Museums are non-profit culture organisations at the service of society. We know it because the museum definition as set by the International Committee of Museums (ICOM) says so. Should we stop here then?
Yes! Museums are non-profit and yet their coffee shops help them rake in funds to operate and sustain their programming. Their gift shops, in the bigger museums, 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 culture organisations. There is more. Nicely tucked underneath the non-profit umbrella, museum restaurants and cafeterias submit their accounts, 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 has, at the same time, to strive 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.
The Maltese museum ecology does apply some of these revenue-generation mechanisms that are mainstream in Europe and elsewhere. The gift shop business model has become mainstream over the last decade or so. Venues are available for hire or lease to host conferences, seminars, receptions, concerts and weddings too. Blockbuster exhibitions are less common although they do contribute much-needed revenue that is oftentimes both direct and indirect. Museum cafeterias and restaurants are an exception by comparison. Ticketing still generates a relatively high percentage of the revenue necessary to run the institution and is highly likely to be much bigger in the case of private or ecclesiastical museums where government subventions are not available.
Where can the local museum ecology tap into to bridge the gap between the fallout in revenue from ticketing and venue hire or lease and the increase in expenses to keep the museum open and running in spite of the drastic drop in paying visitors?
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 paperpublished 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.
Indeed, this is certainly a funding model to explore further. I sense potential for this solution locally, and variants or upscaling can produce interesting customised solutions.
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.
The Van Gogh museum’s initiative I think holds the most potential. The museum’s programme of professional services seeks to target a client base of private collectors and entrepreneurs by providing them with advice and support in areas such as collection, conservation and preservation, installation of climate control systems, museum management and the development of educational programmes. This advice 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 Centre 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. This is certainly within the reach of the local museum ecology and some have already experimented with this idea.
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 personalisation 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 would 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, and have never felt obliged 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?
Sandro Debono PhD (Lond.) is a museum thinker and culture strategist. He is the brains behind MUŻA, the Malta National-Community Art Museum, which he lead as project leader and first senior curator and for which he developed the bespoke original vision and concept. He is the national representative at the European Museum Academy and advisory board member at We Are Museums, the international platform of museum change-makers and innovators. Sandro is a regular contributor to Italian art journal ‘Finestre sull’Arte and Museumnext’, the online platform for museum leaders, makers and innovators.