The Incentives to PreserveDigital Materials:

Roles, Scenarios, and Economic Decision-making

Brian LavoieResearch Scientist

OCLC Research

CNI Spring Task Force Meeting, April 29, 2003

RoadmapRoadmap

• Background: Economics of Digital Preservation

• Incentives to Preserve Digital Materials

• Framework for Analyzing Incentives

• Implications

• Summary

Digital Preservation Research:

• Architectures• Metadata• Preservation strategies• Economics

Digital Preservation Research:

• Architectures• Metadata• Preservation strategies• Economics

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Economics of Digital PreservationEconomics of Digital Preservation

Digital collections growing …Digital collections growing …

… but long-term retention uncertain… but long-term retention uncertain

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Fundamental Economic QuestionsFundamental Economic Questions

• “IF we preserve, how much will it cost?”

• But: “WILL we preserve?”

Or …What are the incentives to preserve?

• Important because digital preservation …… likely to be routine, ongoing component of digital asset lifecycle management

… extends beyond collecting institutions to stakeholders not traditionally associated with preservation

Analysis of IncentivesAnalysis of Incentives• Incentives in practice:

– Cost/benefit analysis for a proposed activity

– Quantify incentives (costs and benefits)

– But: quantifying digital preservation costs and benefits problematic

• Useful to have some form of predictive model to address question “Will we preserve?”

• Strategy: develop simple framework that …– Identifies key decision-making roles in digital preservation

– Characterizes set of “core scenarios” representing possible ways decision-making roles can be organized in a digital preservation activity

– Apply economic theory to core scenarios to yield qualitative descriptions of the incentives to preserve in each scenario

Incentives to PreserveIncentives to Preserve

(1) Recognition of a value or benefit in preserving a set of digital materials“need to preserve” = demand for digital preservation services(1) Recognition of a value or benefit in preserving a set of digital materials“need to preserve” = demand for digital preservation services

(2) Willingness to implement and carry out processes necessaryto preserve digital materials“willingness to preserve” = supply of digital preservation services

(2) Willingness to implement and carry out processes necessaryto preserve digital materials“willingness to preserve” = supply of digital preservation services

Digital Preservation:Decision-Making RolesDigital Preservation:Decision-Making Roles

Rights HolderRights Holder

BeneficiaryBeneficiaryArchiveArchive

- Holds intellectual property rights- Right to initiate preservation- Can cede or grant right to another entity

- Holds intellectual property rights- Right to initiate preservation- Can cede or grant right to another entity

- Benefits from preservation- Directly: as end user- Indirectly: on behalf of end-users

- Benefits from preservation- Directly: as end user- Indirectly: on behalf of end-users

- Implements and manages preservation process- Implements and manages preservation process

Roles and IncentivesRoles and Incentives

• Decision-makers are roles, not distinct entities (Entity: library, publisher, person, etc.)

• Multiple entities can share the same role

• Beneficiary: embodies need to preserve

• Archive: embodies willingness to preserve

• Rights Holder: empowers incentives

Core Scenarios of Digital PreservationCore Scenarios of Digital Preservation

Beneficiary Centripetal Model

Centrifugal Model

Consolidated Model

Supply-Side Model

Demand-Side Model

ArchiveRightsHolder

RightsHolder

RightsHolder

RightsHolder

RightsHolder

Archive

Archive

Archive

Archive

Beneficiary

Beneficiary

Beneficiary

Beneficiary

Economic Theory and IncentivesEconomic Theory and Incentives

• Core scenarios highlight …– Relationships among key decision-making roles

associated with digital preservation

– Relationships between need to preserve, willingness to preserve, and right to preserve

– How do these relationships impact incentives?

• Economics: rich literature dealing with incentives in settings similar to “core scenarios”– Prospects for sufficient incentives to emerge; factors

that may diminish incentives

– Policies to enhance incentives where needed

Example …Example …

• Licensed/Subscribed digital content:

– e-journals, e-books, online databases

• Common features:

– Accessed over network (Rights Holder’s server)

– Ownership/physical possession of “bits” resides with Rights Holder

Benefits from PreservationBenefits from Preservation

• For some period of time, Rights Holder is also a Beneficiary from preservation:– Digital materials’ “economic life”

• But collecting institutions may perceive benefits from preservation beyond this period:– E.g., preserving scholarly or cultural record

• At some point, Rights Holder ceases to be Beneficiary, but other institutions continue in that role– I.e., Rights Holder becomes entity distinct from

Beneficiary

Positive ExternalitiesPositive Externalities

EconomicActivity

EconomicActivity

CostCost

Person APerson APerson BPerson B

Examples:• Vaccination• Digital Preservation

Examples:• Vaccination• Digital Preservation

BenefitsBenefits

BenefitsBenefits

Back to Core Scenarios …Back to Core Scenarios …

• Rights Holder is distinct from Beneficiary– Need to Preserve separate from Right to Preserve

– Centrifugal Model: RH, B, and A all separate

– Supply-Side Model: RH, A same; B separate

– Consolidated Model: B, A same; RH separate

• In each of these models, economically sustainable digital preservation must overcome the incentive gap created by the positive externality

Textbook Solutions …Textbook Solutions …

• Government Intervention:– Provide the activity

– Fund the activity through subsidies

• Legal Environment:– Force Rights Holder to undertake activity (compensated through

subsidy)

– Force Rights Holder to grant right to preserve to another entity

• Negotiation:– Beneficiary persuades Rights Holder to undertake preservation

(Beneficiary pays)

– Beneficiary persuades Rights Holder to grant right to preserve (Beneficiary pays)

… And a Real-World Example… And a Real-World Example

Libraries(Beneficiaries)

Publishers(Rights Holder)

JSTOR(Archive)

• Free up space• Eliminate redundancies• Lower long-term storage costs• Facilitate access

• Free up space• Eliminate redundancies• Lower long-term storage costs• Facilitate access

??

Archiving Journal Content in Digital FormArchiving Journal Content in Digital Form

• Negotiates with Publishers• Reformats content• Manages storage + access• Charges access + archiving fees to libraries

• Negotiates with Publishers• Reformats content• Manages storage + access• Charges access + archiving fees to libraries

CentrifugalModel

CentrifugalModel

SummarySummary

• Incentives to preserve fundamental to developing economically sustainable digital preservation activities– For any set of digital materials, need to examine underlying

motivations to undertake digital preservation

• To analyze incentives, characterize organization of decision-making roles for a particular digital preservation activity:– Identify relationships between incentives to preserve (need to

preserve, willingness to preserve) and right to preserve

• Use these relationships to identify potential misalignment of preservation incentives and objectives. This will inform:– Organization of digital preservation activities a priori

– Design of policies to enhance incentives ex post

For More Information …For More Information …

Paper:http://www.oclc.org/research/projects/digipres/

incentives-dp.pdf

Contact:lavoie@oclc.org