Following the steps below will have you using the COI calculator quickly.
To find out more about the rationale behind COI and the calculator watch this video
Within COI, the term investment is used to refer to the money spent on physical audiovisual materials. This includes all of the money spent in the past and the projected money spent moving forward on the physical audiovisual items. The term expense is used to refer to money spent on digitization and storage.
Within COI, the term media refers to physical audiovisual items. There is a distinction made between media and content because media will become obsolete and degrade no matter what but the content stored on the media can be saved through digitization. However if digitization is not performed and the media is lost then the content is lost along with it.
To start we used the following assumptions regarding target formats for digitization and the average length of audiovisual items:
For Amazon we assumed that all preservation masters would be stored on Glacier and all Mezzanine and Access copies would be stored on S3. We then ran several scenarios using the Amazon pricing calculators (http://calculator.s3.amazonaws.com/index.html - with "FREE USAGE TIER: New Customers get free usage tier for first 12 months" unchecked). The assumptions and results can be seen in the table below.
The equation is:
y=a-c*exp(x/b) where c=shape param, y=# items remaining, a=initial archive size, x=year, b=time constant
The shape param = 400
In Economic theory, sunk cost refers to money or resources that have been spent on an investment or other effort that is unlikely to be recovered or at least considered worthwhile through continued spending on what is essentially a failed investment. Emotionally we may be tempted to continue expending resources on such investments because of past effort, but logically it is considered better to cut bait and accept one’s losses in order to move ahead with more viable or advantageous options.
While the COI Calculator does use past preservation spending (i.e., sunk costs) as a data point, those expenditures are not where the cost of inaction begins or ends. Past spending is one of several data points that combine to make an argument as well as to plan for preservation action. The reporting the Calculator provides presents what will become future sunk costs if preservation action is not taken (i.e., physical storage and other collection management activities that do not lead to reformatting or access) while also laying out the alternative actual costs of doing preservation work (digitization, file storage, continued collection management, etc.).
In and of itself, saying “We have already invested this much and therefore need to do more” is not an argument for preservation. However, saying, “We have spent this much, and will continue to sink costs into unrecoverable resources and assets if we do not reallocate X amount into reformatting and digital preservation instead” is a logical argument that needs to be made. The calculator lays out the implications of the failure to derive value from assets (as in the continued cost of storage and acquisition of inaccessible materials) as well as the implications of seizing the opportunity to derive value from assets (as in the future costs of digitization and file storage). In this way, the outcomes of using the calculator are about making the best financial decision moving forward: How much will these efforts cost, What can I reasonably afford, and am I comfortable with those levels?
While opportunity cost is an important economic theory regarding resource allocation, it is not entirely applicable to the COI Calculator. The timeline considerations (10-15 years) underlying the urgency of taking action and in part an inspiration for the tool are primarily concerned with magnetic media. Formats such as film or non-AV which can generally (though not across the board) be stabilized through storage environments and housing may benefit from such remediation as a secondary alternative, and would need to be analyzed separately under a different cost model, physical and digital storage requirements, and timeline. Research on the environmental stabilization of magnetic media (audio and video tape) have been inconclusive and, in addition to considering technological obsolescence, reformatting is the only real option.
In this case the opportunity cost should be considered more as what reformatting can be accomplished with the resources available, not what alternatives to reformatting exist. Reformatting (or migration) is the only option for magnetic media and certain other format types, though realistically not everything can or should be digitized. The COI Calculator looks to represent outcomes of alternate budget scenarios in order to estimate what is possible and come to terms with resulting outcomes.