Today we will be talking about State Library of Queensland by providing a brief overview of the library services first.
State Library of Queensland plays a lead role in serving all Queenslanders, through state-wide library services and partnerships with over 340 public libraries, including 23 Indigenous Knowledge Centres (IKCs).
Founded in 1896, we have become a bold and adventurous 21st century library driven by a commitment to access for all.
SLQ belongs to the people of Queensland. It is an inclusive and welcoming place for all, a trusted source for information, and a place for intellectual freedom, a cornerstone of democracy and custodian of Queensland’s memory.
SLQ is a ‘knowledge bank’ and vital community resource, as much a physical as well as a virtual place for sharing, learning, collaborating, and creation. As a community hub for democracy in action, here everyone is encouraged to have a voice.
From social enterprise perspective, we will be studying the network effects; see how it is affecting directly or directly.
Defining Network Effect
A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example. Initially, there were few users of the internet, and it was of relatively little value to anyone outside of the military and a few research scientists. As more users gained access to the internet, however, there were more and more websites to visit and more people to communicate with. The internet became extremely valuable to its users.
The chief hurdle for any good or service which uses the network effect is to get enough users initially so that the network effects take hold. The amount of users required for significant network effects is often referred to as critical mass. After the critical mass is attained, the good or service should be able to obtain many new users since its network offers utility.
If too many people use the good or service, negative network effects can occur, such as congestion. In the internet analogy, having too many users on the internet can hypothetically cause the speed to deteriorate, decreasing utility for users. Thus providers of goods and services which use a network effect must ensure that capacity can be increased sufficiently to accommodate all users.
Indirect network effects are “market mediated effects” such as cases where complementary goods (e.g. toner cartridges) are more readily available or lower in price as the number of users of a good (printers) increases. In early writing, however, this distinction was not carried into models of network effects. Once network effects were embodied in payoff functions, any distinction between direct and indirect effects was ignored in developing models and drawing conclusions. However, our 1994 paper demonstrates that the two types of effects will typically have different economic implications. It is now generally agreed (Katz and Shapiro, 1994) that the consequences of internalizing direct and indirect network effects are quite different. Indirect network effects generally are pecuniary in nature and therefore should not be internalized. Pecuniary externalities do not impose deadweight losses if left uninternalized, whereas they do impose (monopoly or monopsony) losses if internalized.
How can SLQ Benefit from Network Effects
SLQ can benefit in many ways by applying network effects. For example, creating applications for mobile devices that will enable access to multiple users and provide access to e-books and magazines could be really helpful. The innovation will attract larger audience.
An indirect effect will be if some revenue can be generated through the online app via pay per click advertisements.