In this issue of the Journal of Electronic Publishing, a specially collected group of articles address some of the issues surrounding "the economics of online publishing." As a five-year-old economic structure built upon continuously changing principles, standards, and models, the "Internet economy" is still only a set of answers in the process of finding correlative questions.

For publishers, the economics of the Internet have direct, pragmatic consequences; Colin Day and Marlie Wasserman, both directors of university presses, outline some of them. They make clear that the costs of publishing are far more than the costs of dissemination.

For others, such as library director Scott Bennett, the more costly processes of publishing identified by Day and Wasserman may themselves be available for rethinking.

Among the most referenced articles on the topic of the economics of publishing are Andrew Odlyzko's and Hal Varian's separate essays on the economics of scholarly journals.

Among those five we have an economist/publisher, another publisher, a librarian, a scientist, and an economist, respectively, and their different perspectives direct many of their conclusions.

As a publisher myself, I find the speculations and itemizations fascinating; I also find that much of the discussion is still framed by our preconceptions about what a "publication" is, or limited by an artificial binarism that posits that digital will inevitably "replace" print.

The old saw that no publishing technologies but papyrus and clay tablets have ever fully died out, while true, I think begs a larger set of questions about the nature of the new medium, the implications of the new (inevitable) payment mechanisms, and the consequent challenges to publishers, authors, and librarians alike.

Emulation and Imitation

Publishers glommed onto the Internet early, but also fell into the predictable habit of applying established principles of publishing to the new technologies. CD-ROMs seemed more appealing than online publishing, while PDF seemed more sensible than HTML, perhaps because those transitional technologies seemed to hold the best of both worlds: they followed some of the rules of the old models (CD-ROMs were units that were pressed and distributed; PDFs are dependable representations of the pages themselves), while taking advantage of the new models.

Over the last few years it's becoming clear that online publishing isn't just making paper digitally available. Rather, it is a means of publication in its own right, with its own strengths and weaknesses, and its own necessary logic. Some material is ideal for online publication (reference works, large resource bases, highly interconnected and changing material), while other material is not; the medium is suited for what it's best suited for. A thousand GIFs couldn't tell the story of Moby Dick like the words do; a million words can't thrill like the Ninth Symphony. We are just discovering the potential of this new medium.

Appropriateness in $ and Sense

Just as there are media appropriate for particular communications, there are economic models appropriate for particular media, content, and audience.

We are in a strange time, in that one of the fundamental stakes holding the economic-model balloon is pulling free: that of physically manifest content containers. Over the last several hundred years, physical containers defined the dissemination medium and thus defined the cost recovery models of every textual publishing enterprise. New technologies were incremental improvements on the existing technologies — faster presses, better ink, cheaper plates, faster composition, cheaper papermaking — each leading to decreasing costs to manufacture, distribute, and store a physical entity. It was predictable, and evolutionary. That predictability, however, rests on a set of presumptions about dependable limits: constrained space, investment, distribution networks, shipping speed, etc.

Such constraints, which comprised a dependable stake holding down publishing as we knew it, dissolve in the online environment. Without that stake, the industry we knew is set adrift — and that scares many publishers.

Floating Free

I've been involved with a number of electronic-publishing projects, and I have found no costing and pricing models for digital publications that fit the sort of simple spreadsheet models possible with print publications. The variables are too diverse and determinative.

Instead, I've been working on a sort of multilinear, multileveled "appropriateness matrix" that can help define the parameters of online-publishing projects and their cost-recovery models. Though far from complete, its outlines can be seen in a set of driving contexts listed in the tables. It's insufficent to simply count up the number of kilobytes like we did pages, or gauge the print run on previous experience. Entirely new constraints (and opportunities) change the decision equation.

Mission = Destiny

"Cost recovery is destiny," I've said more than once, and I also hold that an organization's mission should dictate cost-recovery models; therefore the mission becomes the destiny, if you will. For nonprofit publishers for whom dissemination holds priority, new models are possible. For associations, cost-recovery models are different than for corporately owned publishers. Fiction publishers have different purpose for their publications than reference publishers.

In the new environment, there are indeed mechanisms of nearly "outlay-free publishing" — though it's worth discriminating that from the mythical "cost-free" publishing. With enough volunteer labor, or hierarchical control, or browbeating, or passion, virtually anything can be made available "for free" online. Like any other volunteer effort, those projects are hard to sustain.

Endless Options

We have plenty of systems for restrictive dissemination, and they are becoming more easy all the time: Logins, passwords, cookies, secure transactions, etc. can be established. Cryptolopes, on-demand charged PDF files, and other chunk-by-chunk payment systems can be implemented; library and institutional subscriptions, allowed domains, and the like can be set up for year-by-year payment systems.

