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Environmental
Scan of Pricing Models for Online Content
Report II
Business Models for Object Repositories
Prepared by Albert W. Darimont
http://www.darimont.ca
OnDisC Project
April 2002© OnDisC 2002
0. Executive
Summary
1. Background
2. Learning
Object Repositories
3.
Business Models - Value chain
4. Funding
Models
5. Discussion
6. Conclusions
7. Bibliography
8. Web
Site References (Webliography)
4
Funding
Models
There are several possible funding models that can
be considered to fund the start up and ongoing maintenance
of a digital content production and distribution
system.
4.1
Subsidized
(Sponsorship)
The entire value chain may be supported by external
sources such as is the case with traditional libraries.
This could be from a single government agency, or
a consortium of sponsors.
Pros
· allows greater breadth of coverage
(not restricted to high demand items)
· allows time to develop the service
(incubation period) while exploring other funding
options later
· allows greater market exposure
(i.e. poor schools will not be denied access)
· consortium sponsorship may be
able to provide people or services-in-kind in addition
to funding
Cons
· Does not allow the true cost
of the service to be recovered
· requires long term continued
commitment, funding may be reduced due to other
competing financial commitments
4.2
Advertising
Pros
· independence from
sponsors
Cons
· viewing
traffic, on which rates are based may be low
· might
generate a bias towards certain material which generates
higher traffic
· advertising
may not coincide with the values/goals of the institution
· added
administration expense of soliciting advertisers
· subject
to the ups and downs of the business cycle
4.3
Pay
per Use
End users may have to pay for using the system,
recent eg. is Ebrarian a new initiative of Ebrary
that makes online content available to libraries
for free, but users pay a charge to make an actual
print copy.
Pros
· best
way of recovering costs for redistribution to content
providers
· allows feedback about which
kinds of content are successful and should be reinforced
Cons
·
added transaction expense
·
may discourage use
·
hard to compete with traditional “free” services
at point of use (eg. libraries)
· may
conflict with the educational goals of the institution
·
may lead to a bias against a broad coverage of materials
4.4 Member Organization
Fees
Members of the organization pay an annual fee. eg.
is MERLOT which receives a significant part of its
funding from membership fees, and in-kind revenue
from key academic supporters.
Pros
· allows
for better cost recovery
· a
stable source of revenue
· distribution
of fees to non-for-profit members (subsidize)
Cons
· may
discourage the listing of many quality resources
from the private sector
4.5
Learning
Institutions Fees
Learning institutions pay an annual fee for
a license to use the content. Eg. is AMICO, SCRAN,
and JSTOR as discussed in the Phase I report.
Pros
· allows
better cost recovery
· distributed
funding model may be more robust than funding from
a single sponsor
· possibility
of a stronger supplier/customer relationship
Cons
· may
discourage institutions if other repositories are
available for free
· may
be difficult to compete with other institutional
expense
4.6
Content
Contributor Fees
Content contributors who provide not-for-free material
pay to have their content listed. They could also
pay royalty fees based on their volume of business.
Pros
· allows
the aggregator a source of working revenue during
a build up phase
· allows
for better cost recovery for the value addition
performed by the aggregator for the content provider
Cons
· may
discourage contributing organizations from joining
the consortium
Table 2 Revenue / Value
|
Player |
Value Additions |
Potential Revenue Sources |
Publisher
(content creator) |
Development
Storage
Archiving/Preservation
Branding/Authority |
Sponsorship
Content Aggregator/Distributor
Institution/Individual |
|
Content Aggregator/Distributor |
Gateway
User Interface
Discovery Tools
Awareness
Promotion
Meta-tagging
Peer review
Copy Protection
Distribution Channel
Rights Management
Administration |
Sponsorship
Advertising
Institution Access Fee
Individual Pay-per-use
Publisher (member) Fee
Content Contribution Fee |
|
Institutional user |
Access Control
User Training
IT Infrastructure |
Sponsorship
Individual user
(tuition, pay-per-use) |
|
Individual user |
Use of the content |
Debt :o) |
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