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NLS: That All May Read

Current Strategic Business Plan for the Implementation of Digital Systems
September 2006

Description of Cover Photo - Player and Cartridge

Executive Summary

Section 1: Introduction

Section 2: Completed and Ongoing Digital System Implementation Activities

Section 3: Current and Future Costs and Transition Plans


Executive Summary

This document presents an updated strategic business plan for the implementation of a digitally-based recorded talking book system for the free national library program operated by the National Library Service for the Blind and Physically Handicapped (NLS), a component of the Library of Congress (LC); the nationwide network of cooperating regional and local libraries; and the U.S. Postal Service. While analog audio cassette book (RC) and cassette book machine (CBM) technology, the backbone of the current system, has facilitated a reliable and cost-efficient delivery system for books since the 1970s and for magazines since the 1990s, it is now outdated and nearing the end of its useful life. Because many NLS patrons are ware of technological advances, they have heightened expectations of service improvements. Further, the impending obsolescence of key elements of RC and CBM technology also warrants the conversion of the system to an appropriate alternative technology.

For these reasons, NLS has begun to implement digital audio technology as the backbone of the future system. Patrons, the libraries that provide direct service to patrons, and NLS, will realize improvements associated with digital technology. The program will continue to provide RCs and CBMs to patrons during the transition, but digital talking book (DTB) and digital talking book machine (DTBM) technology will ultimately replace RC technology just as RC technology replaced its predecessor, the rigid disc (RD) technology. The transition to this digital technology is expected to begin for patrons in fiscal year (FY) 2008 and should require approximately four years to complete. The implementation plan is presented in this document. NLS has determined that the digital system will be based on flash memory technology, specifically Universal Serial Bus (USB) flash drive technology, and envisions the following advantages (not in hierarchical order) relative to the current system:

While the new system will obviously improve the services provided to patrons, it will also be cost-efficient for both network libraries and NLS. While the costs of book production and distribution may be slightly higher than they are for the current system, the costs to produce and repair playback machines will be lower and will more than compensate for the higher production and distribution costs. NLS should incur annual book and machine costs that are significantly lower than those of the current system. Network libraries, as well, should enjoy substantial savings because of such factors as reduced storage space requirements and improved cost efficiencies in book and machine maintenance.

NLS has already submitted a request to the LC for supplemental funding for the large capital investments needed to implement the new system in a reasonable amount of time. After DTBMs have largely replaced CBMs and inventories of reusable flash drive cartridges have been accumulated for both mass duplication and possible future duplication-on-demand operations, NLS's normal annual funding ($53,904,510 for FY 2007) will suffice for continuing operations of the new system.

Two funding scenarios have been considered and evaluated, and the associated transition plans have been developed. They are as follows:

NLS is concerned about the prolonged transition described in Plan 2. The reasons are as follows:


The overall implementation is currently on schedule, and there have been many tangible accomplishments since the Current Strategic Business Plan for the Implementation of Digital Systems was published in December 2003. These accomplishments are as follows:

Current and Future Activity

NLS's fundamental transition strategy is to await further declines in the wholesale unit price of flash memory that will make implementation economically feasible, but also to execute all other necessary planning and implementation steps that can be logically performed before FY 2008. The major steps comprising the current transition plan are as follows:

Section 1: Introduction


The National Library Service for the Blind and Physically Handicapped (NLS), which is part of the Library of Congress (LC), operates a free national library program for people who cannot read or use standard printed materials because of temporary or permanent visual or physical limitations. NLS selects, produces, and distributes books and magazines in braille and recorded formats, and designs and manufactures special playback equipment for use with the audio materials. In fiscal year (FY) 2005, readership totaled 793,891–751,569 audio users and 42,322 braille readers. NLS manufactures 42,000 cassette players annually and has an inventory of 713,893 players, of which 526,984 are assigned to program users.

In FY 2005, NLS produced 3,925 audio and braille book titles, in addition to circulating 45 recorded and 33 braille magazine titles to subscribers in 3,954,726 copies. The total available collection of recorded and embossed books exceeds 360,000 titles.

NLS distributes both the reading materials and the playback machines to a national network of 132 cooperating regional and local libraries, which in turn store and distribute the books and players to eligible borrowers. In FY 2005, a total of 23,472,396 audio and braille materials (books and magazines) were circulated. Reading materials and playback equipment are sent to borrowers and returned to libraries postage-free through the U.S. Postal Service (USPS); costs are covered by a congressional appropriation. The enabling legislation for the operation of the free national library program is contained in Public Law 89–522.

Conversion to a digital system

Cassette book (RC) and cassette book machine (CBM) analog audio technology, the backbone of the current system, has served as a reliable and cost-efficient delivery system for books since the 1970s and for magazines since the 1990s. However, RC and CBM technology is outdated in several respects and is nearing the end of its useful life in the program. Because many NLS patrons are aware of technological advances, they have heightened expectations of improvements in service. Further, the impending obsolescence of key elements of RC and CBM technology also warrants converting the system to an appropriate alternative technology.

NLS has therefore begun to implement the use of digital audio technology as the backbone of the future program. Program patrons, the libraries that provide these patrons with service, and NLS, will realize improvements associated with digital technology. The program will continue to provide RCs and CBMs to patrons during the transition, but digital talking book (DTB) and digital talking book machine (DTBM) technology will ultimately replace RC technology just as RC technology replaced its predecessors—rigid disk (RD) and flexible disk technology.

NLS has identified and documented the fundamental requirements of any future system based on digital technology, regardless of its specific format and delivery characteristics. These requirements were developed by the Digital Long-Term Planning Group (DLTPG), which included NLS and network library staff, Chief Officers of State Library Agencies, and representatives of consumer advocacy groups. Appendix 2, a comprehensive summary of the requirements for any future digital system, has effectively served as a guide for implementing the digital delivery system.

Patrons’ transition to digital technology is expected to begin in FY 2008 and should require about four years to complete. The plan for implementing this system is the subject of this document.

Scope of the Document

This document presents the first revised and updated strategic business plan for implementing digital systems for the free national library program. It does not constitute the final plan because, as of this writing, there are still several unknowns that will dictate certain aspects of the implementation. However, comprehensive planning studies are addressing these unknowns, and the resulting answers will set the course for the implementation.

This document has the following objectives:

However, this document does not describe all the major activities completed and all the important decisions made before December 2003; for these, the reader is referred to the Current Strategic Business Plan for the Implementation of Digital Systems.

Section 2: Completed and Ongoing Digital System Implementation Activities

Patron survey

Making the transition to a digital system involves decisions about hardware design, medium, and distribution systems as well as practical matters such as the cost, durability, and availability of an appropriate technology. However, the equipment and delivery systems must also be suited to the characteristics, desires, and requirements of the users.

The free national library program has always been user-driven. To make prudent design decisions about the digital system, NLS required more information about its patrons’ abilities and preferences. It therefore commissioned a patron survey that was completed in January 2004 to help anticipate and proactively address any problems that users might have with digital books and playback machines, to identify possible barriers to acceptance, and to design the new materials to satisfy users’ needs. The results from this study (see appendix 3) have been incorporated into subsequent planning studies for developing the digital-based system.

The contractor selected to conduct the survey used a disproportionate stratified random sampling approach to identify subscribers who belonged to five groups (ages 18 to 39, 40 to 64, 65 to 84, and 85 and older, and people whose years of birth were missing in the Comprehensive Mailing List System. The analysis was based on telephone interviews with a sample of 447 subscribers.

The major survey findings on patron background characteristics and technology are as follows:

General findings on patrons’ experiences with talking books and talking-book playback machines in the current system are as follows:

Finally, several important implications for designing the DTB and DTBM and preparing subscribers for them can be drawn from the survey findings:

There are likely to be some pockets of resistance to the DTBM. Half of the subscribers interviewed either have no particular concerns about the current machine or say that they would change nothing about it. Another indicator of resistance is generational differences in subscribers’ exposure to and use of new technology. For the oldest subscribers, the digital device might be somewhat intimidating because it is based on an unknown technology.

Given these findings, NLS believes that good communication about what the DTBM is and how to use it will be critical to fostering acceptance, especially among subscribers who were born before or during World War II. A multipronged effort that appeals to three different classes of patrons—technologically savvy subscribers who are already interested in features like bookmarks and navigational aids, subscribers who like their machine just the way it is but would be amenable to using the new one, and subscribers who are likely to actively resist DTBs and DTBMs, including those who are inclined to be suspicious or fearful of technology—is likely to be required.

