Libraries: A Tipping Point in Commercial Online
March 5, 2009
Libraries find themselves in a tough spot. The economic downturn has created a surge in walk in traffic. In Louisville, Kentucky, I watched as patrons waited to use various online systems available. I spoke with several people. Most were looking for employment information or government benefit resources. I pop into the downtown library a couple of times a month, and at 4 pm on a Thursday, the place was busy.
In Massachusetts, four libraries found themselves in the spotlight. According to the Wicked Local Brockton here, “Wareham, Norton Libraries Lose Certification; Brockton, Rockland Given Reprieve”. The libraries, according to Maria Papadopoulos’ article had cut their budgets too much. As a result, the libraries lost their state certification, which further increases budget pressure. Across the country the Seattle Post Intelligencer reported “Big Challenges Await City’s New Librarian.” Kathy Mulady wrote:
Actual library visits are up 20 percent, and virtual visits online are up even more. About 13 million people visited city library branches last year.
That’s the good news. The bad news is that Seattle, home of Amazon (king of ebooks) and Microsoft (the go-to company for software and online information) has a budget crunch. The new library director will have to deal with inevitable financial pressure at a time when demand for services is going up. Tough job.
What’s this mean for commercial online services?
View of a collision between light rail and a freight locomotive. Will this happen when library budgets collide with the commercial online vendors in 2010? Image source: http://www.calbar.ca.gov/calbar/images/CBJ/2005/Metrolink-Train-Wreck.jpg
My view is that the companies dependent on libraries for their revenue will be facing a very lean 2009. The well managed companies will survive, but those companies that are highly leveraged may find themselves facing significant revenue pressure. Most of the vendors dependent on libraries for revenue are low profile operations. These companies aggregate information and make that information available to individual libraries or to groups of libraries that join together to act as a buying club. Most library acquisitions occur on a cycle that is governed by the budget authority funding a library. In effect, library vendors will receive orders and payments in 2009.
The big crunch may occur in 2010. When that happens, the library vendors will be put under increasing pressure. I have identified three potential developments to watch.
First, I think some high profile library dependent information companies will be forced to merge, cut back on staff and product development, or shut their doors. Size of the library centric company may not protect these firms. The costs of creating and delivering electronic information of higher value than this goose-based Web log are often high and difficult to compress. The commercial database companies are dependent on publishers for content. Publishers are in a difficult spot themselves. As a result, the interlocks between commercial publishing, traditional database companies, and libraries are complex. Destabilize one link and the chain disintegrates. No warning. Pop. Disintegration.
Image source: http://harvardinjurylaw.com/broken-chain.jpg
Second, the libraries themselves are going to have to rethink what they do with their budgets. This type of information decision has been commonplace for many years. For example, libraries have to decide what books to buy. Libraries have to decide what percent of their budget gets spent on periodicals in print or online. Libraries have to decide whether to cut hours or cut acquisitions. Libraries, in short, make life and death information decisions each day. The forced choices mean that libraries have to decide between serving patrons with online access to Internet resources or online access to high value information sources like those purchased from Cambridge Scientific Abstracts (privately held), Ebsco (privately held), Reed Elsevier (tie up between two non US commercial entities, one Dutch, one British), Thomson Reuters (public company) Wolters Kluwer (public, non US company) and some other companies that are not household names. Free services from Google, Microsoft, and Yahoo plus Web logs, Twitter, and metasearch systems like IxQuick.com would look pretty good to me when I had to decide between a $200,000 payment to a commercial database company and providing services to my patrons, students, and consortium partners.
Third, Google’s steady indexing of content in Google Books and in its government service and the general Google Web index offers an alternative to the high value, six figure deals that library centric information companies pursue. If I were working in a library, I would not hesitate to focus on Google-type resources. I would shift money from the commercial database line item to those expenses associated with keeping the library open and the public access terminals connected to the Internet available.
In short, the economic problems for companies in the search and content processing sector are here-and-now problems. The managers of these firms need to make sales in order to stay in business. The library centric information companies are sitting on railroad tracks used by the TGV, just waiting for the real budget collision to arrive. The traditional library information companies cannot get off the tracks even though they know the 2010 is going to arrive right on schedule.
I want to steer clear of these railroad tracks. Debris can do some collateral damage.
Stephen Arnold, March 5, 2009
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Robert Darnton in “Google & the Future of Books” February 12, 2009 in the New York review of Books http://www.nybooks.com/articles/22281 – makes a compelling argument for public participation in the legal issues involved in the digitalization or imaging of library resources in order to keep the future product democratized for the use of all library patrons. According to Darnton, the public missed the boat in the class action Google Book Rights Registry settlement. Why? Because commercial interest has won the day and the public’s interest plays no part. The ramification?
Google or any of its services, for instance Google Books, can change overnight and become monetized and then some – until it costs as much or even more than the present traditional commercial services serving libraries.
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