Digital R&D fund for the arts
Digital business models
Podcast 6 transcript
John Wilson:
Hello and welcome to the sixth and final podcast in this series by Arts Council England,
looking at key digital topics brought to light by the Digital R&D Fund for the Arts. That’s
the £7 million investment in digital projects across the Arts sector, delivered by Arts
Council England, NESTA, and the Arts and Humanities Research Council in
partnership.
This final programme is about digital business models, within arts and cultural
organisations. They’ve had to move with the times and change their ways since the
digital revolution.
In this podcast we’ll be looking at many aspects of business models, including how an
organisation called Digital Theatre is increasing audiences through its business model.
Andrew Girvan:
There are three products at different price points, with the 48-hour rents being the
cheapest. We then also follow a film model, where the most recent productions start at
the highest price and then degrade over time. It’s been proven that if you present quality
content then people are willing to pay for it.
John Wilson:
We look at the possible impact of crowdfunding arts projects:
Yancey Strickler:
Kickstarter opened up to projects in the UK on Halloween. The first three weeks have
been great: there’ve been about 300 projects that have launched so far. There’s already
been over £1 million pledged to projects in the UK.
John Wilson:
And the BFI’s take on how digital technology can bring in revenue:
Richard Ayers:
What we’re talking about here is building products that have a longer-term value, and
therefore they will take more care and curation, they’ll take more time and effort and
they will also yield a much greater value.
John Wilson:
First my guests on the programme today, joining me here in the studio, are: the
journalist, Patrick Hussey, who writes about digital technology business in the Arts;
Simon Tanner, who’s the Director of Digital Consultancy Services at King’s College
London; and Peter Tullin, from the online retailers CultureLabel, which specialises in
selling arts and cultural gifts. That’s right, Peter, yes?
Peter Tullin:
Yes, CultureLabel is one of those very simple ideas. We’re basically selling art and
products from some of the world’s great museums and galleries, so people like the
Tate, the V&A and the British Museum.
John Wilson:
Simon Tanner, you’re the Director of Digital Consultancy Services. You offer services
outside the organisation, do you?
Simon Tanner:
Yes, I’m both an academic at King’s College London, but I work mainly with museums,
libraries, archives, sometimes with media and publishing as well, to help them get the
most out of their digital content. Whether that’s just about reaching their audiences, or
whether that’s about thinking about how they can monetise that content as well.
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John Wilson:
Patrick Hussey, you’re writing about digital technology, so an ever-changing game.
Patrick Hussey:
Yes, I have to inspect my Twitter feed, every time I write a sentence. I worked for Arts
and Business for a couple of years, I started writing for The Guardian, about the
intersection of arts meets tech, and I now work for the lovely Aeon Magazine, which is a
new magazine, publishing a long form essay every day on arts, ideas and culture.
John Wilson:
Let’s start with the most fundamental issue in any business, how and what you’re going
to sell to your customers. One of the R&D Fund pilot projects undertaken by the London
Symphony Orchestra, created a new mobile app to help with their ticketing process. Jo
Johnson, Digital Marketing Manager at the LSO, and Nico Köpke, of the mobile
development agency, Kodime, told us about the project.
Nico Köpke:
Inside the app they see the listing, but also we use post notifications for new events.
They can browse the event, browse the information on the event, look at the map. They
have an audio preview; they can listen to a small sample of the performance.
On the evening of the show, the students will come to the ticketing desk and they’ll have
they’ll mobile phone with them, where the tickets that they’ve bought are stored. When
they come to the ticket desk, there’s a handheld scanner – it looks like a Tesco barcode
scanner – attached to a computer.
It actually scans the ticket code and says ‘This is a valid ticket; it is valid for tonight.’
Then she redeems her tickets for the venue, so it’s a full chain of ticketing.
Jo Johnson:
It has a loyalty scheme built into it, so that they can gain points for doing certain actions:
buying a ticket, sharing it, trying to encourage other people to come, bringing their
friends. The person who’s got the most points, we reward with a trip to Paris with the
LSO on tour.
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Audience member:
It’s very convenient that I don’t need to go print it, and I can just show my smartphone
when entering.
Audience member:
It’s very nice, it’s a very modern way of getting a ticket.
Audience member:
I felt it was very convenient, although when I reached the payment stage, I could only
choose… I think it was PayPal, and I couldn’t change it to another payment method.
Nico Köpke:
I think that the interesting thing for us in the arts sector is the arts sector has to really
think about the audience and audience engagement. The Arts also by nature is ready to
explore things and do innovative new things, like this project.
Jo Johnson:
It could work for pretty much anyone. We think any art form would be particularly good
for museums and art galleries. There’s new technology coming out, the near field
communication, where they swipe the phone on the way in and it pays for it in the
phone.
Nico Köpke:
The next exciting phase is, I think, is to completely drop the paper side of things and go
purely mobile, purely digital. That’ll be a big change.