Production of DTB titles

Very shortly after the DTB standard (American National Standards Institutes/National Information Standards Organization Z39.86–2002) was established in 2002, NLS began developing a DTB title master collection. Because the development of a digital title master collection did not depend on the audio medium or the delivery method, NLS was able to begin the work even though neither had been selected.

NLS has established as a goal having 20,000 DTB titles ready for distribution in FY 2008. These titles are being developed from two sources: titles produced directly in digital format and other titles that were produced originally in analog format and are being converted.

Since the beginning of FY 2004, all new titles have been produced in digital format and will continue to be produced that way. Approximately 10,000 new titles have been, are being, or will be produced in digital format between FY 2004 and FY 2008. Also, during FY 2002 and FY 2003, approximately 10 percent and 50 percent of titles, respectively, were produced in digital format.

Some 10,000 existing titles in analog format, all of which were produced before FY 2004, will undergo analog-to-digital conversion. These titles constitute a diverse cross-section of the entire analog collection and are not simply the most popular titles. During FY 2004 and FY 2005, respectively, 2,961 and 1,592 titles were converted from analog to digital format. Between FY 2006 and FY 2008, some 1,550 to 1,600 titles per year will be converted. Although this process is proceeding well on the technical end, it is turning out to be more expensive than anticipated; for this reason, annual title conversions are below the originally targeted 3,300 titles per year.

From 2008 to 2011, NLS envisions continuing to produce approximately 2,000 new titles annually (see appendix 5). As the transition from analog to digital progresses during these four years, the number of copies produced in each medium will vary, with copies of cassette titles declining as the number of copies of DTBs increases. While NLS also intends to convert additional existing analog titles to digital format (beyond the 10,000 now targeted for conversion), the extent of such conversions is not known. It is possible that additional existing analog titles will be converted on an as-needed, title-by-title basis as demand dictates. It is also possible that ranges of existing titles may be converted.

Selection of flash memory as a medium

In February 2005, NLS completed research on three alternative digital media carriers for the first DTB delivery system: flash memory, CD–ROM, and the miniature hard drive. The most important characteristics of the new medium are that it must be as easy to use, as durable, and as simple to duplicate as the cassette. Ideally, it should also hold more audio than a cassette and be reusable, and the cost should be reasonable. NLS therefore evaluated these characteristics for the three candidate media.

While CD–ROM is an excellent carrier of all kinds of digital information, including DTBs, and is inexpensive and easily duplicated, braille labeling of CDs is extremely difficult and the machines required to play them include fragile electromechanical parts. The loading process either exposes some of the most fragile parts or uses a slot-loading mechanism that would be far too prone to break down. Moreover, the machines are not easily repaired and because of their moving parts, have greater battery requirements than solid-state systems based on flash memory. Perhaps the biggest problem with CD–ROM is that it does not lend itself to repeated circulation because discs are very easily rendered unusable by handling, especially by people with limited dexterity. While one-way library systems based on CD–ROM have proven cost-effective elsewhere in the world, NLS could not use such a system because every book order would require duplication on demand. The technology required for duplication on demand is sufficiently complex and expensive that it could not be handled at most network libraries, and NLS could not afford to provide circulation of all network books directly.

The price of small hard drives has dropped considerably over the past few years, and, when fully loaded, these devices could hold up to 300 DTBs. However, a system based on these devices would have many of the same difficulties as a CD-based system, including shorter battery life and difficult-to-repair machines. While receiving 300 books at a time might seem a blessing, most patrons would ultimately find this overwhelming or inflexible, since the drives could be reloaded only infrequently (perhaps only every two years), thus limiting access to bestsellers and new releases. Furthermore, navigating a selection of 300 titles would be daunting for many readers.

The Universal Serial Bus (USB) flash drive, although not as inexpensive as CD–ROM or as capacious as a hard drive, strikes the perfect balance between durability, capacity, and cost. These credit-card-sized devices can hold an entire DTB and contain flash memory, a type of computer memory that can be read from, written to, or erased and that does not lose data when power is removed.

Flash memory has many advantages over other digital media such as CDs or hard drives while retaining most of the benefits of those formats:

Flash memory is an adaptable technology that is available in many different formats. However, only one is ideal for use by NLS: the USB flash drive, a piece of rewritable, nonvolatile memory that can be inserted into and removed from an electronic device. Files can be transferred to or from it. The data on a USB flash drive remain intact even when power is cut off from the device. It attaches, physically and electrically, via a USB 2.0 connector, which the NLS DTBM will also have.

USB flash drives can be purchased off the shelf, and to reduce costs, the units used by NLS will be largely the same as commercial products except for two key differences. First, they will have a customized cartridge, or case, to facilitate easy handling by patrons, hold a large-print/ braille label, fit snugly into the NLS DTBM, and have maximum durability. Second, they will also have a modified controller chip to prevent alteration of data stored on the device except by authorized parties (write-protection). The USB flash drive is the only flash memory standard that does not specify a physical format for the card, but is instead standardized only by the characteristics of its connector. Therefore, the USB flash drive can be built to any size and shape as long as it has the right connector, and the cartridge can be customized inexpensively because the internals and connector are standard and widely produced. NLS will produce these cartridges in sufficient quantities to ensure that customization adds little to the overall cost.

The USB flash drive will also provide a high degree of technological independence to NLS because the cartridge will connect to the DTBM using a standard interface and protocol and the memory technology in the cartridge can change without any changes to the DTBM or the cartridge writers. If new, more cost-effective memory technologies are developed, NLS will be able to use those inside its cartridges with no modifications to other aspects of the program. Other flash memory formats would couple the DTBM too tightly to the type of memory used.

It is very important that book media retain data for many years, and most flash memory products are conservatively specified to retain data for ten years within a wide temperature and humidity range; actual retention is probably far longer. It is also important that duplication not be overly time-consuming, and while the time required to duplicate a book onto a USB flash drive depends on a number of factors, the most limiting will be the write speed at which data can be transferred onto a cartridge. The write speed of current USB flash drives is already sufficient for NLS’s needs and is increasing. Today’s mainstream devices can be written to at speeds of more than 4 MB per second, so an average DTB can be transferred in about 30 seconds. Write speeds are increasing quickly, so by 2008 it is likely that the write speed of a mainstream device will double.

The average wholesale unit price for a 256-MB USB flash drive (the most likely capacity) in 2008 is expected to be about $6.72, which is well below the $10 critical threshold necessary for a flash memory–based book distribution system to be economically viable. While this price is actually considerably higher than a comparable set of blank cassettes, much of this additional cost will be offset by reuse.

Additional price projections show that while capacities continue to increase, the price of the smallest available part will remain around $5. If such trends continue, the 128-MB cartridge will hit this price level within a few years of the rollout of DTBs, and this should be followed by the 256-MB and 512-MB capacities in subsequent years. At some point, some of these cartridges may be discontinued because of their small size. But the USB flash drive standard means that this will have no effect on NLS because the next-smallest size can be used. As long as the price for at least 128-MB and probably 256-MB cartridges remains reasonable, the program can continue indefinitely. There will also be a one-time cost associated with designing the customized NLS flash memory cartridge, but once the shell and controller are designed, they will probably remain useful for the life of the program.

Low cost will also make it practical for network libraries and patrons to purchase their own cartridges. NLS is committed to having libraries continue to be able to produce local content for use with NLS playback machines, so it is vital that blank cartridges be reasonably priced. Library-owned cartridges will also be electronically protected so that only the purchaser can reuse them.

Since all technologies have a limited life span, NLS has considered the future of flash memory. Other nonvolatile memory technologies that may, at some point, eclipse flash for density, speed, or cost are under development. But the USB flash drive insulates NLS from this change because cartridges with a new memory technology could easily be substituted without any impact on patrons or the DTBM. The future of the USB 2.0 connection is more of a concern because, while the USB has been enormously successful in the computer industry, it has already undergone several revisions. So far, these revisions have always kept compatibility in mind, thus ensuring that older devices continue to work with newer revisions. This is likely to continue for many years, but even if it does not, there is no reason to believe that NLS cannot continue to use the current USB standard.

The USB flash drive is reasonably priced, very durable, easy to handle, customizable, and widely available. It can be quickly and repeatedly read and written to, and is a robust and adaptable medium that lends itself perfectly to large-scale circulation, efficient storage for libraries, and duplication on demand. The USB flash drive meets all of NLS’s requirements for functionality, durability, flexibility, and cost and for these reasons was selected from among competing alternatives as the medium for the first DTB delivery system.

