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At the beginning of the pandemic – as shops and public spaces temporarily shut their doors – the Reaktor Amsterdam team thought about the impact the lockdowns would have on museums and cultural institutions.
Amsterdam has the highest density of museums in the world, a place where the cultural arts is highly valued. So when museum closures – both local and abroad – started to hit the news, we were compelled to take action.
Of course, the pandemic has forced almost every business to make major adjustments to their offering and operations. Some businesses are more agile than others — think of the restaurants that have converted their operations to deliver prepared meals or meal kits instead of serving at tables on premises.
Museums are a little different, because they aren’t your typical commercial enterprises. Their income can come from anywhere – from governments and NGOs, to individual and commercial donors and sponsors. Some museums charge admission fees, and it’s hard to imagine a museum without a gift shop.
To help museums weather the storm of COVID, Reaktor teamed up with Wouter van der Horst, a museum consultant who helps museums in their transition to digital. Together they designed a holistic digital framework to help museums and cultural institutions build financial resilience. As Wouter says, for museums, “revenue doesn’t have to be a dirty word”. This framework encompasses a number of elements, though this article focuses on the digital revenue aspect.
Finding a way forward: the digital ecosystem approach
To help museums forge a path ahead, it helps to think about the museum as an ecosystem. By mapping out the broad areas and constituent parts that make up the museum, it’s easier to understand the ways in which it must adapt to a changing world. We created a model with 7 parts:
- Collection and building — the physical space and the artefacts and exhibits within it, including their interpretation, display, and conservation.
- Business relationships and partnerships — sources of funding, donations, financial stakeholders, etc.
- Education — research, inclusivity, accessibility, etc.
- Digital, tech, and innovation — digital experience, immersive tech, social media, website, apps, and digital strategy.
- Organisation — administration, HR, diversity/inclusivity, staff training.
- Maintenance — infrastructure that supports digital, administrative, and other services.
- Revenue models — ticket sales, digital business models, memberships, e-commerce, partnerships, museum shop, funding.
Extending this ecosystem framework to the digital realm, we can think about the ways in which internal departments, suppliers, tools, systems, customers, and external partners can be brought together to help drive the museum’s strategy.
Not quite business-as-usual
Borrowing some concepts from the world of the digital economy can help us map out potential paths forward. There are a number of business models, and some lend themselves more naturally to museums. Note that the examples listed don’t always neatly fit into only one group and can span multiple categories.
- On-demand — Uber
- Subscription — Netflix, HelloFresh
- Peer-to-peer — Kickstarter, eBay
- Ad-supported — Twitter, Google
- Freemium — Dropbox, Spotify
- Ecommerce — Amazon, Shopify, Etsy
Building a digital revenue model
With so much of the physical aspect of the museum experience being greatly diminished, museums have had to shift their focus to creating digital experiences. Concentrating on ways in which museums can strengthen their financial resilience through digital platforms, we’ve come up with three broad areas:
- Knowledge and expertise
Knowledge and expertise
Museums possess a great deal of institutional knowledge — whether it’s about history, culture, art, or the natural world. Leaders should therefore think about how to bring this knowledge outside of the four walls of the museum, whether it’s through a subscription or consultancy model. Think about how much value could be shared through the range of interdisciplinary experts a museum has within its staff and immediate network.
There are a number of things museums can think about to start to generate income through expertise:
- Promoting on-demand services via social platforms like YouTube, Facebook, and Instagram.
- Packaging premium deals with membership or subscription programmes with some content behind paywalls on the museum website.
- Creating a consultancy branch to offer virtual services.
The proliferation and use (or exploitation) of data is a major theme in our modern, digital society. Museums are no exception, with increased focus on ways in which data around their collection and artefacts can be used in novel ways. Saskia Scheltjens, Head of Research Services Department at Amsterdam’s Rijksmuseum says that data can help museums tell “more complex, polyphonic stories.”
Of course, it’s important for data around essential collections to remain free to the general public. Scheltjens says that collection data should adhere to the FAIR GLAM model, which refers to Findable, Accessible, Interoperable, and Reusable data for Galleries, Libraries, Archives, and Museums. Museums can then define which business and learning institutions should pay for richer data and informational services.
Museums are some of the oldest and most recognisable cultural institutions on the planet. In business terms, this means they collectively possess a great deal of brand affinity amongst the general public. Museums are able to tap into this through various means:
- Ecommerce — selling merchandise and products either in their own webshop or through larger ecommerce platforms and resellers.
- Partnerships with brands — think of Uniqlo and MoMA, or Vans and Van Gogh Museum.
- Loyalty and donations — attracting one-off or periodic donations from social media or the mailing list.
- Advertisements — museums with sufficient digital traffic can generate ad revenue.
Now, some of these may not be a good fit for a particular museum. The point is to consider the broad range of ways that museums can generate revenue from their digital presence.
Building skills for digital evolution
Just as your average tech company probably lacks an expert in Bronze Age weaponry, museums might not have access to experienced digital project managers. Catherine Devine, Global Business Strategy Leader for Libraries and Museums at Microsoft, points out that “you can’t have all of the skills [needed for digital transformation] in-house. We really need to think about how we continually update the skill set of organisations to optimise and maximise the use of digital to achieve museum objectives.” Tricia Golden, the National Gallery of Ireland’s Director of Corporate Services, suggests that museums can look to the private sector for inspiration. Investing in project management skills, as well as hiring in specialist digital talent can help museums overcome these skill gaps.
With COVID, there has been a shift to digitising the exhibition experience. Fred Dent, a project manager at the British Museum, points out that traditionally, digital platforms have been used to focus on providing the greatest possible access to the widest amount of objects in a collection — by contrast, what you see inside a museum may represent only a small fraction of the total collection. The British Museum’s Artic exhibition, which was only open for about a month before a countrywide lockdown, is their first major exhibition to get the digital treatment. Bringing this to life involves 360 virtual reality experiences, which require specialist outside technology partners to pull off. Should this prove to be a hit with virtual visitors, don’t be surprised to see future blockbuster exhibitions existing in digital formats. Digitalisation has the added benefit of safeguarding accessibility to museums for young people, the elderly, people with disabilities, and vulnerable groups.
The future of museums in a post-COVID world
By thinking of the museum as an ecosystem of interconnected parts, we can begin to think about the ways that these institutions can adapt to a rapidly-changing world. Interruptions to business-as-usual have put a financial strain on museums and galleries. By thinking about how to apply concepts from other digital business models, museums can improve their financial resilience and prepare for the road ahead.