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This paper examines business model aspects of digitizing cultural content. It is based in large part on a study conducted by the author and his colleagues for the Department of Canadian Heritage. Based on data collected from several cultural institutions regarding their efforts to digitize content, the study found that implications for the cost side have been significant, leading to explorations of facilities and content sharing programs, formalized budgeting, the need for better copyright expertise and improved mid to long term planning. On the revenue (funding) side, a clear need for more rigorous assessments of user demand emerged. In addition, the possibility of revisiting organizational mandates was identified, as well as various revenuegenerating opportunities including sponsorship, user-fees and private/public sector partnerships.

I. Introduction The collection and long-term preservation of digital content pose challenges to the intellectual property regime within which libraries and archives are accustomed to working. How to achieve an appropriate balance between copyright owners and users is a topic of ongoing debate in legal and policy circles. This paper describes copyright rights and exceptions and highlights issues potentially involved in the creation of a nonprofit digital archive. The paper is necessarily very general, since many decisions concerning the proposed archive's scope and operation have not yet been made. The purpose of an archive (e.g., to ensure preservation or to provide an easy and convenient means of access), its subject matter, and the manner in which it will acquire copies, as well as who will have access to the archive, from where, and under what conditions, are all factors critical to determining the copyright implications for works to be included in it. The goal of this paper is to provide basic information about the copyright law for those developing such an archive and thereby enable them to recognize areas in which it could impinge on copyright rights and to plan accordingly. After initial decisions have been made, a more detailed analysis will be possible. As the paper indicates, there are a number of areas that would benefit from further research. Such research may not yield definitive legal answers, but could narrow the issues and suggest strategies for proceeding.