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INFORMATION MARKET OBSERVATORY (IMO)


THE INTERNET AND THE EUROPEAN INFORMATION INDUSTRY


Luxembourg, September 1994
IMO Working Paper 94/3 - Final


Contents

ANNEX: GLOSSARY OF TERMS


Highlights

This paper was drafted by Policy Studies Institute in London on behalf of the IMO. Sources include national press and information industry newsletters, proceedings of the 1994 Internet World and Document Delivery World Conference (Mecklermedia), the Internet 2000 report (Infonortics), Reuters Textline and FT Profile databases and discussions with industry players.

1. INTRODUCTION

The aim of this paper is to provide a brief review of developments in the Internet as they relate to the European information industry.

A great deal has already been published in newspapers, journals and books on the history and technical make-up of these networks, and directories exist giving information about services available and how to access them. This paper will only touch briefly on history, technology, growth in usage and main functions. Instead, it will concentrate on the opportunities for information companies and the relative advantages and disadvantages of network publishing in a number of sectors. Services available on the networks are described in so far as they provide a useful indicator of current activity and recent developments. A glossary of terms is provided as an annex to this paper.

2. HISTORY, BACKGROUND AND RECENT DEVELOPMENTS

Concepts of distributed computing which were to form the basis of the Internet were around as early as 1960, although it was not until 1969 that the US Defense Department decided to build the network which later became Arpanet. Links with academic sites in the UK and Norway were established during the 1970s, and in 1982 the TCP/IP protocol for data transmission on the Internet was finalised. A year later, the military and defence functions of Arpanet were separated out into a different network, and the National Science Foundation took over responsibility for the non-military side of the network, later to become NSFnet.

During the late 1980s, interconnections were made with a European network now known as EUnet and with Aussienet in Australia, and commercial users began gaining limited access in 1989. 1992 was a key turning point, with Internet development and consolidation initiatives by the US Government, and the development of the first World Wide Web program at CERN (Center for European Nuclear Research) in Switzerland.

Meanwhile, national research networks in Europe were taking hold in academic communities. JANET in the UK, SURFnet in the Netherlands, DFN in Germany and NORDUNET in Scandinavia were amongst the early developments. In some countries, national networks were formed from smaller academic networking projects, funded and developed on a regional basis. This was the case with RENATER in France, which forms a backbone to regional networks in areas such as Rhone-Alpes, Alsace and Lorraine. Interconnections were later developed with the European backbone networks EBONE and EuropaNET, and with NSFnet.

Many of the European networks have maintained more of their academic identity than the Internet. Full access to European research networks has tended to remain restricted to the academic and educational communities, although more recently countries like France have begun to offer access to commercial users. Nevertheless, commercial users in Europe have tended to do their networking on the Internet, whilst early academic network publishers have often made their products available on their national network first, later allowing access from other European networks and from the Internet.

2.1 Some Recent Developments

2.1.1 Commercial Information Spaces

One of most interesting recent developments for commercial information providers has been the announcement of initiatives to create commercial `areas' on the Internet. In April 1994 it was announced that CommerceNet was to be set up by a consortium of US companies with US$ 6m (ECU 4.9m) funding from the US Government. CommerceNet is intended to provide a commercial space where business can be transacted on the Internet. The consortium includes Hewlett Packard, Apple Computer, Sun Microsystems, Lockheed Corp. and the Bank of America. CommerceNet development is led by the research firm Enterprise Integration Technologies, Stanford University's Center for Information Technology and the Western Research and Educational Network in Northern California.

Initially, companies will use CommerceNet for business to business electronic trading, although in the longer term it is expected to be used by a much larger range of companies for all kinds of electronic sales, marketing and transaction functions. It has been suggested that CommerceNet will handle business transactions for some 3,000 companies by the year 2000. Meanwhile, information providers are already looking to CommerceNet to provide a solution to the problem of selling commercial information services on the Internet. Peter Meekin of Dun & Bradstreet said that D&B `expect to gain valuable insight and experience concerning electronic commerce, and to offer a broad range of business information services via CommerceNet' (Financial Times , 6/6/94).

Since its launch, CommerceNet has had over one million requests from approximately 23,000 different host computers. Most of these have been enquiries to directories of products and services and enquiries about commerce-related resources, such as tools for information providers. Experience gained from pilot applications will be used to help define best business practice. One of CommerceNet's key goals is the development of direct payment mechanisms through financial institutions which are members of the CommerceNet consortium.

Meanwhile, the US publisher and conference organiser MecklerMedia has developed its own commercial space on the Internet: MecklerWeb. MecklerWeb will offer an electronic marketplace, where company, product and promotional information can be presented in broad subject categories such as law, medicine, sports and technology. Participating companies will pay an annual fee of US$ 25,000 (ECU 20,500) for the right to post their material on MecklerWeb. Registered users will access the promotional information free of charge, as well as subject-related bulletin boards and discussion lists which may be administered by industry associations. The aim is to attract potential customers to use the MecklerWeb, rather than distributing promotional material to large groups of potentially uninterested Internet users.

