Where shall the money come from?
Post-COVID19 museum funding [Part I]
Museums are non-profit institutions at the service of society. We know it because the museum definition still in force, the one that has been questioned and currently still under discussion (or so it seems), says so. Should we stop here then?
Yes! Museums are non-profit organisations and yet their coffee shops help them rake in funds to operate and sustain their programming. Their gift shops — in the bigger museums it’s more than one located at strategic points of the building — sell exclusive products displayed for purchase. Blockbuster exhibitions generate much needed revenue to support acquisitions and outreach, all in good faith and knowing too well that museums are, by definition, non-profit institutions. There is more. Nicely tucked underneath the non-profit umbrella, museum restaurants and cafeterias work on their sales and profit margins, experiment with new products to increase revenue and operate in much the same way as a commercial establishment. In most cases, this revenue generating infrastructure would complement museum ticketing, staggered by age groups and categories.
COVID-19 has wrecked havoc of this business model that is nothing short of a paradox.
As an institution that is publicly committed, on one hand, to stand for its non-profit ideals and ambition the museum is, at the same time constrained, to profit from its services.When seen through the lens of a business model, irrespective of whether it is outright non-profit or subtly packaged as a profitable brand, the 21st century museum institution comes across as lacking in business diversification. As the institution strives to keep its core business non-profit, it has paradoxically created funding models that overwhelmingly service one facet of its operations — the physical and visit-centred.
There does seem to be alternatives to explore, some of which have been tried and tested over the past decade. Two of these hold potential to become trends in their own right in the not too distant future. The third is a challenge to many albeit a desired ambition for some. There is certainly more …
The pay-per-use
The month-to-month subscription economy includes the likes of Netflix, and Spotify but very few museums. Where do museums stand on this one?
Just before the COVID-19 pandemic took us all by surprise, the Westerburg Museum in Bremen (Germany), experimented with a pay-per-use approach to its museum ticketing. With the full ticketing price covering approximately 90 minutes, the museum tried out a system based on 10 minute slots payable at a ninth of the full price.
The pay-per-use model empowered the museum to cater for audiences with lesser time to spare or, perhaps, keen on just one facet of the museum experience. Initial reactions to the scheme suggest that museum publics considered the scheme fair and more user-friendly. Moreover, visits increased considerably and this compensated for the decrease in the average price paid. Indeed, as the museum’s Managing Director Tom Schoessler states
‘Many appreciated the experiment, enjoyed it as a playful approach, and liked that they had the price in their own hands, without losing anything compared to regular prices.’
The thinking behind this model has a context to consider. Pay-per-use is grounded in good-quality products, confidence and customer empowerment. The business model is all about — ‘hey, we have good quality products and we’re confident enough to propose them to you. You’re free not to pay if you don’t experience what we’re telling you you’re getting.’ The model works best when museum publics have a personal relationship with the institution, thus building on relevance to sustain it. Indeed, what can make or break this model is the lack or otherwise of a loyal audience.
This thinking has been around at least for a decade and can be traced back to a paper published by economists Bruno S. Frey and Lasse Steiner way back in 2010. Since then it has also been experimented elsewhere by cultural institutions such as theatres. Zoos have also experimented with pay-per-use for quite sometime. Indeed, this is certainly a funding model to explore further.
Expert provision of services
Museums oftentimes tend to forget about the potential value of knowledge, know-how, resources and expertise they hold in trust or employ. Indeed, these resources hold much more potential beyond their relevance to the traditional museum idea. Is there scope to explore this potential further? I believe there is.
COVID-19 has been a catalyst in this respect. Brendan Ciecko of Cuseum does list a few including virtual cooking classes by the National Czech & Slovak Museum & Library, the Carnegie Museums of Pittsburgh and the Cummer Museum. The Seattle Museum of Art similarly offers a virtual special members-only lecture series with its curators every other week and the Asheville Art Museum provided virtual adult studio classes, such as Cultivating Digital Photography Skills.
It’s the Van Gogh museum initiative that I think holds the most potential at this historic juncture. The museum’s program of professional services seeks to target a client base of private collectors and entrepreneurs by providing them with advise and support in areas such as collection, conservation and preservation, installation of climate control systems, museum management, and the development of educational programs. This advise and support shall be provided by in-house expertise.
There is, indeed, a supply-demand equation in this choice which is also the reason behind similar initiatives spearheaded by the Indianapolis Museum of Art an Newfields which runs a software development company producing design custom software, websites and open source projects and the Toledo Museum of Art’s Center for Visual Expertise servicing a wide range of industries.
By broadening their diversification of services, and reaching out to new potential clients and consumers, museums can become much more financially resilient. Much can be gained by simply re-positioning their resources to service so far untapped consumer categories.
What about predictive content?
A few days ago the New York Times published an opinion piece with the title ‘Museums need to press the reset button and become more radical’. There is very little that is radical in the revenue generating models we have discussed so far. Most of what we discussed falls within the remit of mainstream business diversification, particularly with regards to alternative consumers for museum expertise. Pay-per-use is informed by the basics of what is generally described as mass customisation. What about predictive content ?
Predictive content is a marketing and manufacturing technique which combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production. When seen through this particular lens, the pay-per-use may be customised with personalised visits providing educational and experiential content according to the knowledge luggage of the single visitor. We can envisage a pay-per-use, customised visit revolving around a highlight in the museum experience, that can also be packaged in 10 minute slots or more. The best analogy I can think of is when reading a book. In my case, I rarely read a book from cover to cover at one go. Instead, I would read a chapter at a time, perhaps also reading more than one book simultaneously. I would not purchase the book with the obligation to read it from cover to cover at one go. Never felt the need to do so.
Museums are yet to explore the full potential of predictive content where the experience is customised for each and every visitor — be it a visit to the museum building, an online visit or both combined. By personalising the museum content across media platforms, be they physical or virtual, museums might be more comfortable answering the question -
Where shall the money come from?
To be continued
