Costs

Several papers in this volume discuss the issue of costs. The complexity of the cost issues is staggering. Everybody agrees that journals as well as monographs have first-copy costs, which much resemble what the economist calls fixed costs, and variable costs. Printing, binding, and mailing are fairly sizable portions of total costs (23% for the American Economic Review if we ignore the fixed component and more like 36% if we include it), and it is tempting to hope that electronic publications will completely avoid these costs. (It is particularly bothersome that the marginal cost of producing an additional unit of an electronic product is [nearly] zero; hence a competitive pricing strategy would prescribe an optimal price of zero, at which, however, the vendor cannot make ends meet.) While it is true that publishers may avoid these particular costs, they clearly incur others, such as hardware, which periodically needs to be replaced, and digitizing or markup costs. Thus, estimates by Project MUSE, for example, are that to provide both the print-based and the electronic copies of journals costs 130% of the print-based publication by itself, whereas for Immunology Today, the combined price is set at 125% of the print version (see chapter 8). But these figures just underscore how much in the process is truly variable or adjustable: one could, presumably, save on editorial costs by requiring authors to submit papers ready to be placed on the Web (to be sure, with some risk of deteriorating visual quality).^[10]

Most important, the cost implications of electronic publication are not only those costs from actually producing the product. Suddenly, the costs incurred by other entities are also affected. First is the library. Traditionally the library has borne costs as a result of providing access to scholarly information: the book or journal has to be ordered, it has to be cataloged, sometimes bound (and even rebound), shelved and reshelved, circulated, and so on. But electronic products, while they may offer some savings, also bring new costs. Libraries, for example, now have to provide workstations at which users can access the relevant materials; they must devote resources to archiving electronic materials or to providing help desks for the uninitiated. The university's computer center may also get involved in the process. But equally important, the costs to a user may also depend on the

specific type of electronic product. Meanwhile, to the extent that a professor no longer has to walk to the library to consult a book, a benefit is conferred that has the effect of a de facto cost reduction. But let us agree that university administrators may not care much about costs that do not get translated into actual dollars and cents and that have to be actually disbursed (as Bennett points out). Nevertheless, there may well be actual costs that can be reduced. For example, a digital library of rare materials may obviate the need for a professor to undertake expensive research trips to distant libraries (which we may therefore call avoided costs). This factor may represent a saving to the university if it normally finances such trips or may be a saving to the National Science Foundation or the National Endowment for the Humanities if they were to end up paying the tab. The main point is that certain costs that used to be deemed external to the library now become internal to a broader system, and the costs of the provision of information resources must be regarded, as a minimum, on a university-wide basis. Hence these costs belong not only in the librarian's office (who would not normally care about the costs of professors' research trips) but in the provost's office as well.

Finally, we should note that many types of electronic products have up-front development costs that, given the current state of the market for such products, may not be recouped in the short run. (See, for example, Janet H. Fisher [chapter 5].) But to the extent that electronic library products will be more competitive at some future time, investing in current development efforts without the expectation of a payback may be analogous to the infant industry argument for tariff protection and may well have a lot of justification for it.