Initiatives like these will be essential if commercial information providers are to find adequate and cost-effective means of billing and if they are to escape the wrath of those in the network community who are violently against the commercialisation of the networks.

Commercialisation, however, does now seem inevitable. The purchase of Internet Shopping Network in September 1994 by Home Shopping Network supports this view. Home Shopping Network, the biggest US cable TV shopping channel, evidently believes that the Internet presents a major opportunity for expansion of its business, in spite of the fact that Internet Shopping Network is at present a relatively small operation. It was founded in June 1993 and currently offers around 20,000 computer-related products from 1,000 companies. Internet Shopping Network say that so far 100,000 people on the Internet have used their service. Home Shopping Network intends to extend the product range and sees Internet shopping as a forerunner of interactive television.

2.1.2 Retrieval and Navigation Software

A great deal of interest has been focused recently on the development of software tools which help users to navigate the networks and to identify information of interest. WAIS (Wide Area Information Server) has become the most familiar form of software access to Internet resources for information professionals, whilst Gophers offer a lowest common denominator, menu-based facility for generalist users. World Wide Web (WWW) has brought Internet retrieval software one step further, offering hypertext links between resources on the same or related topics. By December 1993, there were 623 WWW servers on the Internet, up from around a hundred in June of the same year. Hundreds of thousands of hypertext documents are now available via WWW.

The availability of WWW, together with Mosaic, has been seen as one of the biggest catalysts in Internet growth. Mosaic is a windows-based front-end to the WWW, released by the US National Center for Supercomputing Applications (NCSA) at the beginning of 1993. The graphical user interface offered by Mosaic has made it popular amongst users, who so far have been constrained only by the ability of their computers to run the programme. Mosaic is available for free downloading from a number of Internet sites. The number of Mosaic downloads from the NCSA server has risen dramatically since the middle of 1993, peaking in February 1994 with over 55 thousand downloads in one month.

Meanwhile, the private sector is also looking into interface software development. General Magic, for instance, recently launched two new products - Magic Cap and Telescript - which are intended to help users to access, navigate and manage information on network and static information services. As information overload becomes more of an issue, this area is likely to see considerable activity and competition within the software industry.

2.1.3 Development of European High Capacity Networks

A concerted effort is taking place within many European countries to upgrade existing 2 Mbit/s national networks, rolling out ATM-switched broadband networks and thus enabling applications such as multimedia information access and video conferencing. This should bring at least parts of the European network infrastructure up to the standard of that currently in use and development in the US.

Broadband networks allowing communications at 34-155 Mbit/s have been developed in the UK (SuperJANET), the Netherlands, France and Norway (Supernet). Work on upgrading networks is also taking place in Germany, Finland, Austria and Sweden. At a pan-European level, an agreement to develop a pilot ATM network in Europe, originally signed by six European network operators in November 1992, now has 18 signatories. By 1996, EuropaNET should have been upgraded to enable interconnection at up to 34 mbit/s .

2.1.4 The Success of EUnet

EUnet GB Ltd is Europe's largest commercial Internet provider, and its success has been seen as an indication that European organisations have finally embraced the Internet. It began operating in the UK in 1982 and now operates across 25 countries. EUnet offers mainly leased line connections to commercial users of the Internet, and its customers are usually bulk users. In its 1993 accounts, EUnet announced that it had 10,000 customer organisations in Europe, with an estimated 13,000 individuals connected in the UK alone. Turnover for 1993 was just under [[sterling]]1 million, with a predicted growth in sales of 100 per cent during 1994.

EUnet is not the only company of relatively modest origins to have thrived on connecting European companies to the Internet. Pipex, another commercial Internet provider in the UK, has also enjoyed considerable growth over the last year, and now offers a portfolio which includes leased line and dial-up services, as well as ISDN dial-up.

2.1.5 Information Infrastructure Policies

During the course of the last 18 months, major government initiatives have been launched in the EU, US, Canada and Japan which focus on the need to create information infrastructures. In the US, this has taken the form of the National Information Infrastructure (NII) initiative. The plans for a Common Information Area for Europe were first described in the White Paper on Growth, Competitiveness and Employment. This was followed up by the Bangemann report of June 1994 and the European Commission's Action Plan for an Information Society.

The Internet, with its dramatic growth rates and ever-widening range of applications, has been one of the most important reference points for these initiatives. The future of information infrastructure programmes is closely bound up with that of the Internet, to the extent that it is now almost impossible to mention one without the other.

3. GROWTH IN INTERNET USE AND MAIN FUNCTIONS

At the beginning of 1994 an estimated 25 million people were using the Internet in 137 countries, using some 2.2 million host computers. The Internet Society's figures for June 1994 indicated that the number of hosts had now risen to just over 3.3 million, (representing an 81 per cent increase since the previous year). The number of users is now thought to be in the region of 32 million. One million new hosts were added in the first six months of 1994 alone, with much of this growth attributable to countries outside the US (see Table 1 page 7).

