Apple’s iTunes has redefined the notion of the 99c store. Its cool and fantastically successful. Its a prix fixe menu, its try before you buy, its 24-hour shopping. As a business model, its inspired. They’re currently fighting the movie studios over applying the same one-price model to movie downloads, but it looks as though they’re loose that one since the studios don’t get the elegance. Bummer.
So, it got me thinking about the museum world. If you’re a museum with a website, chances are your online visitor-ship is approaching an order of magnitude larger than your physical visitor-ship. Its certainly likely to be several times larger. This discrepancy is significant, and largely its an audience that will never walk through your doors, but they’re visiting you 24/7.
Now consider the fact that aside from entrance fees, a (maybe the) major revenue source for a museum is membership. But the benefits for becoming a member are almost exclusively geographically related. It gets you into the institution for a reduced fee, it gets you preferential treatment for events at the institution, it gets you a discount in the store. Its benefit requires that you live in the vicinity of, or visit, the museum. Its fantastically limiting, but hey, you can join online from anywhere in the world. Hmmm.
This means that the largest revenue streams for a museum, entrance and membership, require proximity.
This business model would last about one minute in the for-profit world. Imagine a software company that only sold its product within its city limits…
What can museums do to tap into this ‘customer’ base? Of course, some museums have an online store, and some may be making good money from it. (Yeah, right). But the online store is largely an outlet for museum souvenirs, serving as mementos from a visit. OK, books, jewelry, knick-knacks, blah, blah…
The problem here is that the expectation for the online shopping experience is set by the retail giants: its extremely sophisticated and enormous efforts are put into ‘conversion’ – turning your visit into a purchase. Online sales for companies are integral within their business and resource model. Tough competition.
Museums have two of the essentials for retail: a product and a brand. Actually, a museum’s brand is even more compelling than anything in the for-profit world since it has built-in trust, according to research into the public perception of museums.
So, here’s the 99c question. What is the product? What is that ‘killer app’ that would enable museums to (shock, horror) generate some revenue from their online audience? Museums are content goldmines, so what do they have that could be ‘productized’?
Is anyone targeting or thinking of targeting their online audience to deliver a product or even more interestingly, a service? What’s wrong with making some money? Just because you’re not-for-profit doesn’t mean you can’t make some money – you just might have to pay tax on it.
August 8th, 2006 05:46
A very good question.
But your proximity-based theory of museum memberships is slightly off. Most U.S. museums have reciprocal agreements with other museums across the U.S. who agree to let visiting members from other museums have the same benefits that they would at their home museum. So the museum membership does travel.
I still think your argument is valid though. The recipricity doesn’t travel that well….
August 8th, 2006 06:02
Actually, that makes it worse: a museum honoring another’s paid-for benefit, without the dues. Made even worse if you are a member of a large institution and you go to a small museum and take advantage of their discounts.
August 8th, 2006 11:44
This is quite the intriguing idea, and if I was employed right now, I’d SO steal it and take all the credit!
Seriously, this does deserve some study. What about for-profit websites that use a subscription model, e.g. Salon, or a site that has a mix of free and member-only content. How many users are they able to convert to subscribers/members, and is there a drop off in visitorship? If so (and there almost certainly is), would the increase in members outweigh the dropoff? And what content could museums provide that would benefit the cost of membership? I don’t know the answers to these questions, but if I see museums adopt a paid embers-only section, I’ll remember I saw it here first!
August 9th, 2006 08:31
I really like the thinking here, but it is a brain teaser to parce out. Great content/services such as podcasts, blogs, exclusive content, video on demand would obviously be the way to go, but the membership/pay per use model doesn’y jive with the “free”culture of the net or new Web 2 idealogy. Adds or google ad-sense style revenue which is the buisness model that drives some of the best “content” is obviously out for non-profits and the grants/sponsorship model is sort of anti the point of this post. Maybe a industry wide deal with a google to create non-profit friendly google ad-sense or “net membership” that would allow access to all participating institution websites/content? Just thinking aloud. I think this is a vital and exciting conversation.
