Where should museums get their money from? The sustainability of museums post-Covid

A museum is a nonprofit institution serving society. We know this because that is how the definition of “museum” still reads, the one that has recently been questioned and is still being debated (or so it would seem). Should we therefore stop here?

Yes! Museums are nonprofit organizations, and even their cafeterias help them raise the funds that museums need to work and support their programming. Their bookshops (there are even more than one in the larger museums and they are located at strategic points in the building) sell exclusive products, displayed for them to buy. Blockbuster exhibitions generate much-needed revenue to support acquisitions and publicity-all this in good faith and knowing all too well that museums are, by definition, nonprofit institutions. There is more. Sheltered by the nonprofit umbrella, museum restaurants and cafes operate on profit margins, experiment with new products to increase revenues, and operate more or less like businesses. In most cases, this revenue-generating infrastructure is in addition to museum ticketing policies, staggered on the basis of age groups and various categories.

Covid-19 has thrown this business model, which is nothing less than a paradox, into disarray.

An institution that, on the one hand, serves society, on the other hand, in order to sustain its nature and ambitions as a nonprofit institution, is forced to make a profit from its services. If we are to judge museums from the point of view of business model, regardless of whether it is an institution that has no revenue or a museum subtly presented as a profit-making brand , the museum institution of the 21st century faces shortcomings in diversifying its business. While the institute tries to make sure that its business remains nonprofit, paradoxically it has created funding models that overwhelmingly concern only one aspect of its activities, the physical and visitor-centered one.

It seems, however, that there are alternatives to be explored, some of which have been tried and tested over the past decade. Two of these have the potential to become trends in the not too distant future. The third is a challenge for many, as well as an ambition for others. But there is certainly much more.

Ph. Credit Kevin Dellandrea

The pay-per-use

The month-to-month subscription economy includes products like Netflix and Spotify, but very few museums. Which institutions are adopting it?

Before the Covid-19 pandemic took us all by surprise, the Westerbug Museum in Bremen, Germany, had experimented with a pay-per-use approach to its ticketing. With a full ticket covering a route of about 90 minutes, the museum tried a system based on 10-minute slots that could be paid for one-ninth of the full ticket.

The pay-per-use model put the museum in a position to cater to an audience with less time or interested in only one aspect of the museum experience. Early reactions to this scheme suggest that museum audiences considered it fair and more user-friendly. In addition, visitation has increased substantially, which has offset the decrease in the average ticket cost paid by visitors. The museum’s director, Tom Schoessler, says that “many people liked the experiment, approached it with a lighthearted approach, and liked the fact that they had control over the price, without the risk of losing anything if we take full prices as a comparison.”

The idea behind this model has a context to consider. Pay-per-use is based on good quality products, self-confidence and customer empowerment. To make a long story short, we could summarize this business model like this, “hey, we have a good quality product and we are confident enough to propose it. You are free not to pay for it if you don’t try what we are telling you you will try.” This model works best when museum audiences have a very personal relationship with the institution, so you have to increase your relevance in order to sustain it. What in fact may determine the success or failure of this model is the lack or presence of a loyal audience.

This is an idea that has been around for at least a decade, and its origins can be traced back to a study published in 2010 by economists Bruno S. Frey and Lasse Steiner. It has since been experimented with by various cultural institutions, for example, theaters. Zoos have also experimented with pay-per-use for some time. It is definitely a funding model to be explored further.

Ph. Credit Ibrahim Rifat

Provision of expert services

Museums often tend to forget the potential value of the knowledge, know-how, resources and expertise they have or employ. In fact, these resources have much more potential than what lies in their importance to the traditional museum idea. Are there reasons to explore this potential more deeply? I think so.

Covid-19 has acted as a catalyst in this regard. Cuseum’s Brendan Ciecko lists some cases, such as the online cooking classes at the National Czech & Slovak Museum & Library, the Carnegie Museum in Pittsburgh, and the Cummer Museum. The Seattle Museum of Art offers a series of online members-only meetings with its visitors every two weeks, theAsheville Art Museum provides online classes for adults, and so does Cultivating Digital Photography Skills.

But it is especially the Van Gogh Museum’s initiative that I think has the most potential at this moment in history. The museum’s professional services program targets a clientele of private collectors and entrepreneurs, to whom it provides advice and support on issues such as collecting, conservation and preservation, installation of climate control systems, museum management, and development of educational programs. This support and advice program should be implemented with in-house expertise.

There is a matching of supply and demand behind this, which is also the rationale behind similar initiatives, such as those pioneered by the Indianapolis Museum of Art, which has launched a software development firm that produces custom programs, websites, and open source projects, and by the Toledo Museum of Art and its Center for Visual Expertise, which provides a wide range of services.

By broadening the diversification of services, and reaching out to new potential clients, museums can become more financially resilient. Much can be achieved simply by repositioning their resources to meet the needs of previously unreached customer categories.

Ph. Credit Markus Winkler

What can we say instead about predictive content?

A few weeks ago the New York Times published an editorial titled Museums need to press the reset button and become more radical ( “Museums need to press the reset button and become more radical”). There is very little that is radical about the resource generation models we have discussed so far. Much of what we have discussed falls under the umbrella of diversification of the core business , especially if we think about when we talked about alternative clientele for museum expertise. Pay-per-use is based on what is generally described as “mass personalization.” But what could we say about predictive content?

Predictive content is a marketing technique that combines the flexibility and customization of tailored products with the low costs associated with mass production. When viewed from this perspective, pay-per-use could be personalized with tailored visits that can provide educational and experiential content based on the individual visitor’s cognitive background. We could imagine a personalized pay-per-use visit centered around a pivotal element of the museum experience, packaged in visits lasting ten minutes or more. The best analogy that comes to mind is reading a book. For my part, I rarely read a book in its entirety at once. Instead, I read one chapter at a time, and often read more than one book at once. I would not buy a book if I had an obligation to read it in its entirety at once. Nor have I ever felt the need to do so.

Therefore, museums need to fully explore the potential of predictive content by personalizing the experience for each individual visitor, whether it is a physical visit, an online visit, or a combined visit. By personalizing museum content through media, whether physical or virtual, museums could more comfortably address the question “where should the money come from?”

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