If growth continues at the expected rate (and as yet there are no signs that it is slowing down) the number of Internet users could double by next year. The Internet Society has forecast that the number of hosts could rise to 5 million by 1995.

At the beginning of 1994, the Internet linked 7,991 networks worldwide, an increase of 104 per cent since the previous year. Whilst the US accounts for around 55 per cent of the networks linked to the Internet, European networks made up around 25 per cent at the beginning of 1994, having grown by 125 per cent since the previous year. Within Europe, France had 593 Internet networks, Germany 542 and the UK 511. Meanwhile, growth rates of over 200 per cent were sustained in the Middle East and Central and South America over the same period. Growth in the Asia Pacific region over 1992/1993 was around 85 per cent.

This exponential growth is partly thanks to major corporations and multinationals, many of which have wholeheartedly embraced the Internet and provided access in bulk to their employees. Digital Equipment Corp. is one of the biggest users. It has around 31,000 computers linked to the Internet and makes around 1.7 million external e-mail exchanges a day. The academic community is still heavily represented on the Internet, but home access by individuals for work or entertainment purposes is becoming increasingly common, and SMEs are also thought to be joining in large numbers.

Table 1: Internet Hosts Worldwide (June 1994)

Country             Number of Hosts   Percentage of    Percentage  Change                                           Total             Since Jan  1994        
US - educational 856,234 27 41 US - commercial 774,735 24 36 US - government 169,248 5 31 US - defense 130,176 4 26 US - non profit org. 66,459 2 31 US - net operator 30,993 1 146 US - local 16,556 1 153
US 2,044,401 63 38
UK 155,706 5 37 Germany 149,193 5 51 Canada 127,516 4 48 Australia 127,514 4 42 Japan 72,409 2 69 France 71,899 2 117 Netherlands 59,729 2 43 Sweden 53,294 2 40 Finland 49,598 2 na Switzerland 47,401 1 24 Norway 38,759 1 22 Italy 23,616 1 38 Spain 21,147 1 79 Austria 20,130 1 30 South Africa 15,595 < 1 42 New Zealand 14,830 < 1 157 Denmark 12,107 < 1 175 Belgium 12,107 < 1 147 Poland 7,392 < 1 55 Portugal 4,518 < 1 25 Ireland 3,308 < 1 103 Greece 2,958 < 1 249 Luxembourg 420 < 1 37
Source: Internet Society, July 1994

For many Internet users, however, access to formal information services is probably fairly low on their list of priorities. Transfer of large files using FTP (File Transfer Protocol) is still one of the most commonly used functions amongst academics. Another big attraction for both companies and academics using the Internet is electronic mail, and this probably accounts for the majority of their usage. File transfer and electronic mail on the Internet are considerably cheaper than other equivalent manual and electronic communications methods. They also enable users to communicate with a larger community than many commercial value-added networks (VANs).

Bulletin board and Usenet browsing, and point-to-multipoint communications using bulletin boards and Listservs probably make up the third largest share of Internet use, although there is no accurate way of measuring exactly how users spend their time on the

Internet. At the end of 1993, there were thought to be over 50,000 small-scale, `cottage industry' bulletin boards in the US alone, with new ones appearing every week in their hundreds. The number of articles posted on Usenet rose from 35,000 to 43,000 between February and December 1993.

Access to formal and paid-for services such as electronic journals, full-text databases, bibliographic and document delivery services has largely been confined to the academic sector, mainly because most product development has taken place in this area (at least in Europe), and because collaborative payment and access mechanisms have been set up amongst academic institutions. More recently, a number of business and consumer services have been loaded onto the Internet, mainly by US companies, although we are yet to see to what extent they are taken up by the user community.

4. PROSPECTS FOR THE EUROPEAN INFORMATION INDUSTRY

The threats and opportunities for publishers on the Internet are slowly becoming apparent. Many publishers and information providers were initially attracted by the possibility of reaching a vast worldwide network community, combined with the ability to target specific user groups more closely than ever before. But as experimentation got underway, serious concerns arose over the lack of reliable and standardised copyright management, security and payment systems. It also became apparent that developing information services for network use could be technically challenging and that network users constituted a very different market than those for other kinds of information products and services.

Considerable effort has already been put into developing solutions to these and other issues, although progress has, by and large, been slow. In this paper, we look at three of the biggest problems for network publishers: copyright management, payment systems and investment. We also examine the opportunities for academic, business, government and consumer information providers, as well as future opportunities in schools publishing.

4.1 The Problems

Two of the problems highlighted in this paper, copyright and payment systems, relate to security of information and of information services. However, the overall problem of security on the Internet is one which has much wider implications. A major cause for concern is the integrity of message content and the authentication of message origin. This is particularly important where communications are of a transactional or contractual nature. Technology solutions are already being developed for EDI (Electronic Data Interchange), and these may be transferable to the Internet environment, but common standards are yet to be developed for message integrity and origin verification.

