Do We Need Different Revenue Streams?

RevenueMarc Andreesen (he of web development fame) outlines the most obvious eight business models for the news for now and in the future, as reported by Justin Fox in this month’s issue of The Atlantic.

It occurred to me when reading these, that libraries are also looking at different models of raising funds, but not always with a clear framework. This might be interesting for a beginning discussion.

      • Advertising. This is obvious in the news, less obvious in libraries yet we have taken it up as urban public libraries sell space on library cards for a set period of time, accept sponsorships for programs (summer reading comes to mind) and advertise book sellers on their web site whereby customers can order a title not readily available through their local library.  But what do we mean by advertising? What are our policies? What are our goals in developing an advertising revenue stream?
      • Subscriptions. We don’t tend to have subscription except that the movement toward the term “members” rather than “patrons” or “customers” tends to denote a subscription model, whether through a dedicated fee (the province of Alberta, e.g., requires charges for library cards which some systems cover) or recognition that tax dollars are a levy and the registration fee providing formal membership.
      • Premium content. Now this would be an anathema for most libraries (think advocacy for net neutrality) but we do provide premium services for a fee. And this is happening more and more. (Next week there will be a guest blog on fee for service in a public library.) The most common would be services for business. But others include special programs. And then there are fines: is this a premium (extended use fee) or a punishment (fines like the police)—or a micropayment, see below.
      • Conferences and events. There seems to be a large market here, sometimes taken up by community centers and other not-for-profit organizations. I wonder how long it will be before we are offering special events (other than our usual fundraisers and used book sales which fall into this category). Many community issues could be addressed in this way for nominal fee, within policies of course and with clearly articulated costs (overhead, e.g.).
      • Cross-media (your news generates books movies etc.). There has been talk for years of the library as publisher but it has never been taken up as a business model really.
      • Crowd-funding. We may need to investigate this further and develop some of our specialized software and initiatives and innovations through crowd funding. It would certain provide a platform and profile…
      • Micropayments. This is usually defined as a payment of a few dollars. We are masters at this with fines, e.g., but I suspect that most on-site payments cost more to collect than they are worth (but it teaches them a lesson! Decidedly the moral high ground…).
      • Philanthropy. We are getting better at this. We are even collecting evidence and coming to realize that the biggest donors tend to be non-users so we have broadened our appeals. Many directors/CEOs see this as an important role and, especially in academic libraries, are moving vigorously in this area, of necessity.

We need to talk more openly and frankly about revenue, beyond the local council or broader institution. We need to set policies and establish responsibilities and targets for improved support. This may be one way of looking at it.

About Ken Haycock

Ken Haycock is currently Research Professor of Management and Organization at the Marshall School of Business, University of Southern California, where he coordinates graduate programs in Library and Information Management.

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3 Responses to Do We Need Different Revenue Streams?

  1. Laurie Bonnici May 27, 2014 at 7:40 pm #

    Advertising and subscriptions may have already found their way into the library through the innovative application of social media by young information professionals. They are posting library news about new arrivals (even e-books), programs, etc via Facebook and Twitter. And some have created blogs with RSS feeds which “customers” can subscribe to in order to keep up on the latest news, events, etc. Sometimes the change is seen from the bottom up.

  2. Amelia June 3, 2014 at 5:58 pm #

    Some other thoughts:
    > Contracting out librarians as research consultants to corporations
    > Marketing library spaces as chargeable, desirable places to hold events that run from professional (conferences, as you’ve alluded to, seminars, etc) to personal (weddings, film productions, career fairs)
    > Having ticketed library events – never understood why this was so taboo, especially if you have to break even on the cost of the event for factors such as catering and speaker honorariums

    Revenue shouldn’t be seen as necessary evil. For many libraries, it’s the only way they can manage to stay open for a few more months or years. But you have to create a sustainable revenue model and not one that just barely creates a surplus.

  3. Karine Parry September 26, 2014 at 10:53 pm #

    Libraries seem to need more entrepreneurial revenue streams. As one article suggests, these revenue streams may be viewed less as rivers or streams, and more as branches of trees with determined lengths. New revenue streams probably mean less of the old money coming in, i.e. from institutional and/or state funds, and more from in-house services supplementing the library, including: events, special book signings, the income from Friends used book sales in public libraries, coffee income from cafes, school events at academic and school libraries and donations from partners and/or generous contributors. For a service that has been unquestionably needed for years, it is sad that of recent this concern is even here. The old revenue funds really should be enough. The revenue depletes when the need diminishes, or the need appears to diminish. Perhaps these funding organizations have just lost sight of real value.

    Transitioning library infrastructure into modern day libraries with technology upgrades, databases to manage information, and new repositories to store material digitally may help bring back some of these older revenue streams interested in supporting traditional libraries efforts to manage the changing times. Librarians demonstrating an interest in improving their technical skills and advancing their digital skills may also help move this process along.

    Agreed, revenue should definitely not be seen as a necessary evil. There are many ways to work with this recognized need. The difference now is that librarians just need to pay more attention to this department funding their business. They need to be more financially aware now for the benefit of their particular organization and to meet the growing demands of their users. In many ways, taking a handle on the finances is probably a benefit for librarians, as it demonstrates effective financial management of their budgets and measurable results for how they can and have effectively allocated their resources responsibly. Libraries with a grasp on fundraising and donations may probably have a edge above institutions still adapting to the finer points of a minimal budget.

    Library patrons can definitely utilize RSS feeds to stay updated with information and learn how their libraries are doing what they can to improve the overall user experience.

    Thank you,

    Karine
    karinepa.2016@marshall.usc.edu
    MMLIS candidate 2015′

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