Digital rights management

A legal requirement and therefore a fundamental part of the free national library program is the copyright protection of reading materials. Authors and publishers grant NLS the right to reproduce their materials only if they are provided to program patrons in a special format that cannot be used by ineligible persons. In the current system, this special format consists of the RC and CBM, which use four rather than the industry-standard two recording tape tracks and play the tape at 15/16 inches per second (ips) rather than the industry-standard 1-7/8 ips. While both of these special attributes of the RC/CBM system also effectively facilitate the compression of audio content onto the medium used and thereby increase the efficiency of the delivery system, they simultaneously provide copyright protection.

However, for digital books and magazines, compression of the audio content alone will not be sufficient to provide copyright protection. Although NLS is planning to compress DTB data to facilitate more efficient storage, transmission, and delivery (see "Selection of an Audio Compression Scheme for DTBs"), the compression algorithm will be off the shelf and not unique to NLS-produced digital audio materials. In other words, anyone who has the same compression/decompression application could read compressed NLS digital audio files. For this reason, compression alone will not provide copyright protection.

Therefore, beginning in October 2004 and culminating in April 2006 with a specification, NLS has been developing a Digital Rights Management (DRM) (copyright protection) plan for DTBs in conjunction with the Daisy Consortium. The most important component of DRM, by far, is encryption of the audio data. Encryption involves the use (establishment and management) of keys used first to encrypt and then later to decrypt data. The specification uses an encryption scheme based on the National Institute of Standards and Technology (NIST) Advanced Encryption Standard (Federal Information Processing Standards Publication 197, November 26, 2001).

However, any such encryption/decryption of DTB data required for effective DRM must also be transparent to program patrons. NLS is primarily concerned with making encryption/decryption transparent for patrons playing NLS books on NLS machines. However, some patrons also play NLS books on third-party machines, while others also play non-NLS books on NLS machines.

NLS plans to address the primary DRM concern (using NLS books with NLS machines) by building an NLS collection key into DTBMs. This key will be used in conjunction with a key on NLS DTBs to facilitate their use with the machine and will be completely transparent to users.

A similar approach, but using different keys, will enable non-NLS books to be played on NLS DTBMs. Finally, NLS will work with qualified manufacturers of third-party machines to incorporate the NLS collection key into their devices, so that NLS DTBs can be played.

Selection of an audio compression scheme for DTBs

To make distribution on flash memory economically viable, it is essential to reduce the quantity of audio data in a DTB from that required for a WAV format (the format in which the audio content is produced originally) to an alternative one. The average NLS talking book title is approximately 11 hours long and requires about 3.5 gigabytes of data in WAV format. Thus, if represented in WAV format, the average title would require approximately fourteen 256-MB cartridges, thus rendering flash memory economically impossible for NLS.

It is therefore highly desirable to compress the original data rate of 706 kilobits per second (kbps) to 24 kbps. At this level of compression, 95 percent of NLS titles can be written onto single 256-MB flash drive cartridges. To achieve such aggressive compression ratios (about 29:1), compression methods must be employed that severely reduce the amount of data in the original. The reproduced audio will then be different from the original, but by exploiting the known characteristics of human hearing, this difference can be designed to be almost imperceptible.

In September 2005, NLS completed the evaluation and selection of the appropriate audio codec (code-decode) or compression/decompression scheme for the DTB. The decision on which compression algorithm to use was driven by the following eight factors, all of which were analyzed for each candidate:

The NLS Engineering and Quality Assurance Sections first researched available codecs with respect to these factors and narrowed the field for further evaluation to the following: (1) MPEG 1 layer III (MP3), (2) MPEG 4 High-Efficiency Advanced Audio Codec (HE–AAC), and (3) Adaptive Multi-Rate Wideband Plus (AMR–WB+). Because it is not possible to reliably determine the audio quality of encoding algorithms by objective measurement, listening tests were performed.

The test procedures required expert listeners, so participants included staff from the NLS Recording Studio and Engineering and Quality Assurance Sections and several DLTPG members; in all, twenty-nine people took part. Each of the codecs was compared against the original (uncompressed) audio sample at several bit rates for four different audio clips using both male and female narrators. The grading scale ranged from 1 (the impairments due to compression were very annoying) to 5 (the impairments were imperceptible).

On the basis of both the listening tests and the other evaluation criteria, NLS selected the AMR–WB+ codec, which provides the highest-quality audio at the lowest bit rates of all the codecs tested. Other codecs would require higher bit rates for equivalent audio quality, would consequently require more flash memory cartridges for a given title, and hence would incur higher media costs. AMR–WB+ would also minimize Internet download times relative to the use of other codecs.

DTB preparation

NLS is developing and implementing the steps needed to produce distribution-ready DTBs. At this juncture, it appears that the process will effectively involve five steps.

The first step is the narration of the reading material from the print original and creation of the digital audio files in WAV format. These files are often referred to as the "raw audio" files. This step is currently performed for the production of master files for use in mass duplication of cassette books. The current process calls for the narration contractor to provide NLS with the WAV files for a book on CD, for inclusion in the NLS audio archive.

The second step is the addition of announcements and XML (extensible markup language) files to the raw audio file in accordance with the DTB standard. Three types of XML files are added to the book files: (1) OPF files, which package the final meta-data from the NLS Production Inventory Control System (PICS); (2) NCX files, which provide navigation for the audio material; and (3) SMIL files, which support linear playback.

The third step is the compression of the digital audio files into an alternative compressed format using a codec to significantly improve the economy of both duplication of audio materials onto flash memory cartridges and transmission over telecommunication channels for Internet delivery. While the current compression algorithm is for the MP3 format, this will shortly be changed to the AMR–WB+ codec.

The fourth step will be the application of DRM via encryption of the compressed audio files and several of the XML files.

The fifth and final step is the creation of an image format file of the protected DTB master files. An image format of a group of files facilitates much more rapid copying of the data compared with copying the individual files separately. In a copying operation, an image file is effectively treated as a single file rather than as multiple component files, and both read operations from a source drive and write operations to an object drive can therefore be performed much more quickly.

Digital book and magazine downloads

NLS has begun to offer Internet downloads of digital books and magazines to patrons of the free national library program. This effort began with an ongoing pilot project for magazines that was launched in late 2003.

In the pilot program, between fifty and sixty patrons are doing Internet downloads of magazines. Three titles are offered: U.S. News & World Report (weekly), Smart Computing in Plain English (monthly), and People (one issue per month). The magazines are segmented and available for download by article or as complete magazines, and navigation aids are included. The digital magazine files are provided in MP3 format.

To use the magazine download service, patrons must have both Internet access (preferably a high-speed channel) and a playback machine. A patron first uses the Internet to download the article or articles from the NLS server onto a personal computer (PC), which stores them. The downloaded files can then be played on a PC by using a software player or on portable devices compliant with the NLS format.

This pilot will be replaced in late 2006 by a larger initiative that will include more magazines as well as a large selection of books.

Playback Machine Transition Study

Until FY 2008, all audio materials for the free national library program will be produced and distributed only on cassette. Because the transition to a digital system will probably require a minimum of four years, patrons without digital machines will require CBMs during the transition phase. But CBMs will also be required during and after the transition by patrons who wish to access RC titles not converted to digital format, possibly by patrons who subscribe to magazines, by patrons who will not accept the new technology, and by patrons who are playing back recorded materials not produced by NLS (local-interest materials or textbooks).

NLS and its CBM (C1 model) contractor have a special relationship because NLS is effectively the only buyer for the C1 and the contractor is effectively the only supplier. NLS does not have the option of deferring C1 production and procurement for any significant period of time and then resuming production. When NLS stops buying machines, the contractor will dismantle the C1 production line permanently. Furthermore, for operations to be economically feasible, the contractor must produce C1s at a minimum threshold; the primary constraints are minimum quantity buys for assemblies and parts provided by subcontractors and suppliers. The current level of C1 production is 42,000 units annually, which is at this minimum threshold.

Therefore, in September 2004, a comprehensive structured requirements analysis that addressed the phasing-out of CBMs from the free library program and the phasing-in of DTBMs was completed. The analysis considered inventory levels of CBMs and repair parts; demand for and procurement of new CBMs, repair parts, and commercial repair labor; library staff, volunteer, and commercial CBM repairs performed and repair capacities; establishment of program policies that influence demand for CBMs; and all other relevant factors for the time period before the beginning of the planned transition (FY 2004 to FY 2007), during the transition (FY 2008 to FY 2011), and afterward (FY 2012 and beyond). The study focused on NLS-incurred costs. Earlier disk players and combination machines still in use were not addressed in the analyses because their use is so limited.