Another security area which has sparked considerable debate is confidentiality and encryption. Many users and prospective users of the Internet are worried by the apparent ease with which private messages can be read and tampered with by other Internet users. An Internet security standard, known as PEM, has been developed, but political issues, such as the question of access to encrypted messages by government security departments, continue to cause controversy.

The resolution of these and other security-related problems are of prime importance to the future use of the Internet. It will also be a significant factor in the development of an environment in which commercial information services can flourish.

4.1.1 Copyright

In all forms of electronic publishing, the protection of copyright and measurement of data use is a problem. Even in relatively well-established areas like CD-ROM, encryption and metering devices have only recently been developed which can incorporate copyright and royalty charges for downloaded files. On networks like the Internet, the problems are compounded by the ease with which files can be mounted on bulletin boards and illegally copied to multiple sites, at almost no cost to the perpetrator.

Prosecutions have already taken place in the US for software piracy on the Internet, a notable case being the one of the 20 year old student at the Massachusetts Institute of Technology, who used university workstations to set up a bulletin board for copying and distribution of popular software programmes. As yet, there have been no cases as big relating to the systematic abuse of copyrighted information content, although most of the information industry has little doubt that copyright abuse is taking place. As yet we have no clear indication of how widespread illegal copying of information on the networks is, but the fear of it is enough to put many companies off publishing on the Internet.

Research and development work is taking place in both the private and public sector for the development of copyright and security mechanisms for network publishing. In Europe, a number of EC-supported projects are underway. The CITED project, whose aim was to establish mechanisms for Copyright in Transmitted Electronic Documents, was funded by the EC's ESPRIT programme and came to a close in April 1994. European electronic publishers, computer industry experts, a national library and a barrister came together to examine possible solutions to copyright protection in the digital environment.

One of the demonstrators to come out of the CITED project was ADONIS, which provides a copyright management and payment mechanism for document delivery. The CITED model uses smart card technology and provides users with IDs and account codes. It has been suggested that the CITED model could be used for commercial and academic services and could incorporate differential pricing levels, although a CITED agency would need to be established to oversee the collection and distribution of royalties. Much more work will need to be done on this aspect, although in the meantime, other private sector initiatives are emerging which may offer solutions (see the section on Payment and Billing below).

In addition to the fear of copyright abuse by network users, many publishers are concerned that intermediaries such as libraries and teaching institutions will develop network information services without sufficient respect for the copyright owners. Some university libraries claim that the document delivery and current awareness services offered by commercial information providers are too expensive and inflexible, and would like to run their own services. The lack of established permission-granting and royalty payment mechanisms for services of this kind is a serious concern.

The Library and Information Network Copyright and Interlending Working Party of the Oxford Library Region in the UK recently carried out a study of publishers' reactions to the use of journal content pages and selected articles for a current awareness service. A letter was sent to around 40 European publishers requesting permissions. Whilst learned societies tended to give permission freely, some publishers gave permission for contents pages only and others refused all permissions. These results indicate a mutual distrust evident in most discussions between publishers and intermediaries on copyright-related issues in network publishing.

However, most libraries do not seek to enter into competition with or breach the copyright of publishers for its own sake: they do so because publishers have not developed equivalent services themselves, or have developed services which the library and academic community consider to be too expensive. There is clearly a great deal of work to be done in reaching agreements between copyright owners and intermediaries, particularly in establishing pricing mechanisms which are acceptable to both parties.

Similar problems are starting to emerge in the development of electronic course materials by universities. An ELINOR project at De Montford University in the UK, for example, has put together a corpus of electronic materials drawn from text books and other key learning sources for use by students on JANET. It took 18 months to get a set of 50 copyright clearances for one course. There is a danger that universities will be tempted to ignore publishers' copyright because there is no simple way to request permissions and make copyright payments. The EC COPICAT programme, (Copyright Ownership Protection in Computer Assisted Training) is intended to develop solutions to these problems in the context of distance learning.

4.1.2 Payment and Billing

After copyright, the lack of universal payment and billing mechanisms represents one of the biggest reasons for publishers' reluctance to offer information products and service on the networks. Electronic transactions pose a significant problem for companies offering on-demand information on the Internet, especially where unit prices are small and where different currencies are in use. Document delivery services are a case in point. Connecting smart card and credit card readers to library and public access terminals is one option which is already being explored. Another is the use of generic electronic payment systems which operate across a range of product ordering and information services on the Internet. In July 1994, the Dutch company DigiCash announced a service of this kind.

