to take risk is itself a risky strategy. They are looking for ways to manage the risk intelligently as they step into the digital arena-an arena that demands experimentation and whose rewards for success can be elusive and whose punishment for failure includes the possibility of the loss of public confidence.
Who Pays?
The discussion of various business models begged a larger question: In the era of the Internet, what do nonprofit organizations owe the public, and what should be free (i.e., without payment at point of use)? The traditional idea of “free access to information” is under fire. Does a publicly supported institution, or even one that is private but exempt from taxation and able to serve collections through the doctrine of fair use, owe the public delivery of a collection for free? If so, how does that institution support such a service? Of course, the assumption that information and cultural heritage has ever been delivered for free is more or less incorrect. Museums have been supported by a number of means, most of them indirect to the visitor or patron until fairly recently. With respect to libraries, homage is still paid to Andrew Carnegie’s model of tax-supported public services supplemented by investments by the private philanthropic (or, today, corporate marketing) sector, but this masks the fact that information and access to it were never really completely free. Digital technology in general and the Internet in particular simply mean that costs are now loaded, or could be loaded, on the user side of the equation.
The online environment seems to have created two mutually exclusive promises: For the users, deep and virtually unrestricted access to and integration of cultural data; for the providers, recovery of costs by controlled access. Museums and libraries have always exercised some discretion in granting on-site access to their collections. Some of their policies governing access stem from donor restrictions, others from concerns surrounding privacy concerns, and still others with highly sensitive personal content. The Internet has now introduced new categories of limitation, mostly to do with intellectual property, and these exacerbate the others.
Threshold Issues and Public Expectations
Given the risks associated with developing and distributing digital content, from the financial to the legal, what is going to compel cultural heritage institutions to enter into this arena? Current decision making, even at the most respected institutions, is based on untested or unknown assumptions of social obligation and institutional mission, including the mantra so often heard that content delivered to the K-12 community will transform teaching and, by extension, solve educational problems in the United States. These are heavy expectations, to be sure, and they need to be tested in the marketplace, just as a commercial firm would test them. So far, few such tests have been conducted in the museum and library communities.
For publicly supported institutions, the expectations are especially high. There is a public expectation that access to government information, and to collections that have been collected, cataloged, preserved, or served with some public funds, should be free. Perhaps this is truer of libraries than of museums, because libraries have always been free (that is, patrons do not pay to enter a library or to use the collections).
But from the point of view of these institutions, the distinction between what is a core service, which should be freely accessible, and what is a value-added service is not clear. The cost of going digital for public museums and libraries is every bit as high as it is for industry. The pressure for such institutions to go online in cost-efficient ways is intense, and few see economic ways of doing so. Building core infrastructure-establishing standards and practices that serve interoperability and easy access-is a complicated process that demands collaboration, and collaboration has costs associated with it. Such public institutions as the New York Public Library and the British Library value the chance to collaborate in a project like Fathom because it offers a way to manage the risks associated with innovation. The model presented by the ICP and GEH demonstrates how smaller, less publicly accountable, institutions can enter into a collaboration that is, in its way, designed to manage the risks associated with change and innovation as well as to build economies of scale for technical expertise and infrastructure.
Scalability of Models and Projects
Because of the infrastructure investments mandatory for any digital program, participants wanted to learn more about how these enterprises were scaled and whether or not the technology precludes small institutions from embarking alone on such projects. The Questia model was decisively influenced by the need to build a big database to ensure that it would suit the needs of the target audience. Because there is a need for a critical mass of monographs in the database for curricular purposes, such a model could not be scaled down. On the other hand, both HighWire Press and JSTOR started out rather small and have the potential to keep growing, based on demand and on availability of quality content. In the case of Fathom, Columbia University decided that a collaborative site was essential to its mission. The barrier to join has been low, because members contribute something they already have-digital content-and financial contributions are not mandatory.
The presentations and discussions made it clear that it is difficult for large, relatively well-funded nonprofit museums and libraries to devise business models that promise to be sustainable. This raises serious concerns about the fate of small and medium-sized institutions to have appropriate space on the Web. All agreed that these enterprises need some catalyzing organization-such as Columbia in the case of Fathom, Stanford University in the case of HighWire Press, or the Mellon Foundation in the case of JSTOR. There is concern that smaller institutions are at a great disadvantage. Production capacity and the creation and sustenance of architectures that are necessary for new opportunities are seldom encountered outside of large organizations. Thus, for many libraries and museums, the only choice is to enter into collaboration, something that also carries a big price tag. For smaller institutions, it is usually too expensive to participate in more than one project at a time. Decisions to support projects by outside funding agencies are often made on the basis of judgments about technical expertise available at a given institution. This eliminates many worthy projects at smaller organizations.
