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    16.6 Economic Behavior

    Economic Behavior of Scholars

    Given our original framework, we would like to bring together everything that we have learned, to formulate some economic model about scholars' preferences for modalities of book access. We believe that, for this issue, one key variable is cost which we characterize simply as low or high. (For the moment let us imagine that this is the purchase price of the book, as far as the scholar is concerned.). We propose that the other key variable is whether the scholar intends to read much or read little. We believe that whether the book is cheap or expensive, if only a little of it is to be read, the scholar will prefer to get it online. Based on data available to us during the span of this project, we believe that if much of the book is to be read, the scholar will prefer to get it in paper form. If the cost is low, the scholar will buy it; and if the cost is high, the scholar would like the library to buy it so that he or she can borrow it.

    In short, what we seem to find is that users want online books for convenient access and for assured availability. They also want online books for many of the purposes discussed above. They are particularly attracted by the added functionality of annotating and hyperlinking. Nonetheless, our results indicate that when scholars want to read books at length, they still want them in paper form.

    Economic Perspective of Librarians

    Complementary to this analysis of when scholars will prefer online books, our focus group studies with librarians indicate that librarians want online books for high demand books (for example instead of buying a second copy). Librarians also want online books to meet transient demand, rather than having to purchase additional copies which will be unused later. And, of course, librarians want online books for the anticipated cost savings.

    On the other hand librarians are concerned about having to pay separately for the online version of a book that they hold in paper. They are concerned about the uncertainty of preservation and migration of digital forms. They also are concerned about the appearance of unwanted and unused material in bundled packages. While bundling in general can increase both consumer and producer benefit (Shapiro and Varian, 1999), librarians are particularly concerned with the flow of cash from the institution to the publishers, and would like to have the finest possible detailed control to optimize the allocation of those funds, by avoiding materials that are less in demand.

    Speculations on Marketing Strategies

    We have tried to speculate on options for library-oriented strategies for the introduction of online books. For example, one might imagine that online versions are made available for little or no additional cost to purchasers of paper copies. One might hope to see entire collections of online material priced very attractively. On the other end of the bundling spectrum, one might see some kind of on-demand licensing, or on-demand print ordering. The netLibrary is offering yet another alternative by mimicing the circulation system for print books. It provides online books to individual libraries or library consortia and allows just one user at a time for each book. Other marketing strategies are more reader-oriented and less tailored to the concerns of a library. These include Questia's effort to build an online book collection the size of a college library (250,000 volumes) and to sell subscriptions to students. Another path is the hand-held device and downloadable book that is now coming to market. Generally speaking, in reader-oriented strategies, pricing of the electronic form will be unrelated to print purchase, as there is little chance that consumers can be persuaded to buy the same "book" twice.

    We speculate, but at this point can only ask, whether different strategies will emerge for different classes of print materials such as text books, scholarly books, and narrow interest (sometimes called endangered) scholarly books.

    At the end of our study it appears that a number of transitional strategies are available or being developed. The leading one is the dual provision by publishers of publications in print and online. Among other virtues of the strategy, there is the possibility of electronic publication of both a backlist (the books that have been available for over a year) and a front list (the books newly published). Since publishers still need to protect ultimate paper sales, some limits may be placed on the accessibility or functionality of new titles that are presented in front-list form.