DigiCash's E-Cash has been likened to a virtual, digital equivalent of an American Express card. Users register with DigiCash, providing bank, credit card and security details and a chosen password, then decide how much E-Cash they want to have available on their computer hard disk. Once registration is complete, users can pay for products on the Internet, transferring E-Cash units to the vendor's computer. Expensive billing procedures and bad debt are eliminated and, according to DigiCash, participating vendors avoid making losses on currency conversions, even on low-price products. DigiCash expects E-Cash to be particularly suited to software sales, especially shareware, although there is no reason why it should not also be used for information services.

As yet, no universal or even dominant payment system has emerged for Internet purchasing. We can expect the launch of many other payment systems in the future, some of them proprietary and linked to specific vendors or product ranges, others, like E-Cash, intended to create a universal electronic currency. As a result, users risk collecting the electronic equivalent of a wallet-full of plastic and vendors may find themselves having to administer a range of transaction and billing systems.

A natural development would be the establishment of a collaborative information access, ordering and payment system by electronic publishers. This might resemble, or be an extension of, the CITED project described above. A system of this kind would perhaps be more viable than universal systems such as E-Cash in that they could be developed with the needs of the information industry in mind, and could incorporate copyright management mechanisms. It would also help to create a `space' on the Internet where information users could browse and order information products from a number of suppliers, having already decided that quality information was something they were willing to pay for.

4.1.3 Technical and Financial Investments

It was initially believed that network publishing would require less investment on the part of information companies than other media such as CD-ROM or online. However, even a basic bulletin board service using a Unix host and leased line connection can be costly to run.

A significant investment in human resources is also required for the setting up, administration and support of services and for acquiring new staff skills. Silver Platter's Christopher MacPhail warned of underestimating the amount of staff time Internet services could take up: he indicated that SilverPlatter had used up several person-months just setting up its host and getting a few key applications going. Many information providers have started the ball rolling by offering product information and customer support rather than direct access to information resources, setting investment against market development activity.

Even electronic publishers which have adapted existing electronic products for network use have found it necessary to re-develop search software and interfaces. Many have also carried out expensive re-coding of databases into standardised formats such as SGML and Acrobat in order to ensure standard on-screen presentation and printing for customers using technology of varying capabilities. On the other hand, much of this work will facilitate future re-exploitation of information resources across a wider range of static and networked media. Providers of software archives on the Internet, such as SIMTEL, have begun to create CD-ROM versions of their archives for local searching by customers, and similar developments are likely amongst information providers.

In the CD-ROM, online and multimedia sectors, complex support industries have emerged, allowing information companies to opt for external product design, development, hosting and distribution. In the coming months and years, we are likely to see similar developments taking place in the network environment.

In July 1994, for instance, Dataware Technologies announced a range of software products and services designed to take much of the burden of developing, loading and running Internet services from European and US network publishers. The Dataware product range allows publishers to install off-the-shelf Internet servers for in-house management (incorporating a multi-platform version of the BRS/Search software), or to hand over all hosting and management tasks to Dataware, which will act as a kind of service bureau. Cityscape Internet Services (CIS) in the UK also offers consultancy, design and implementation services for companies setting up on the Internet.

The range of production tools, software and server products, bureau and consultancy services available to network publishers is likely to multiply rapidly, spawning a support industry made up of major information and software companies as well as smaller development and production companies.

4.2 The Opportunities

4.2.1 Academic Publishing

Academic and scholarly publishers in Europe were amongst the first to recognise the potential importance of the Internet as a publishing medium. There is still a great deal of fear and suspicion surrounding copyright protection and the migration of existing business to a potentially non-lucrative medium. Yet most of Europe's major academic publishers have recognised that they cannot simply ignore the threats and opportunities offered by network publishing, and some of the key players have taken lead roles in developing network products.

In recent years, academic journal publishing has faced serious difficulties, with library budget cuts, falling subscriptions and soaring journal prices. The traditional process of producing and disseminating refereed journals involves delays in publication which are increasingly unacceptable to the academic community. Network publishing offers some obvious advantages to academic and scholarly publishing, and initiatives by academics to set up their own peer-reviewed electronic journals and bulletin boards have forced publishers to take network product development seriously.

Elsevier and Springer-Verlag have both taken active roles in developing electronic journals in collaboration with US universities and publishers. Elsevier started out with 42 materials science journals delivered as part of the TULIP project (The University Licensing Program). Springer began in July 1993 with two radiology journals on the Red Sage service. Both have now substantially expanded their services. These and other electronic journal publishing initiatives in the US (including the UMI and Kodak Library Image Consortium projects) have been supported and co-ordinated by the Coalition for Networked Information, a project founded in the US in 1992. Another interesting development is the work carried out by Bioline Publications to bring the journals and newsletters of other biosciences publishers to the Internet.

Some of the smaller publishers have experimented with electronic journals provided free to print subscribers. Others have offered electronic versions at the same price or cheaper than print equivalents, or created new journals specifically for the network environment. Few, if any, are achieving profit. The Online Journal of Current Clinical Trials recently folded because insufficient articles were submitted. There will need to be an intensive period of market development, market research and negotiation with user groups and intermediaries before academic network publishing becomes economically advantageous. Network delivery will nevertheless be an integral part of the future for academic journal publishing.