The phasing-in of DTBMs was also addressed. However, because the DTBM had not yet been designed or mass-produced when the study was performed, important logistical attributes such as the production capacity of manufacturers, wholesale unit price, quantity discount potential, longevity (estimated useful life), reliability (time between failures), and maintainability (time/cost to repair) were unknown. Therefore, the best estimates by NLS technical staff were used for these unknown values.

Also, because of these unknown values and the intrinsic need for them, a flexible planning tool was developed that would incorporate the results from the DTBM design project when they become known. The tool is a computer-based mathematical model that facilitates the formulation and evaluation of alternative long-term implementation plans for the transition of playback machines to the future digital system.

The project involved collecting and analyzing source data and interviewing NLS staff to understand the current logistics system. Multiyear data on the following program factors were collected, compiled, and analyzed: RC book and magazine readership, circulation of RC books and magazines, CBM and CBM repair parts inventories, repair parts production and prices, repair parts prices and parts on order, attrition due to loss or to machines damaged beyond repair (DBR), repairs performed by type of repairer, and repair parts consumption by type of repairer. Results were derived for three classes of machines: C1s, E1s, and all other CBMs (except CT1s and C2s). Certain logistical parameters such as average loss rates, DBR rates, failure rates, and repair parts and labor consumption rates were then determined from analysis of empirical data for each class of machine. An additional analysis was also performed using detailed (title-level) historical RC circulation data from a sample of regional libraries (RLs) to estimate the demand for RC books (and hence the demand for CBM play-time) associated with NLS titles that will not be converted to digital format.

A mathematical model was then developed from the derived logistical parameters and from other data inputs (the unit price for C1s under the current contract, unit labor cost to repair a C1, etc.) to evaluate outcomes for various inputs to the system over a 14-year planning horizon (FY 2004 to FY 2017) via simulation with calculations performed and results presented on both annual and multiyear bases. The basic logic of the planning model is as follows:

Multiple operational scenarios were evaluated using the planning model, with baseline (default) values for the factors over which it was felt that NLS has little or no control, and focusing specifically on the evaluation of alternatives for the most important factors that NLS can control—new machine production and commercial repair levels. A number of findings and recommendations resulted from these evaluations, the more important of which are summarized next:

While it is desirable not to have a production gap between the cessation of CBM production and the commencement of DTBM production, it was determined to be very unlikely that option year 4 production would be required unless delays in DTBM production and/or an increase in the patron base occurred as a result of outreach campaigns or other reasons. The approach recommended was for C1 production during option years 1 through 3 of the current contract, with C1 commercial repairs being increased as soon as possible to reach 12,000 per year in FY 2007. The superior economy of repairing versus replacing CBMs, given both the relatively high price of new C1s and the large subsidy provided by volunteer repair of CBMs, was the driving force behind this recommendation.

Most major aspects of playback machine operations will remain fundamentally unchanged with the implementation of DTBMs. Distribution of new DTBM production will be made directly from manufacturer(s) to network libraries via the USPS. Allocations to network libraries will be made based on recorded book readership. Libraries will loan machines to patrons, who will use them to play reading materials and return them to the library when they become defective or are no longer needed. NLS will determine the machine parts necessary for ongoing repairs and procure, store, and distribute them to locations where repairs are being performed. The attrition associated with lost DTBMs as a proportion of assigned machine inventory will probably be about the same as it is now.

Three aspects of future playback machine operations, however, will probably be significantly different. The DBR rate for DTBMs will be lower than it is for CBMs because of the higher reliability of the fundamental design of the machine (no electromechanical components). Failure frequency, and hence repair rates, will be lower than for CBMs due to the more reliable design. Costs for repair parts will therefore be lower than for CBMs because of the lower failure frequency and because the DTBM will not contain electromechanical parts.

The disposition of CBM inventories will be driven by the evolutionary course that RC collections and circulation follow. Given the size of the projected CBM inventories in the residual phase of the transition, any patrons who want to keep CBMs after the transition is complete may be able to do so. Procedures for disposing of excess CBM inventory in the residual phase will be worked out at that time.

Player, cartridge, and container design

The most important ongoing NLS initiative for implementing the future flash memory–based digital system is the design of the DTB cartridge, mailing container, and playback machine. A single contract was awarded to design, develop, and transition-to-manufacture these products, with work commencing in March 2005. A prime contractor, assisted by several subcontractors with complementary expertise, will ensure complete compatibility of the cartridge and container. The current goal is to have final design specifications for these products by late spring of 2007.

A hallmark of this design contract is its emphasis on user testing. A series of eight usability tests are required throughout the course of the contract, involving patrons selected to vary by age, gender, and disability. Four usability tests have been completed to date.

In April 2005, seventy-nine users participated in focus groups in Baltimore; Los Angeles; Clearwater, Florida; and Madison, Wisconsin. The contractor tested initial concepts for products (considering size, shape, general features, etc.) and validated that NLS’s initial requirements for the playback machine, cartridge, and mailing container were, in general, correct and reflected the needs of users, library staff, and repair personnel. Results supported the need for two machines—a basic player aimed at the majority of NLS users and an advanced player designed for patrons who wish to have more complex navigation capabilities.

In July and August 2005, the contractor tested preliminary prototypes with sixty-five users in Baltimore, Cleveland, and Madison. The prototypes were realistic models that allowed the contractor to determine how easily users could learn new features and how effectively they could execute specific tasks. The key elements tested were the layout and operation of controls (both basic and advanced models), the design of the cartridge, its insertion into the machine, the use of the handle, and the stowing of the power cord.

The next round of testing was conducted in October and November 2005, with seventy-one users in Cleveland; Watertown, Massachusetts; and Madison. The tests confirmed that the overall design of the basic machine was appropriate to the intended population and gathered detailed information on two alternative user interfaces for the advanced machine. Users indicated their strong preference for the smaller of two design options, provided feedback on early concepts for cartridge labeling, and evaluated several mailing container models.

In March 2006, the contractor tested revised machine and cartridge models with forty-nine participants in Richmond, Virginia; Rocky Hill, Connecticut; and in Washington, D.C., at NLS headquarters. The results confirmed that the reduced size of the machine was pleasing to all types of users and that the physical design and layout of controls for both basic and advanced players were correct. Users indicated that further work was needed on some aspects of the fast-forward and rewind features of the basic machine, but confirmed that all other major operating features of both machines were functioning appropriately. Users approved the physical design of the cartridge and the proposed large-print and braille labeling approach, but indicated that further work was needed on the design of the mailing container.

Machines and cartridges were tested under all usability circumstances, including private homes, community settings, and retirement centers—to guarantee that the oldest patrons were represented—as well as at network libraries. In addition to executing the tests, the contractor interviewed library staff and repair personnel at network libraries.

The first tests were done with realistic models wired to external devices that performed the DTBM functions. The contractor has also been executing the industrial design efforts and the electrical, audio, mechanical, and software engineering tasks required to develop a comprehensive design for each product. These tasks led to the first fully functional prototypes tested in September 2006.

Describing in detail all of the features of the new machine, cartridge, and container is beyond the scope of this document. However, the following list includes the features that will be most evident and most beneficial to users (both patrons and library staff).

Digital Playback Machine

Digital Cartridge

DTB distribution system

A comprehensive study was conducted to design and develop the best distribution system for flash memory–based DTBs. This effort, which was initiated in March 2005 and completed in August 2006, had two phases. The first, completed in September 2005, was a feasibility study in which fundamental options for the DTB distribution system were evaluated and the best implementation option was selected. In the second phase, the contractor is developed a detailed design for the selected future distribution system, including estimated resource requirements and associated costs, system specifications, and a detailed transition plan for implementation.

The major accomplishments of the first phase of the project were the development of a mathematical model of the future distribution system for DTBs, the estimation of the costs for three distribution options using the model, the evaluation of the options in terms of economic and noneconomic factors, and the selection of the best implementation option. The distribution options that were evaluated are as follows:

Under each of these three options, all patron contact would be with network libraries and none with the DOD centers, other than the receipt and return of the books themselves. Under the hybrid and all-DOD options, libraries would automatically place orders with DOD centers via their information systems and telecommunications and would receive order confirmation and status from the centers the same way.

