The Chronicle of Higher Education has a nice audio interview (welcome to the digital age, CHE!) with Brewster Kahle, who heads up the Open Content Alliance, a consortium of university libraries who want to digitize out-of-copyright material in their stacks and make it freely available. Google, on the other hand, while more Herculean in their ambition, is just a little bit evil when it comes to this sort of thing.
On the other side of it, the scale of the Open Content Alliance, as well as decreasing technology costs, are making it much more affordable to make great digital copies of old books, down to 10 cents a page. That's cheaper than a color copy! And it's digital, bitches -- that's like a million copies! Text-searchable, too!
I still think there has to be some sort of grand alliance between Google, the nonprofits, and universities to make these older texts available. Universities have the texts, which they can better preserve and promote if people can get them digitally; Google has the storage, the interface, and the public platform, which they can use to win over whole generations of users and tie in to their other offerings; and the nonprofits have the public mission, which is to get this to the people for free.
There will probably have to be other considerations -- maybe Google works with the universities on course-management and communication apps, maybe the nonprofits take over some of the specialty heavy-lifting on scanning out-of-print/out-of-copyright works. But if this could work, everyone will win -- especially readers.
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