Traditional document delivery services have also developed and mutated in the context of network publishing, bringing into being a new range of CAS-IAS services (Current Awareness Service - Individual Article Supply). These provide users with contents pages of journals and other publications, and allow users to select and order individual articles, usually for delivery by fax or post. Some CAS-IAS services also perform an alerting function, providing users with details of articles to be published in forthcoming journal issues.

Many of the commercial document supply and journal subscription companies like SWETS, EBSCO, Faxon, and Blackwell have developed their own services for network delivery, as have libraries and public document supply agencies like INIST in France, Tilburg University in the Netherlands and the British Library in the UK. Some of the major hosts (including Data-Star, Dialog and STN International) provide journal article ordering on the networks. A few major journal publishers have developed their own alerting and document delivery services, Springer Verlag and Elsevier being notable examples. Learned society publishers such as the Institute of Physics Publishing, the Institute of Electrical and Electronic Engineers and the British Medical Association, are also undertaking experiments and development work.

On-demand network ordering and delivery is also being used by text book publishers. McGraw-Hill's PRIMIS service has been one of the leaders, allowing universities and other network users to download and print locally sections of text books and teaching guides on a pay-per-use basis. More recently, however, there have been rumours that the PRIMIS service has attracted insufficient customers and is to close.

Document delivery, CAS-IAS and alerting services offer publishers an opportunity to supplement falling income from journal subscriptions. But there are fears that, by providing such services, publishers will further undermine their subscription base, and that income from network services will be insufficient to make up the short fall. The academic community claims that commercial services are priced too high. Competition from document delivery companies and the public sector is strong. As a recent multiclient study on document delivery by Electronic Publishing Services pointed out, there are no easy answers to this dilemma, but it is clear that academic publishers who ignore document delivery in the network environment do so at their peril.

4.2.2 Business Information Providers

Those business information providers which have begun working on products for delivery over the networks have tended to be those for whom electronic publishing is already a core business element. They have also tended to be those companies with a strong user base in the academic, as well as the business community.

Most of the big online hosts, such as Data-Star, ESA-IRS, Mead Data Central and STN International can be accessed by gateway from the Internet. Some also offer product information and support via electronic newsletters and bulletin boards. At the US National Online Meeting in May 1994, Dialog announced that it would build a World Wide Web Server containing product and support information. Dialog's newsletter and database catalogue will also be accessible via Mosaic. At present, Internet access accounts for only two per cent of Dialog's total connect hours.

Early in 1993, SilverPlatter Information decided to extend its information publishing activities from CD-ROM to the Internet. It has concentrated most of its early efforts on marketing and customer support activities. In November 1993, it launched an unmoderated discussion list entitled SPIN-L and gained around 300 subscribers in the first week. At any one time, SPIN-L has between 300 and 500 subscribers from some 25 countries, discussing technical questions, comparing products and making suggestions for new products and software features. Customers can reach SilverPlatter personnel by electronic mail, and access support and product information via generic mailboxes.

Dow Jones is also diversifying into network publishing, providing Internet access to its personalised news monitoring and alerting service, DowVision. The Internet version will display some information free of charge, inviting users to subscribe for access to the full service. This initiative reflects Dow Jones' recognition of the fact that customised business news and information services of the kind already available by online, fax and electronic mail could form an important Internet application.

These few examples give an indication of the strategies which many of the leading business information providers are implementing in order to explore the opportunities of network publishing. They see the Internet as a way of getting closer to their customers, providing better support and opening up new marketing opportunities. By starting out with service promotion and user support on the Internet, they intend to develop their understanding of the technology and the market, whilst exploring the potential for full access to information services in the future. It is unlikely that many will achieve profits in the short term, but the long-term opportunities appear sufficiently attractive to warrant significant investment in market development.

4.2.3 Government, Public and Statutory Information Providers

The scope for government information dissemination via the Internet is potentially enormous. In the US, the opportunity was recognised early and, as a result, a wide range of valuable public domain data sets are now available on the Internet, ranging from mapping and census information to non-confidential CIA databases. Similarly, international agencies such as the World Health Organisation, International Monetary Fund and International Telecommunications Union have loaded bibliographic and full-text databases for Internet access.

In Europe, some national administrations have taken similar initiatives, although in many countries there is far less `free' information equivalent to the data sets in the US public domain. Countries like France and the UK, however, have taken the step of allowing citizens to access government departments and ministers' offices by electronic mail. Internet users can now telnet into the European Commission Host Organisation (ECHO) for free access to Commission databases and directories. Fee-based access to Tenders Electronic Daily, a database of invitations to tender from over 80 countries, is also available. In addition, a WWW server has recently been set up for direct access to I'M Europe, the Commission's database on EC programmes in the information market and directory of electronic information services.