The analyses considered only recorded books, not recorded magazines. Although the focus of the analyses was a feasibility study rather than an implementation study, the processes required for duplicating flash drive DTBs were conceptualized, and the functional requirements, resource requirements, and associated costs were estimated. The analyses were based on steady-state distribution operations after all patrons in the program who wish them have DTBMs, and it was assumed that DTBM implementation would be identical under all options.

Both NLS and network library distribution costs, but not USPS costs, were considered. The impact of the distribution options on network library costs was based on the NLS life-cycle cost model updated with FY 2004 data. It was assumed that the quantity and mix of DTB titles produced by NLS and the demand for them in the future would be identical or very similar to those in the current system and that title composition and demand would be identical under all distribution options.

Data were collected from NLS, network libraries, and several external sources and then compiled and analyzed to develop a statistical profile of the current system and to model and estimate costs for the future DTB distribution system. Relevant aspects of current RC operations were evaluated, and relevant aspects of future DTB operations were conceptualized to develop values for key variables and other important factors. Major areas of focus and analysis as well as associated findings are summarized next:

A cost model was then developed and used to evaluate the distribution options. The logic for the cost model was devised, values developed or assumed for key variables were used, and sensitivity analyses were performed for different workload allocations in the hybrid model. The estimated costs for the distribution options were then compared and contrasted.

Finally, an evaluation matrix that used weighting factors for noneconomic as well as economic factors was developed. The distribution options were then scored and evaluated by applying the weights in this matrix. The results of the analyses were presented to and discussed with the DLTPG in August 2005. At the end of this process, the best distribution option, in terms of both economic and noneconomic factors, was recommended for implementation.

When noneconomic factors were considered in tandem with costs, the hybrid option was determined to be superior to the all mass-duplication option if between 25 and 40 percent of new titles were mass-duplicated, and it was only very slightly less than the all mass-duplication option if 45 to 50 percent of new titles were mass-duplicated. However, while flash memory and the mass production of flash drives is a mature technology, the mass production of DTBs via either mass duplication or DOD is only in the formative stage. Furthermore, DOD (on a mass scale) will be a more complex process requiring greater capital investment and set-up time for operations than mass duplication of DTBs will. Also, libraries will have to make certain minimum enhancements to their information systems to function properly in the future system, especially with regard to working with the DOD centers. For all these reasons, it was recommended that DTB distribution begin with the mass-duplication option only during and after the transition period. DOD will be reevaluated as the system evolves, and a hybrid distribution option of some type may be implemented after 2012.

NLS intends to follow this course of action. Because smaller numbers of mass-duplicated DTBs will be required during the first three years of the transition period, during which RC duplication will also continue (fewer DTB titles and fewer copies per title produced), it will be economically feasible to implement a limited, and possibly temporary, all mass-duplication option. During this period, DTB flash drive duplication technology will be further developed, and library ADP systems can be enhanced and operating procedures initiated or adopted.

Prequalification for the manufacture of DTBMs and DTB cartridges and containers

In the autumn of 2005, NLS began a presolicitation process for the manufacture of the DTBM and DTB cartridge. As a first step, NLS solicited responses from interested firms and reviewed their responses.

During the design phase, feedback is being solicited from potential suppliers on the feasibility of manufacturing these products from both technical and economic perspectives so that, if necessary, appropriate changes can be made before designs are finalized. While the DTBM and DTB cartridge are being designed first to maximize utility to patrons and second to maximize operational efficiency for NLS and the network libraries, it must also be possible to mass-produce these products given existing manufacturing technologies and NLS budgetary constraints.

Section 3: Current and Future Costs and Transition Plans

This section describes and estimates the major costs of the future digital system for both NLS and network libraries, but not USPS. These estimates consider book production and distribution, and machine production and repair, but not magazines; the magazine program will likely continue much as is throughout the transition and possibly for several years afterward. The estimates assume a steady-state operation, or mature delivery system, in which the transition to a digital-based system is complete, DTBs and DTBMs constitute the primary technology, and all patrons who want a DTBM have one. As a baseline for comparison, the major costs of current RC/CBM operations for NLS and network libraries are also estimated. Finally, two scenarios for implementing the distribution of DTBs and DTBMs are developed and examined: The first assumes that NLS receives all of the supplemental funding that has been requested for the transition, and the second assumes that no supplemental funding is received.

Current costs

The following lists, based on recent experience, show the major costs currently incurred by NLS for the cassette-based system, exclusive of magazines. Included are the major costs for both recorded book and playback machine operations, exclusive of costs for NLS management of the free library program. The assumptions used to estimate current costs are as follows:

Production and duplication of titles

The total annual production cost for cassette books, including both title production and mass duplication, is approximately $10,708,000.

Production and repair of playback machines

The total annual cost associated with cassette playback machines, including all production and repair, is approximately $14,720,000.

Total cost for current operations

The major annual cost incurred by NLS for current RC and CBM operations is approximately $25,428,000. About 58 percent of the total cost is associated with machines and 42 percent with books. This amount represents a baseline for comparison with the total NLS cost estimated for the future DTB distribution and DTBM system.

Revenues for implementation of the future system

In the middle of FY 2003, NLS submitted a long-term funding request to the LOC for a special appropriation to implement the free national library program’s future digital system, incorporating flash memory–based DTBs, DTBMs, and the hybrid business model. The supplemental funding represents the large capital investments—primarily for DTBMs and secondarily for DTB flash drive cartridges—to implement the new system in a reasonable amount of time. After DTBMs have largely replaced CBMs and inventories of flash drive cartridges have been accumulated for both mass duplication and possible future duplication on demand, NLS’s normal annual funding will suffice for operating the new system. The total amount of the initial supplemental funding request was approximately $80 million; about $2 million has been spent to date on planning and design studies for the new system. This spending combined with other modifications of the plan has served to reduce the remaining requested funding to $76.4 million.

While there are still unknowns about certain important aspects of the future system that are being addressed in ongoing projects, much more is known than was the case two years ago when the initial implementation plan was conceived and the initial supplemental funding request was submitted. Also, while NLS is confident of obtaining the supplemental funding, there is a chance that only some, or possibly even none, of it may be forthcoming.

Therefore, NLS has formulated preliminary transition plans and estimated the associated costs for different supplemental funding scenarios. The planning models from both the Playback Machine Transition Study and the DTB Distribution Study were used, resulting in a preliminary long-term planning model for both DTBM and DTB operations that will continue to be refined both during phase 2 of the DTB Distribution Study and beyond.

The two funding scenarios that have been developed are Plan 1—in which all patrons who want a DTBM have one by the end of FY 2012—and Plan 2—in which no supplemental appropriation is obtained and the implementation must be supported entirely by NLS’s normal operating funds ($53,904,510 for FY 2007). Both scenarios assume a flat readership base.

Implementation of the desired transition plan (Plan 1)

NLS strongly believes that the transition to the new technology should occur by the end of FY 2012 because patrons will benefit from the improved service and because a prolonged transition involves multiple risks due primarily to the obsolescence of cassette-based technologies. It is estimated that about $76.4 million in total supplemental funding should facilitate the implementation of this plan. All of this would be spent between FY 2008 and FY 2011.

The fundamental strategy underlying this plan is to proceed with a relatively rapid implementation by building approximately 60,000 DTBMs in FY 2007, 121,000 in FY 2008, 145,000 in FY 2009, 134,000 in FY 2010, and 129,000 in 2011. (See appendix 4.) Thereafter, production will drop off to 32,000 by FY 2017 and should level out at about 30,000 per year. CBM production will end in FY 2006, and no C1s will be built during FY 2007 (the last half of option year 3). Funds saved that would otherwise have been spent on CBMs in FY 2007 will be used to support the development of the retrospective DTB collection: approximately 20,000 of the most popular book titles will be duplicated in 55 copies each for allocation to network libraries to begin development of DTB collections for circulation to patrons in FY 2008, when DTBMs become available.

In this plan, no shortage of CBMs develops during the transition period, although the available-to-assigned ratio drops from 7.7 percent in FY 2008, to 4 percent at the end of FY 2009, and returning to 7.4 percent in FY 2010, after which a continuing surplus of CBMs is expected. There is no shortage of CBMs in FY 2010—although there is a projected deficiency of E1s. As noted, enough DTBMs will be made available so that all patrons who want these machines will have them by the end of FY 2012. During the transition period, a forced availability factor will be applied to DTBM inventories in network libraries. That is, for every twenty DTBMs on loan, one will be reserved in inventory to replace failed machines used by readers who have already converted to DTBMs (especially the estimated 10 percent who would have DTBMs only, as opposed to the rest, who would have both machines). After the transition period, the inventory levels of DTBMs would be brought up so the available-to-assigned ratio is 10 percent, and production levels out at about 30,000 machines per year.