There are now online bookstores, print-on-demand jobbers, and microinventory warehousing systems that allow an author or publisher to print only as many copies of a book as there are purchasers. (See Scott Bennett's article for more on that.)

There are also now examples of publishers putting up the full text of nearly all their books, in HTML or in page images, making them available without charge, and seeing no drop in sales — in fact, seeing the opposite (the "selling more by giving it all away" approach). That has been our experience at the National Academy Press.

That array of models only begins to describe the arc of possible cost-recovery and economic models. More complex — and more precise — models would take into account the trajectories of organizational mission, frangibility and repurposability of content, the desires of the audience, etc., each with its own set of imperatives.

Planned vs. Organic

In Lincoln, Nebraska, where I adolesced, the streets are laid out on a grid — A through Z and 1 through 118. Lincoln is an "intentional city," which did not exist until it was platted in the late 1800s as a compromise between two rival capital-wannabees (Nebraska City and Omaha). Lincoln's streets were laid out long before people inhabited them. "O Street" was planned as the main street, and other throughways — wider, or twinned one-way streets — were crafted for maximum efficiency. Building, traffic, and commercial rules of development were established early on and are still largely adhered to.

The Czech Republic's capital, Prague, is Lincoln's opposite: Streets meander from place to place, many only one oxcart (or two people) wide; nearly all the traffic patterns there developed by evolutionary accretion, rather than by plan. Serf paths between shantytowns around the silver barons' demensnes evolved into cart paths, into carriageways, into automobile roads. The physics of a gradually developing real world — through a multicentury evolutionary process — determined Prague's layout.

Which is "better"? Ask their inhabitants, not their visitors. Best is home, for the most part. Which is most efficient, however, may be an easier question to answer. Certainly for rapid traffic in and out and within, Lincoln wins on nearly all counts of efficiency. Excepting mass transit (such as Prague's Metro vs. Lincoln's occasional buses), the efficiency of planned traffic is hard to beat.

A traffic system designed and established with a mobile commercial culture in mind operates differently from a system that developed organically: as my daughter would say, "Duh." However, that essential element of an underlying structure designed for efficiency helps explain to me the transformative shift in publishing that I expect to see over the next two to three years.

The Standards-Launched Acceleration

In the digital environment — an artificially constructed system designed and established with a mobile and communication-intensive culture in mind — development and innovation cycles are unbelievably quick. I've got a rule of thumb regarding Web software development processes: The first time you design something within a standards-based framework, it takes a month (or a year), the next time a week (or a month), the next time a day (or week), and the fourth time, there's a new software tool that makes it nearly drag-and-drop.

Not all software-development cycles follow this trajectory, but most Web projects do: first Web servers, first Web sites, first CGI scripts, first Java scripts, first encryption, first database-to-Web, first form-to-update-database, etc. That doesn't seem true on culture- and trust-bound foundational aspects (micropayments is one glaring example); nonetheless, if this quasi-exponential cycle is applicable to other Web business, then hold onto your hat, because XML is in the first phase of the cycle. XML has the potential to make nearly all Web stuff — publishing, translations, searching, identifying — nearly friction-free.

Endless (R)Evolution

Once we get to nearly friction-free publishing, everything may change (again). When software agents roam the Internet initiating "automatic auctions" for answers to questions, or when a printstore the size of a Kodak kiosk serves made-to-order books ordered from Amazon.com and BarnesandNoble.com in whatever size and format you specify, it's hard to know how small, medium, or large publishers (and authors) will fare.

The matrix of appropriateness will be changed (again) as well. It is unlikely that any algorithm could accurately predict the "appropriate" publishing and cost-recovery mechanism for a particular publication for long, since the contingencies will be changing so fast. Humans will stay involved in the publishing process for the foreseeable future, making judgments, taking gambles, developing new economic cost-recovery models.

I tend to be optimistic about the results — I believe that more material will be available to more people and publishers will find new and better ways to survive, profiting appropriately in order to grow and make more content available in more useful ways.

I hope. We shall see. Regardless, the more we work on enlarging our understanding of the "appropriateness matrix," the more likely we'll be to select the appropriate medium, audience, publisher, staff, and context for our publishing projects.

Michael Jensen is Director of Publishing Technologies at the National Academy Press, publishers for the National Research Council, National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. Before joining the NAP he was Electronic Publisher at the Johns Hopkins University Press. Mr. Jensen has been involved in publishing on the Internet since 1990 and is a frequent speaker and consultant on electronic publishing issues. He has directed or participated in such projects as the first searchable online book catalog, several CDROMs, the online publication of several large reference works for Johns Hopkins University Press, and the pioneering online journals project of the Johns Hopkins University Press, Project Muse. You may contact him by e-mail at mjensen@nas.edu.

JEP: The Appropriateness Matrix Sidebar to: COST RECOVERY AND DESTINY