The Internet can offer governments a comparatively cheap and effective way of disseminating information to citizens, thereby fulfilling statutory duty and encouraging participation in the democracy. The effectiveness of such strategies will be largely dependent upon the penetration of technology and network access facilities into all levels of society. In recognition of this, the US Government announced US$ 26m (ECU 21m) of federal matching grants in March 1994 for the development of public sector access to the information superhighway. The grants will target schools, hospitals and libraries, with the aim of ironing out inequalities in information access. The European Commission is also to investigate these issues as part of its Fourth Framework Programme.

Initiatives are also taking place at a local level for the provision of public information. In Palo Alto, for example, public services have been developed for access to Internet databases of local facilities, council telephone directories and minutes of meetings, train timetables, library services and historical information.

Similarly, art galleries and museums throughout Europe and the US have developed Internet services which provide a wider audience with access to collections and information, sometimes generating income through paid-for services. A recent example is the Irish art gallery, Kennys, which is developing an Internet exhibition project for the promotion of Irish art in the EU and eventually worldwide. The exhibition is to be hosted on the Dublin bulletin board system, TOPSSI, which was initially developed for the provision of social services information.

4.2.4 Consumer Information Services

Consumer information providers selling their products on the networks face strong competition for users' attention. This comes not so much from other commercial information providers as from the countless informal and free services available in the form of discussion groups, Usenet news services, general interest clubs, (such as that recently introduced in the UK by the BBC) and public domain databases. Nevertheless, experiences in the US suggest that it is possible to run consumer-oriented Internet services, especially those with broad appeal such as electronic newspapers and magazines.

Many US newspapers, both national and regional, are already available electronically via business and consumer online hosts. Yet the Internet is preferable to many of the smaller newspapers because it avoids the loss of up to 80 per cent of their revenues to the online host. Eight US newspaper services are currently offered or in development on the Internet, some of which are free electronic versions of local free press. A free Internet version of the Palo Alto Weekly was launched in February 1994, for instance, and attracted 4,500 accesses in its first two weeks of operation. Free versions of the Norfolk Virginian Pilot and the Raleigh News & Observer also exist. The latter includes games and reference materials as well as the electronic version of the newspaper.

Many projects like these are being carried out on a non-profit making basis; others receive their income from advertisers and sponsors rather than users. But they do indicate a high level of interest amongst consumers in electronic versions of their regular reading matter. At a time when other forms of advertising revenue are squeezed, electronic advertising as part of a free Internet newspaper may bring substantial benefits.

In Europe, there has been little consumer information development on the networks, although European users have shown a strong interest in the newsmalls and electronic bookstores (such as the Online BookStore) developed in the US, whereby users have access to a range of general interest products which they pay for by credit card and download onto their PCs.

Electronic magazines developed for use by consumers and businesses are also likely to be a growth area, especially in computer magazine publishing. The US computer publisher Ziff Davis, for instance, has developed the Interchange Online Network, which allows users to sample software and access multimedia promotional material as well as viewing magazine editorial. Many other computer magazine publishers now have electronic versions of their products, or bulletin boards and discussion lists which support their main product range. The concentration of special interest computer users on the Internet makes this type of network publishing very attractive.

4.2.5 Schools Publishing

In the US, where the NREN programme extends to schools as well as higher education institutions, text-book publishers are moving in with Internet access to teaching and learning resources. Such activities are often co-ordinated by the State education department. The California Technology Project, for instance, has provided 6000 teachers with access to the Internet and curriculum materials in the K-12 (Kindergarten to 12) sector.

In most European countries, connection to and exploitation of the networks by schools is much less common. Iceland, however is a notable exception. Here, 90 per cent of schools are connected to the Icelandic Educational Network (ISMENNT), which originated in a small village in north east Iceland thanks to the efforts of a headmaster supported by computer scientists. The network now offers training courses in network use, access to administrative information, and opportunities for collaboration and communication with schools in other countries through a connection to the KIDLINK project. Regional educational offices have developed teaching materials for delivery on ISMENNT.

By contrast, few UK schools are actively using the networks, although some will have access to the Internet via the Campus 2000 project. KIDLINK is used by some schools, and the National Council for Educational Technology (NCET) has set up an experimental Mosaic front-end for access to some of its own publications.

If and when other European countries develop initiatives similar to those in Iceland, and projects like NCET's gather pace, there is likely to be a natural progression towards network delivery of teaching and learning materials. However, experiences in selling CD-ROM products to schools suggest that this will be a slow-developing market. Unlike the US, European schools publishers do not have a large-scale home market, and language and curriculum differences make it difficult to sell into other geographic markets. The extent to which they are able to offer network services will therefore depend largely on the support and co-ordination activities of national governments and educational technology agencies.