DTB cartridges would be first purchased in FY 2007 to produce titles from the retrospective collection, and then in quantities necessary to support mass duplication for four years and mass duplication (and possibly duplication on demand) in subsequent years. Large-scale mass duplication will begin in FY 2008. DTB cartridges and containers will both be reconditioned and reused. It was assumed that there would be no weeding of the retrospective titles from network library collections, but that otherwise 50 percent of all mass-duplicated copies would be weeded and reused after three years in circulation and another 25 percent would be weeded and reused after six years in circulation. Thus, reuse of cartridges and containers would begin in FY 2012. Maximum purchase requirements would be about 1,600,000 cartridges in 2011, before any cartridges are made available from weeding, but would decline after FY 2012, attaining a steady-state level of under 400,000 by 2017.

For this scenario and for Plan 2 as well, it was assumed that 2,000 new title masters will be produced annually for every year in the time period. Under Plan 1, all titles would be mass-duplicated in RC format through FY 2010. This would be the last year of RC mass duplication, because only 26 percent of book reading would come from RCs in FY 2012, and all patrons who want DTBMs would have them by the end of that year. After 2010, production quantities would be too small to cost-effectively mass-duplicate RCs.

Volunteers would continue to perform repairs on CBMs during the entire period, with an assumed reduction of 3 percent per year in capacity. After the transition period, the number of required volunteer repairs (less than 30,000 per year) drops well below the capacity level. Although volunteers may perform some DTBM repairs, the model at this stage assumes that all repairs are performed by commercial repairers. Commercial repair capacity for C1s would be 6,000 in FY 2007, 9,000 in FY 2008, and 12,000 in FY 2009 and later, plus 4,500 for E1s in all years (assumed for both plans), but commercial repair of C1s would not be required after FY 2011. Volunteers could handle all required repairs at that point. Any commercial repairs after FY 2011 are strictly for E1s, and the volume probably would not be sufficient to support a contractor. DTBM repairs would increase over time, ultimately approaching a steady-state number of about 40,000 per year.

The assumed unit prices for new CBMs were taken from the current C1 contract, and it was assumed that the DTBM will cost about $200 per machine. The wholesale unit price of flash drive cartridges was assumed to begin at $10 in FY 2007 and gradually decrease to $6 in FY 2011, after which it remains at that level. The unit price of RC mass duplication was calculated with the assumption that 25 percent of duplication costs are fixed; hence, as production quantities decrease, the unit price will increase. The unit price of both RC and DTB containers was assumed to be constant at $0.60. Mass-duplication unit cost for DTBs was assumed gradually decrease through FY 2012 and thereafter because of the economies of scale from larger production runs. Unit costs for CBM repair parts and commercial labor, for both C1s and E1s, were taken from current operations, while the average parts and labor costs for DTBM repairs were each assumed to be $40.

NLS would like to implement this plan and is hopeful that it will be feasible, especially since the total supplemental funding request is slightly lower than what was originally envisioned.

Implementation with no supplemental funding (Plan 2)

In Plan 2, no supplemental funding is received, and the new system must be implemented using only NLS’s normal operating funds ($53,904,510 in FY 2007). NLS would prefer to avoid this scenario, both because it will significantly delay the benefits of the new system for patrons and because the multiple risks associated with a prolonged transition will significantly increase the possibility of service interruptions due primarily to the obsolescence of cassette-based technologies.

The fundamental strategy for this plan would involve building only 24,000 DTBMs in FY 2008, 51,000 in FY 2009, and then quantities typically in the mid-50,000s through FY 2015, at which point production could be increased to the mid-60,000s. Maintenance levels of DTBM production (as seen in the current CBM system) would still not be in effect in FY 2017. Option year 4 as well as option year 3 of the current CBM production contract would have to be exercised because the slow rate of DTBM production would require a larger initial stockpile of CBMs to carry the system through the transition period, which would extend past FY 2017. Because of the requirement for producing CBMs during option year 4 of the C1 contract, funding for mass duplication of the retrospective titles in FY 2007 would not be available. Under this plan, only 500 (rather than 650) titles would be mass-duplicated in FY 2007 at 300 copies each (rather than 350). Thus, the DTB collection available for circulation from network libraries to patrons at the beginning of FY 2008 would be considerably smaller than would be the case for Plan 1. Of course, fewer patrons would have machines capable of using the DTBs.

In Plan 2, actual shortages of CBMs develop during the transition period in FY 2011 and FY 2012, and a shortage almost develops in FY 2010. It is really only in FY 2014 that CBM inventories return to the levels required to support smooth operations, after which a surplus of CBMs develops as in Plan 1. Not enough DTBMs would be available to complete the transition by FY 2017; at that time, there would still be about 83,000 patrons who want DTBMs but would not have them. The forced availability factor of 5 percent would still be in effect in FY 2017.

Under Plan 2, purchases of new DTB cartridges would be far less than under Plan 1 because far fewer would be required to support the reduced number of patrons who have DTBMs. Mass duplication would begin in FY 2007 just as in Plan 1, and both DTB cartridges and containers would be reconditioned and reused in operations, with the same assumptions made about weeding these materials and reusing them. Cartridge purchase requirements would be more uniform and lower during the transition period, however, and would increase through the entire period to about 550,000 in FY 2017.

Like Plan 1, Plan 2 assumes that 2,000 new title masters will be produced annually for every year in the time period. In Plan 2, however, all titles would be mass-duplicated in RC format through FY 2015 because so many patrons would still use only CBMs that RC mass duplication would be warranted. However, NLS has grave concerns about whether such production will be technically (or economically) feasible at that juncture due to the obsolescence of cassette technology.

Volunteers would continue to perform repairs on CBMs during the entire period, with an assumed reduction of 3 percent per year in capacity, and would play a longer and more important role than in Plan 1; only in FY 2015 would volunteer CBM repair capacity exceed the need. Also, although volunteers may perform some DTBM repairs, the model assumes that all repairs are performed by commercial repairers. Commercial repair capacity for C1s would be 6,000 in FY 2007, 9,000 in FY 2008, and 12,000 in FY 2009 and later, and 4,500 for E1s in all years, as assumed for Plan 1. In this case, however, commercial repair of C1s would have to continue at full capacity through FY 2014 rather than FY 2011. DTBM repairs would increase over time, ultimately approaching about 30,000 per year in FY 2017 rather than the 40,000 steady-state level in Plan 1, simply because the entire readership would still not have DTBMs. The same assumptions about unit prices for all production factors were used in estimating the costs for Plans 1 and 2.

NLS would prefer to avoid Plan 2. Such a prolonged transition would pose significant operational risks and delay giving many patrons the benefits of digital technology for many years.

Rate of transition

The transition of the free national library program from the current analog cassette-based system to a digital flash memory–based system is a complex process that will continue to require very careful planning and execution. It is more complex than the most recent transition from disc to cassette (RD to RC), because every aspect of the system will change, some aspects more than others.

NLS’s fundamental transition strategy is still to wait for the necessary further declines in the wholesale unit price of flash memory that will make implementation economically feasible. But this strategy also includes execution of all other necessary planning and implementation steps that can be logically performed before FY 2008.

It is clear that market prices for production factors and technological evolution may not be the only factors, or even the most important factors, ultimately constraining the rate at which the transition to a digital delivery system can proceed. Fiscal limitations could turn out to be the binding constraint, specifically whether NLS receives all, some, or none of the supplemental funding requested for the transition. NLS, of course, hopes to receive all of the requested supplemental funding and to execute the transition as rapidly as possible, both because service to program patrons will be improved, and because there are significant risks associated with a prolonged transition.

Risks of a prolonged transition

While the definition of a "prolonged" transition can be debated, NLS believes that an implementation plan is prolonged if DTBMs and DTBs cannot be provided to any patrons who desire them by the end of FY 2011. In all likelihood, the most important factors that will determine the rate of the transition will be (1) how fast DTBMs can be manufactured and (2) how fast customized DTB Flash drive cartridges can be purchased. These rates will be determined largely by the availability of supplemental funding rather than the technological capabilities and manufacturing capacities of suppliers.

