The topic is unique, as is much that comes from Ithaka S+R. It looks at the financial and organizational sustainability of digital content initiatives in universities, libraries and cultural heritage institutions. How successful are these institutions in maintaining the digital resources in their virtual collections, databases, and online content?
The study advances earlier work done at Ithaka S+R back in July 2009, available here. But I think those that found the book “Unlocking the Gates” by Taylor Walsh – another Ithaka effort, will find that similar ideas are explored. (For my interview with Taylor Walsh, visit here.)
They’ve provided an excellent outline of their key findings:
In 2011, host institution support plays an ever-greater role in supporting digital resource projects. Support from a host university or institution – whether in the form of cash or in-kind contributions – was a core factor for the not-for-profit projects we studied during the original round of research in 2009. Two years on, we saw evidence of ‘gap’ support: host institutions helping in an ad hoc way to cover costs when a project’s revenue goals were not met through planned activities. It is clear that many projects are more dependent than ever on their institutional host. Whether or not this is a good arrangement, or one that projects leaders can rely upon, remains to be seen.
Earned revenue, though often a valuable part of a project’s sustainability strategy, was rarely sufficient to support the ongoing direct costs of the projects we studied. Even where innovative revenue models were in place, often they were not covering the entire cost of the resource. While having multiple revenue streams was often helpful, in some cases ‘diversity’ in revenue sources could be a liability, if the work needed to develop them ended up detracting from the main goals of the organisation.
Identifying reliable external sources of revenue requires ongoing experimentation and iteration. The projects that have had some success with generating earned revenue have engaged in an ongoing process of testing and experimentation, identifying revenue models and target audiences that seem to be close fits for the project’s needs, and building on those if they show early signs of success.
The projects that were conceived with a mandate to generate revenue seemed more successful at this than those mission-based projects that attempted to generate revenue as a secondary measure. The projects generating enough revenue to cover their costs – a for-profit publisher and two commercial trading ventures at cultural heritage organisations – were those whose main intention was to do just that. Projects started with external grants, often at academic institutions, had a more difficult time than projects created by large cultural organisations specifically to generate revenue.
Whether a project is ‘mission-first’ or places a premium on generating revenue, aligning the goals of the project and the mission of its host is important. We observed several examples of projects taking steps to more closely address the institutional mission of their hosts. In the case where we observed that project and institutional expectations seemed to be misaligned, the unit was eventually restructured in order to remedy this.
Staying small is fine, if the resource is filling a well-defined niche. We observed some projects that had developed stable models based on support from a small but devoted core of supporters; for these projects, growth may not be an option, or it may not be considered desirable by project stakeholders.
‘Small at any cost’ is not the answer. In a difficult climate, many organisations have been forced to adjust to steep budget reductions, and these have been felt by embedded projects like those in our cohort. Still, simple across-the-board cost cutting at projects can end up depriving new, promising projects of the capital investments they require in order to grow. Short-term savings can, in this way, hinder future growth.