Table 2: Opportunities and Problems of Network Publishing - Summary


The Opportunities    - Ability to reach a large, international  user                          community                       - Potential for targeted services and closer                           relationships with customers, e.g.  detailed                          usage feedback and customersupport                         - Customers do not require dedicated  hardware,                                  network connections or  passwords                          - Cost effective and potentially profitable                          for some mass market products, e.g.                              electronic magazines                         - Opportunities for implementation of                              new marketing techniques, e.g. sampling                         - Commercial network spaces, billing systems                           and navigational software will make                             commercial publishing on the networks  increasingly                          attractive                          - Opportunities for multimedia services in  the                               longer term                         - Indirect benefits such as visibility and                                    credibility                                                       The Problems         - Lack of reliable copyright, security and  payment                          mechanisms at present                          - Risk of migration of relatively profitable                                  print business to a less lucrative medium                           - Can require high investment in hardware  and                          software development, communications and  human                          resources                          - Variable network  capacity and                          user technology can restrict service  design and                            presentation                          - Return on investment unlikely for most                                    information services in the short term                          - Strong competition for users' attention,                          especially from free information                                  services                          - Strong competition and some conflict in  the                                  academic sector with academic  institutions,                          libraries and commercial intermediaries                                         

5. CONCLUSIONS

This paper has highlighted several areas of opportunity for the information industry, but it is clear that selling information on the networks will not be an easy option. All network publishers face problems of copyright protection and payment processing. They also face competition in the form of free information services and services developed by intermediaries. Pricing mechanisms need to be developed which are acceptable to a highly demanding user community, but which will nevertheless allow enough income to be generated for services to become economically viable.

The investment required for network service development will vary considerably between different applications. In some cases, network publishing may be more cost effective than other forms of electronic and print publishing. This is likely to be the case for electronic newspaper and magazine publishing with a broad market appeal. For other applications, such as business and academic databases, considerable investment will be required in software development and database re-development.

Nevertheless, network publishing remains attractive simply because it represents access to such a huge user community, and yet offers opportunities for services aimed at closely-targeted markets. As networks are upgraded to higher capacities, these opportunities will extend to multimedia publishing. The development of commercial `spaces' on the Internet is encouraging for publishers. And the emergence of a specialist service industry, likely to emerge quite rapidly in coming years, should make it easier for publishers to exploit the opportunities available to them. Although there is clearly a need for more work on payment and copyright/royalty systems, initiatives underway in the public and private sectors are likely to provide some solutions.

In the meantime, publishers and information providers have the opportunity to experiment with bulletin boards, customer newsletters, product information and support services, thereby forging closer relationships with new and existing user groups, and gaining valuable market and technology experience.

GLOSSARY OF TERMS

Arpanet: US Defense Department's Advanced Research Projects Agency Network, initiated in 1969.

ATM: Asynchronous Transfer Mode, a high speed network technology.

Bulletin Board: electronic public notice board which can be used for posting messages and information to interest groups.

CAS-IAS: Current Awareness Service-Individual Article Supply, services offering information about current or future journal articles and document supply services, sometimes customised.

EuropaNET: European backbone network formed from a merger of EARN (European Academic Research Network) and RARE (Réseaux Associés pour la Recherche Europénne).

FTP: File Transfer Protocol, which allows users to move files between hosts on the Internet.

Gopher: distributed information system which presents information to the user in the form of hierarchical menus. Co-operation between the many gophers on the Internet allows users to search information on different host computers using the same interface. Many public domain versions of gopher can be downloaded from the Internet.

JANET: Joint Academic Network (UK). SuperJANET is the broadband equivalent.

K-12: Kindergarten to Twelfth Grade. The term originated in the US and is used in the context of schools issues.

KIDLINK: schools networking project for children aged 10 to 15, with users in nearly 60 countries.

Listserv: mailing list for the purpose of discussion via electronic mail, using the Listserv protocol. Listservs are arranged by subject interests and messages posted to a list are automatically sent on to all subscribers. Listservs (or list servers) often have a moderator who controls information flow and content.

Mosaic: World Wide Web browser software available for Windows, Mac and UNIX Workstations.

NREN: National Research Education Network, a high-speed network proposed by Senator Al Gore for connecting US government, research and academic centres.

NSFnet: the National Science Foundation Network, which took over the non-military side of the US Defense Department's network in the 1980s and now forms the high-speed backbone network in the US.

RENATER: Réseau National de Télécommunications pour la Technologie, l'Enseignement et la Recherche, the French academic network.

TCP/IP: Transmission Control Protocol/Internet Protocol, two key transmission protocols, finalised in 1982, which form the basis for communications and information transfer standards on the Internet.

Usenet News: a bulletin board system originally created by the Unix community. It provides a discussion forum covering a wide range of topic and sub-topic interests, accessible from almost any country in the world.

WAIS: Wide Area Information Server, a distributed information system which allows simple natural language input, indexed searching and relevance feedback. Public domain versions are available for Internet users.

WWW: World Wide Web, a hypertext, distributed information system developed at the Center for European Nuclear Research (CERN) in Switzerland. WWW servers are interconnected so that users can travel easily around the `Web' from any starting point.

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