The Incentives to PreserveDigital Materials:

Roles, Scenarios, and Economic Decision-making

Brian LavoieResearch Scientist

OCLC Research

OCLC Digital & Preservation Cooperative Participant Meeting, May 7, 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

Implications (1)Implications (1)

Rights Holder distinct from Beneficiary …

– Right to preserve separate from need to preserve

– Owner of digital materials may not benefit directly from long-term preservation

– Example: licensed/subscribed digital materials

– Diminished incentives: positive externality

– Centrifugal, Supply-Side, Consolidated Models

Implications (2)Implications (2)

Rights Holder/Beneficiary same entity …– Right to preserve combined with need to

preserve

– AND multiple entities fill this dual role in regard to a particular set of digital materials

– Example: shrink-wrapped digital content; “environment” software (operating systems, rendering applications)

– Diminished incentives: public goods, “free-riding”

– Centripetal, Demand-Side Models

Implications (3)Implications (3)

Archive distinct from Beneficiary …– Willingness to preserve separate from Need to preserve

– AND multiple Beneficiaries with different perceptions of “successful” digital preservation

– Example: preservation for limited period vs. perpetuity; preserve intellectual content only vs. original “look and feel”

– Multiple levels (intensities) of digital preservation service

– Diminished incentives: market fragmentation; reduced scope for economies of scale

– Centrifugal, Supply-Side, Demand-Side Models

Back to Core Scenarios …Back to Core Scenarios …

Positive externalityPositive externality

Public good; free-ridingPublic good; free-riding

Market FragmentationMarket Fragmentation

Centripetal

Centripetal

Centrifugal

Centrifugal

Supply-Side

Supply-Side

Demand-Side

Demand-Side

Consolidated

Consolidated

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