August 9th, 2006 09:02
I agree that there’s value that people would pay for that we can deliver on our websites and via email, podcasts, photocasts, text messages, etc. I think the trick for us will be packaging these benefits and effectively communicating them to the world. Another hurdle is the human toll – how do we make room in our work-day and our budgets to accomodate these initiatives. The logical answer to me is a devoted staff person who is strictly eMemberships and eMarketing – someone who is free to pursue these concepts and goals without traditional hoops to jump through. My final thought is that our core missions and visions ARE the value. When we can deliver director’s tours via video podcast, when we can do educational outreach in a text message, when we can stream an artist talk on the web and allow for live questions – when we can do these things, we are really doing our job in the age we live in – and that’s worth paying for.
August 9th, 2006 01:35
I’m not sure I completely agree with the for-profit world and proximity. What of clubs, restaurants, etc? Surely these are for-profit yet require proximity to be successful. Even sports teams have a proximity to them, although with revenue sharing (like in the NFL) proximity becomes less of a concern. I’m not sure how many museums would want to band together a collective barganing agreement, or decide to franchise thier mueseum like some fast foot joint.
As you move into the digital world, the problem I think becomes one of competition, not among museums but among other more well established entities online. Amazon will most likely sell most of the books and items from your store. Wikipedia will have a lot of info on a variety of topics you could have had on your website (and for free).
Obviously, any museum can get more specific and niche with their product or information offerings (the Long Tail as they call it). But here the question becomes, is there the demand for it, especially the demand to *pay* for it? We talk a lot about high traffic on our websites, but less about the quality of the visits compared to quantity. I think the question should be *why* are people visiting your website, not just how many. The reasons why do not always translate into financial opportunites for online content or apps simply because the demand for premium content usually doesn’t justify the expense to build and maintain a system for content delivery.
August 9th, 2006 02:27
I’m not sure clubs and restaurants are good examples. A large chunk of revenue for NFL clubs comes from media distribution, use-of-name marketing deals and a cut from player sponsorship. However there are some interesting comparisons within there models. Restaurants are…. well, they’re different.
The closest model I have managed to come up with is the movie theater which absolutely depends on proximity. Their trick is multiple daily visits and a total ‘refresh of content’ sometimes as often as weekly.
I absolutely agree with you on the question of *why* people are visiting your website, because that will inform what the ‘product’ is.
August 9th, 2006 02:46
I think museums as content providers could compete and survive in a world full of content and enact creative digital extensions of their individual missions. But I agree that how this translates into revenue is difficult. Increasingly the most creative content on the web is given away and many “for pay” models and premium memberships have failed or lag in popularity.
I guess my public thought about some non-profit google ad-sense model would not involve revenue sharing, it would be google (or other company) creating revenue producing ads/click through that meshed with non-profit rules and codes that then be added to websites and content to help cover costs. Again just a public musing.
It seems to me that the itunes model relies on offering a cheap, safe and quality controlled for pay option to what you could get for free but for more hassle, danger and less quality.
For me, and I must preface this by saying I am a museum educator, I see education/public programming departments as those who can best solve some of these issues. k-12 education due to NCLB/testing is becoming less engaging, project oriented and inquiry based and thus demand/niche that can be filled. This audience may be willing to pay. College partnerships, continuing adult ed organizations may be willing to pay. Also education programs/content/innovation draws funding/grant and donation money so maybe having an education based website/content could be the honey for more funding.
One last thought may be the value added approach. Perhaps turnstile entrance fees/ticket stubbs could include passwords to unlock online content extensions and/or downloads, same with online retail purchases.
Whatever the answers/issues are this is a constructive conversation, Thanks Nik
December 8th, 2007 02:00
Actually, we are considering exactly this type venue as opposed to a physical facility right now. We feel that our subject is restricted enough, (and based upon questions which we get daily via the internet) of interest enough that since there is not any “comprehensive” look at our subject availiable on the internet, that this actually may increase visitation, (virtual of course….) and allow us to be more creative in our presentations. Consider the following:
Uniforms and weapons used often transit several periods or events. As a conventional museum we are restricted to either using one of an item, OR maintaining several with the attached conservation and cost issues. By presenting in a virtual venue, we could use a single item several times. Also, our subject is of global interest, and this would allow a much larger access to our collections, with the added funds “back” that we are not getting at this time. Staffing costs, facility maintenance, and basic operating costs/manhours leave the equation allowing more money to be spent on conservation and presentation alone. Also, this venue is not “time restricted” for a small museum staff.
Collections and archives may still be made available for serious researchers on site, and the addition to the collection of a new significant item does not require a major restructuring of the display to incorporate, it just drops in. Details that often cannot be presented in a walk in facility may in this type of museum. We shall see.