The risks associated with a prolonged transition to the digital system are discussed next, in order from most severe to least severe, although all of the risks warrant concern.

Insufficient CBM inventory. While the program has a surplus of CBMs, it is possible that a shortage could develop if it becomes necessary to extend the use of cassettes during a prolonged transition since CBM production cannot be resumed once it has been terminated. The technology is obsolete, with very few manufacturers; only one of them makes the NLS CBM, which is built to custom specifications. An additional constraint is that CBMs must be produced at approximately current levels (42,000 machines per year) because this is the manufacturer’s minimum economic threshold. However, even if all requested supplemental funding is obtained, NLS’s budget cannot support both CBM production at these levels and the manufacture of DTBMs, plus the purchase of DTB cartridges as well. Therefore, CBM production must effectively cease and DTBM production begin, although there could be overlap during the last half of FY 2007 and the first half of FY 2008 if option year 4 of the C1 production contract is exercised. If actual production rates of DTBMs in subsequent years turn out to be significantly lower than planned, shortfalls in available CBMs could result during the transition period.

Inability to obtain CBM repair parts. Not being able to obtain repair parts for CBMs as cassette playback machine technology becomes obsolete is another potential problem. CBM repairs will continue be crucial to the smooth operation of the program until DTBMs are effectively in place and the residual inventory of available CBMs becomes so large that they will be discarded rather than repaired. While the exact year in which this will occur is not certain, it will be no earlier than the end of the transition period, however long that may be. NLS, library staff, and volunteer and commercial repairers maintain inventories of repair parts (total system-wide inventory for most parts represents about a one-year supply). The current manufacturer of the CBM produces a number of critical repair parts on the same assembly line on which the CBM is built. When the CBM line is shut down, these critical repair parts will no longer be produced. NLS must therefore procure a lifetime supply of these parts before the line is stopped. The quantity needed has been projected on the basis of a four- or five-year transition period. If it runs longer, shortages of these key parts will develop.

Inability to obtain RC components. Another serious concern with a prolonged transition is the potential inability to obtain RC components. The technology is becoming obsolete; worldwide demand for products that use this technology has declined substantially and that trend will continue. Firms continue to exit the industry as demand declines, competition becomes more intense, and profitability declines, thus resulting in fewer sources of supply and higher cost for buyers.

Decline in volunteer repair capacity. Volunteers perform most CBM repairs and have been invaluable over the years. However, both demographic and structural changes in the telecommunications industry—the source of most of the volunteer force—as well as the advancing age of many volunteers, are resulting in a decline in the number of machine repairs that can be performed by volunteers. With regard to the DTBM, NLS envisions a greatly reduced need for repairs but more reliance on commercial repairers, although the plan is for volunteers to perform certain types of repairs; therefore, NLS is not overly concerned with some decline in volunteer repair capacity. However, if the transition is prolonged, a decline in volunteer repair capacity will present a problem and result in an increase in the inventory of CBMs needing repairs and/or increased costs to NLS by having commercial repairers compensate for fewer volunteer-performed repairs.

Higher costs for maintaining dual systems. Economies of scale exist in many types of production. This is also true for the talking book program from the perspective of both NLS and network libraries. Relatively more resources, including labor, equipment, and supplies, are required for storing and circulating multiple types of media and machines than for a single type or for fewer types. While library distribution operations handling more than one type of medium and machine can and do share resources (staff working with both types, common receiving and shipping areas, common information support systems, etc.), the fewer the types of media and machines managed, the more cost efficient the operation. With regard to books, it will be relatively more expensive per copy to produce books in both RC and DTB formats, because mass-duplicators’ fixed costs for job set-ups for individual titles will be amortized over smaller quantities in production runs. Thus from both network library and NLS perspectives, it is desirable to avoid a prolonged transition period in which dual systems must be maintained.

Negative public relations. The final risk is that many patrons will be wondering why the transition to digital technology is taking so long. Many patrons have been following NLS’s digital progress in published reports and expect to receive a player soon after the 2008 launch. In the best-case scenario, all NLS patrons who wish to have a DTBM will have one by the end of 2011. If the transition is greatly extended, users waiting for a player are likely to become increasingly dissatisfied—and to express their frustration at the delay.

Major steps remaining in the transition

Regardless of whether NLS receives all, some, or none of the supplemental funding, all of the major remaining steps in the transition plan must be performed. When—not if—these steps will be performed will be determined by the actual funding received. Therefore, for the purposes of the discussion, it was assumed that NLS will receive all supplemental funding as requested and the dates shown reflect that assumption.

Development of the DTB title master collection. As stated in Section 2, the goal is to have approximately 20,000 total titles in DTB format ready for distribution by the end of FY 2008. From FY 2004 onward, all title masters have been produced in digital format. It is also planned that book production contractors will perform the entire gamut of DTB title master preparation including the narration of audio content in .wav format, production and insertion of XML files into the raw audio files, application of the AMR–WB+ compression codec, encryption of the encoded files using the NIST Advanced Encryption Standard, and creation of image format files for the title masters. Approximately 2,000 new titles per year will be produced in DTB format during this period, and 1,500 to 1,600 analog (RC format) titles per year will be converted to DTB format. Annual production of new DTB titles beyond FY 2008 will be 1,300–1,700 per year, while the number of analog-to-digital conversions that will be performed is unknown. Period of performance: October 2002 and continuing.

Pilot tests of Internet delivery. The pilot testing of Internet delivery for magazines has already provided useful information for implementation planning and will continue with the same offerings—U.S. News & World Report, Smart Computing in Plain English, and People. Magazines will continue to be segmented at the article level to facilitate downloads by non-broadband channels and to have navigation aids included. The format in which they are available, however, will shortly be changed from MP3 to AMR–WB+ and will be encrypted using the new protection scheme. This will require NLS to distribute player software capable of handling the new codec and protection schema. Sometime during 2007, NLS is planning to offer patrons DTBs for Internet download; these will in fact precede the offering of DTBs on flash memory cartridges via USPS delivery. Period of performance: October 2003 and continuing.

DTBM, DTB, and container design contract. The DTBM, DTB, and container are being designed, and the current objective is to have prototypes and design specifications for all of these products by the end of May 2007. A series of usability tests has demonstrated that the designs developed for the player and cartridge will be successful, but additional design work is needed on the mailing container. The next major step in this contract will be to develop and test functional prototypes for each product in August 2006; this will be followed by preproduction (beta) testing in February 2007. NLS quality assurance test plans for these products will be developed concurrently and applied to both design and preproduction prototypes; usability tests will also be performed. Moreover, environmental and certification testing will be performed on both versions. For the DTBM, the contractor will also perform a repair/dispose analysis and develop a machine diagnosis system and procedures for repair, a software support system, and training materials for repairers. Design analyses for manufacturability will be performed, incorporating the feedback from potential suppliers in the presolicitation process. The final design will then be transferred to mass production, and the contractor will provide support to the DTBM manufacturer during the initial months of mass production in late FY 2007 and early FY 2008. All technical documentation for the products will be transferred from the design contractor to the manufacturer. Continuing support in the form of assistance with ordering and installation of production tooling, development of the production supply chain and quality assurance system, and validation of the first mass-produced units will be provided by the design contractor. Period of performance: November 2005–November 2007)

RD phase-out. NLS will recommend that all RD collections be transferred from network libraries to NLS before the first mass-duplicated DTBs are received. (This will be discretionary on the part of network libraries.) Perhaps one-third of network libraries have already removed their RD collections. Beginning sometime before FY 2008, it will be feasible to support all remaining RD circulation from the MSCs. Some copies of RDs for certain titles may be discarded by NLS or locally. Very few patrons will be affected by this move; RD readership in the program was down to 12,660 individuals and 1,577 institutions in FY 2004, and RD circulation services to them will continue to be provided by MSCs. By FY 2007, there will be very few RDs and RD-only readers. Period of performance: October 2004–end of FY 2007)

Redesign of library information systems. Several separate efforts will be required to design, develop, and modify the information systems that are used for RC circulation and CBM control and will also be used for DTB circulation and DTBM control. Various information systems, including the three multilibrary systems (READS—Reader Enrollment and Delivery System—KLAS, and CUL) and two independent systems used by large regional libraries, must be modified to support the distribution of DTBs. NLS will assume the responsibility for modifying READS, but individual libraries and groups of libraries will be responsible for modifying the independent and multilibrary systems, respectively. Information systems must be modified to facilitate library-based distribution of DTBs. These modifications may involve one step, but two are more likely; the first involves the development of the information system functionality required to support library-based distribution (required by the beginning of FY 2008), and the second will facilitate possible future DOD center–based distribution. Period of performance: FY 2007 and continuing.