Organizational Impacts
All cultural institutions entering the digital realm must compete in the marketplace for skilled labor. While recruitment may have become somewhat less challenging since the technology market correction of 2000, the problems of recruiting, training, and retaining staff remain acute. What is needed, participants suggested, is a closer working relationship between libraries and museums that can leverage the expertise found in these communities and lead to sharing among institutions and across domains.
As staffing patterns change-increasing the number of professionals with technical expertise, sometimes at the expense of support staff and subject specialists-communication within an organization often breaks down. Organizational strategies such as creating departments on the basis of function or collection, which made great sense before the advent of digital technology, can actually be barriers to communication in the new environment. The traditional separation between text and image research collections, for example, will break down because researchers will interrogate sources in new ways. Users increasingly expect seamless access and simplified rights management-certainly that is the service being offered by Questia. How will traditional “legacy” institutions order themselves to meet those needs? As long as museums and libraries were digitizing discrete collections and mounting them on the Web in a project-based mode, they could isolate the digital activity within the organization. The potential of the technology to transform the nature of research and cultural enrichment means that these institutions must find ways to integrate fully the technology into the fabric of their institutions.
Changing Curatorial Roles
One of the most important effects of this transformation is the changing curatorial role within collecting institutions. Providing access not only to the curatorial voice but also to the source materials upon which scholarship is based, like the ICP/GEH partnership will do, opens museums up to a new kind of scrutiny from the public. Some are concerned that museums are at risk of losing their authority to interpret. Others welcome this development, but are uncertain about how to ensure that their curatorial staffs make the transition to this new model of interpretation. For libraries, the challenges are coming from the other direction. Librarians do not see themselves as mediators in interpretation, but as facilitators for researchers. Putting research collections online demands new skills: selection, interpretation (such as the creation of descriptive metadata that can be indistinguishable from exhibition captions), and presentation. One of the great opportunities for collaboration in the digital realm is between libraries and museums in the emerging new paradigm of “e-curatorship,” and such cooperation would be an ideal way to provide cross-fertilization between subject specialists.
Elements of Sustainability
Among the elements needed by institutions of all sizes for sustainable digital programs are standards and best practices, coherent and common digital architectures, and ongoing means for creating and sharing a knowledge base. The creation of a central clearinghouse for technical information would be ideal; for example, it would allow access to information about the state of the art of any number of technical matters. Even a centralized way of listing and providing access to information about what other institutions are doing would be a boon. Participants in the meeting agreed that a registry that would record the existence of digital conversion efforts and supply information about the underlying source materials, the specifications followed for conversion, methods of distribution, and so forth, would be a good place to start. Many conferees also advocated the development of digital service bureaus to provide an array of conversion, distribution, and archiving services for a variety of cultural repositories. This would allow for an aggregation of expertise, streamlining of production processes, and some level of adherence to standard practices. What would be the feasibility of establishing regional centers for digital content production? How could they be structured to promote cultural equality among museums and libraries of varying sizes?
In considering how the user wishes to gain access to culture online, many suggested the need to adopt common standards for the description of cultural heritage data. Such a process would begin with gathering information from museums and library communities about existing data for standards and tools and sharing perspectives on risk assessment, especially in the copyright arena. One example of a needed structure is a “knowledge environment,” a collection of information services about digital projects along the lines of a service bureau for data and communications design and development, as well as production. This is something practitioners would use daily-a “tool kit” that would enable nonprofit organizations to gain and share expertise. A guide to good practice should be developed not only for the practitioners but also for funders, who need guidance on what good practices are and how to identify patterns of behavior that work or do not work. More important, the need for guides to best practices shows the related need for establishing new skill sets and competencies. While some expressed caution about the ability to articulate best practices-they felt that so-called best practices rely too much on anecdotal evidence rather than on methodical proof-all agreed on the need to convene groups to begin defining good practice. They suggested that rather than try to come to an agreement on standards, we should find ways to identify equivalencies (semistandard professional tools). The system of knowledge sharing must go beyond the individual organization; professional organizations can play a role. NINCH is developing a guide to best practices for digital projects. The intended readership is staff of museums, libraries, archives, faculty, and arts organizations.
Some participants argued that at this juncture, it is important for funders to distinguish between projects that have broad applicability and those that are focused on developing and testing new approaches to technical or organizational issues. It is important to support experimental approaches that take risks. The public, too, must be supportive of experimentation, i.e., be willing to accept the possibility of failure. Libraries and museums are largely dominated by cultures of risk avoidance and measured response. The culture of stewardship has bred a natural conservatism into the bone of the organizations. Given the challenges posed by the Web, and the new public that it brings to libraries and museums, the focus on addressing short-term problems with short-term solutions risks undermining the public trust these institutions have earned over time.