Implementation of library information systems. Implementation will probably be performed both by the contractors who modified the systems and by network library information technology staff who are responsible for their operation. In this step, or steps, all components will be installed, tested, and verified onsite. This implementation may be performed in two steps as described in the preceding paragraph. Period of performance: FY 2007 and continuing.

Production, allocation, and distribution of DTBMs. NLS aims to have more than 180,000 DTBMs in use by the end of FY 2008. Most will be the basic model. If the full supplemental appropriation is obtained, NLS intends to produce DTBMs at a rate of about 120,000 to 140,000 machines per year during the transition years (2008–2011) and then produce them at a much lower rate (probably about 30,000 per year) to compensate for attrition. The procurement process has actually begun; the presolicitation information-gathering process began in early FY 2006. It involves identifying potential producers of DTBMs and obtaining their ideas on the manufacturability of the DTBM prototypes and incorporating them into the design. Sometime during FY 2007, a manufacturer will be awarded a production contract, create the necessary manufacturing tooling, establish the assembly line, and begin mass-producing DTBMs. As the product moves into production, the manufacturer will work closely with the design contractor for several months at the end of FY 2007 and the beginning of FY 2008. NLS will have a manufacturer’s warranty of some type on the DTBM; as a performance history is accumulated, the most favorable warranty terms for NLS will be identified and implemented. New DTBMs will be allocated to network libraries on the basis of readership (the current policy for allocating CBMs). Program rules require that veterans be offered DTBMs before other patrons. After veterans, the current plan is to offer DTBMs to “early adopters” of new technology and to younger readers; this approach will be further evaluated in the DTB Distribution Study and by DLTPG. Period of performance: Early FY 2008 and continuing.

Production of flash drive cartridges. The mass production of flash drive cartridges customized to NLS specifications in accordance with the final design for the DTB will begin during this step. The customized features of the cartridge will be the shell and the controller chip, which will prevent unauthorized overwriting of the contents. Production tooling must first be designed to manufacture these custom components, then they are assembled and tested; at that point, mass production can commence. In this manner, NLS will be able to obtain the best prices for the cartridges via quantity discounts. This step will, in all likelihood, not begin until the wholesale unit price of 256-MB Flash drives declines to below $10, and production will be limited at this price. As the price declines further, production will be increased, gradually rising to the level required to support steady-state operation of mass duplication and possibly limited hybrid distribution. Period of performance: FY 2007 and continuing.

Production of DTB containers. This step will see the mass production of DTB mailing/storage containers. Both network library operations and future DOD center operations may use the same container, or variations may be advisable because of operational requirements or the need to provide some way for patrons to differentiate between library and DOD center containers. A durable, reusable mailing envelope is also being considered for DOD center operations, although a container will more likely be used. In any event, the design of production tooling will occur in mid–FY 2007, with building, installation, and testing during the rest of FY 2007. NLS plans to recondition and reuse DTB containers, a process that is both economical and environmentally friendly. Period of performance: FY 2007 and continuing.

Mass duplication of DTBs. As recommended in the first phase of the DTB Distribution Study, mass duplication of DTBs must await further declines in the wholesale unit price of 256-MB Flash drive cartridges to be economically feasible; this is expected to take place by the beginning of FY 2008. NLS contacted potential mass-duplication contractors early in 2006 to inform them of production tools and processes required for the mass duplication of DTBs; the development of the tools and processes will occur during FY 2006 and FY 2007. Since only a minority of patrons will have DTBMs initially, the issue of how many copies per title should be produced is being addressed in the DTB Distribution Study. There is probably some minimum threshold for the mass duplication of DTBs; however, there is some reason to believe that it may be below that for RCs. Full-quantity production of DTBs for mass-duplicated titles will not begin until all, or almost all, patrons have DTBMs. Period of performance: end of FY 2007 and continuing.

Reduction of CBM inventory. After the transition period begins, CBM inventories will gradually drop as DTBMs generally replace CBMs over about four years. New CBM production will cease about early in 2007. After CBM production ceases, inventory will be gradually reduced by normal attrition through loss and damage. However, after DTBMs have been completely phased in and used for several years, there will ultimately be an inventory of CBMs beyond the number needed to support the reading of magazines, RC titles not converted to digital format, and patrons who still prefer RCs/CBMs to DTBs/DTBMs. NLS will determine the most appropriate disposition of this excess inventory. Period of performance: FY 2007 or FY 2008 and continuing.

Development of the DTBM repair infrastructure. During the first half of FY 2008, NLS will evaluate DTBM repair processes and parts needs. As patrons begin to use DTBMs and manufacturers and NLS have time to perform various types of testing on production units, data on the machine’s longevity, reliability, and maintainability will accumulate. The types and frequencies of failures will be analyzed to improve product quality, determine the best warranty strategy, and develop the infrastructure for repairing DTBMs. Most types of repairs can and will be performed by volunteers, while others may be performed exclusively by commercial repairers. Testing and repair procedures will be developed by NLS and communicated to library staff, volunteers, and commercial repairers; disposal criteria and procedures will also be developed and explained. Parts procurement requirements will be determined, and procurement will begin during FY 2009; because the DTBMs will carry a manufacturer’s warranty of at least 6 months if not 1 year or longer, this schedule is viable. It is envisioned that the parts logistics system will be very similar to the one for CBM repair—centralized procurement and storage of parts by NLS, distribution of parts to repair locations, and maintenance of smaller inventories of parts onsite at repair locations. Repairers will also be trained. Commercial repairers may need to be brought online to perform repairs not handled by volunteers and library staff. Period of performance: FY 2008 and continuing.

Phase-out of RC mass production. As DTBs and DTBMs come online, the issue of how many RC copies per title should be mass-produced must be resolved. Once the transition period begins and for approximately the next two years, most patrons will still have only CBMs and hence will need RCs. However, after that, most patrons will have DTBMs, and the predominant medium will be the DTB. At some time shortly thereafter, the demand for RCs will fall to a point at which the economic threshold for mass duplication of RCs is reached, and production of new RC titles will cease. It will simply be too expensive per copy to produce such small numbers. This is consistent with a stated DLTPG objective: not to sacrifice the total number of titles in order to produce large numbers of copies in one or both formats. The DTB Distribution Study is addressing this matter, with analyses being performed to determine the most appropriate phase-out plan. Period of performance: FY 2008 and continuing.

DOD implementation. As recommended in the DTB Distribution Study, NLS may implement DTB distribution by DOD centers after beginning with mass duplication for library-based distribution, the logic being to await further refinements of duplication technology automation for NLS-customized flash drives and to allow time for information system modifications. DOD centers would be established, set up, and begin operations during this step. There might be only one center initially, but a second might also be established shortly afterward. Having two centers will reduce the risk associated with disruption of operations, and shorten delivery time somewhat for DOD books. During this step, network libraries and their contractors will be performing any modifications necessary to accommodate DOD-based distribution. The information system for the DOD center would be developed, a contractor selected to operate the center, the facility (including equipment and information system installation) set up, and both component and integrated systems testing performed. Pilot testing would then take place between the DOD center and one designated library for each of the five library information systems in use. After successful testing has been completed, the center would go online. It should be noted, however, that DOD center–based distribution may, in fact, never be implemented if the cost of flash memory cartridges falls far enough in the years following FY 2008. Period of performance: FY 2008 and continuing.

Weeding of RC collections. RC collections in network libraries will be weeded before, during, and after the transition to DTBs. As demand for individual RC titles drops, excess copies will be removed from network library collection storage. This trend will accelerate for those titles also available in DTB format. Some of these weeded copies may be disposed of or redistributed to other libraries via the NLS XESS system. Any containers will be reconditioned and reused. Period of performance: Ongoing)

Weeding of DTB collections. Weeding of DTB copies in library collections will also occur as demand for titles decreases with age. Analyses have shown that the first significant weeding can take place after a title has been in circulation for three years; another pronounced drop in demand with an associated potential for weeding occurs after about six years in circulation. Excess copies will be sent to DTB mass-duplication contractors for reuse, to other libraries that need copies of the titles, or to DOD centers for reuse. This step will probably not begin until all patrons have DTBMs. Period of performance: FY 2011 and continuing.


Link to a listing of appendices.

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Posted on 2006-11-02