John Wilson:
Nico Köpke from Kodime, and JoJohnson from the LSO, talking about mobile ticketing
apps there. Nico was talking about the completely paperless ticketing model. Simon
Tanner, you’re a digital consultant; we’ve seen the commercial sector embracing this
sort of thing, but is the arts and cultural sector ready for it, do you think?
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Simon Tanner:
I think the arts and cultural sector is ready for it, because in a sense, all we’re really
doing is transferring an old business model into a new technology. Using the new
technology to get efficiency and effectiveness gains, which is going to allow those
markets to be expanded; for them to have different ways of reaching into the markets.
It’s a straightforward switch from standard ticketing activities, or standard shop type
activities that they’ve been doing, into a new medium, with additional added value on
top of it.
John Wilson:
We’re going to see the end of tickets at some point then, are we, paid for tickets?
Simon Tanner:
I’m not sure if we’ll see the end of paper tickets, just in the way we haven’t seen the end
of paper money, but we will see a great reduction in paper tickets.
John Wilson:
Patrick?
Patrick Hussey:
I think what you need for a ticketing thing like this is to mimic the actions of what they
call a ‘social reader’. You’re selling tickets, someone buys it, they’re only logged in
through some sort of social API to Facebook, and it tells their friends, ‘I just bought a
ticket.’
John Wilson:
Simon says he doesn’t see the end of paper ticketing; do you then?
Patrick Hussey:
Yes, I do see the end of paper, and probably quite soon we’ll be able to buy tickets with
our eyeballs. Let’s not go there yet.
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John Wilson:
Let’s turn to another method of selling that arts and cultural organisations have been
experimenting with over recent years, the online shop. Josh Greenberg, Account
Manager for Arts and Culture at The OTHER Media – a digital agency based in London,
which has developed e-commerce websites for the Natural History Museum and the
Royal Academy of Arts – tells us about key points to bear in mind, when setting up
online shops.
Josh Greenberg:
Identifying the business goals is very important. What do you want to do, the business’
expectations in an online shop? There’s also a question about the range that’s being
sold online.
Then you need to look at the users. What are the users going to want from the site?
How are they going to move through it? How do you want them to move through it?
How psychologically you want to influence the user when they visit, and what makes
their life easier? What makes it more likely for them to purchase?
All of this needs to be taken into consideration, so the user experience, also the design,
which go together, and then the platform that it’s built on. It depends on how complex
you want the shop to be; how many products you’re going to offer, how it fits into your
other back-end systems, which is the complex part.
If you use systems like Raiser’s Edge and Patronage for membership, and so on and so
forth, how are they going to work together? Are you going to sell that through the shop?
There’s a lot to think about.
John Wilson:
Josh Greenberg, from The OTHER Media. Peter Tullin, you co-founded CultureLabel,
an online shop of sorts. You’re working with other cultural organisations and selling their
products online, aren’t you?
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Josh Greenberg:
Absolutely. We would sell, for example, you probably don’t know this, but you could pick
up a limited edition by a Turner prize-winning artist for a couple of hundred pounds.
That was the inspiration behind the idea.
We heard this amazing stat, where IKEA’s one of the world’s biggest sellers of art.
Maybe you pay £50 for your IKEA wall art, and for not much more actually, you can buy
something which is very collectable, personal, inspirational.
We would basically do the simple job which the internet does very well, which is to
aggregate these things into a single place.
John Wilson:
The unique selling point is that you are working directly with those galleries or those arts
centres, those arts organisations, and asking for their input. As you say, what is on
show, on sale on the website is curated, in the same way that the gallery space is.
Josh Greenberg:
Yes, absolutely. In a sense, CultureLabel is curating the site as a whole, but each
individual partner is selecting the things that they think are going to work for the
audience.
John Wilson:
Simon Tanner is this the sort of thing that arts organisations, if they’re not involved in
selling their wares at the moment, increasingly they’re going to have to think about this
sort of way of monetising their assets?
Simon Tanner:
Yes, they really do, because actually it’s what the public want. In a strange way, there’s
an element here of us expecting as much art to be as freely available as possible, as
much culture as freely available as possible. At the same time, there’s this premium
product which we want to buy, where want to own it; we don’t just want to be able to see
it.
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There’s all this content which should be available through the websites. But at the point
when I’m looking at that, I want to have as low friction as possible between me looking
at that item on a website, and saying, ‘I want to own it. I want to have a copy of that. I
want it on a T-shirt; I want it on a mug. I want to be able to send it to friends, I want to
be able to engage with it and buy it.’
There’s an awful lot of cultural content which is not visible at the moment. If we can
make it visible through digital means, then we can actually monetise it in various ways.
John Wilson:
How far down the road are they? Most organisations at the moment are, what, just
dipping their toe in the water?
Simon Tanner:
It depends, there’s a real range. You have organisations such as the Tate, the V&A,
those sorts of organisations, which are highly developed business models that they’re
working with.
The Victoria and Albert, for instance, is giving away 28,000 images from their collection
for academic use, to be used in printing in those sorts of areas, and is looking at that
from the perspective of saying, ‘We’re making money out of commercial licensing, and
doing a lot of commercial licensing. We’ll carry on putting our efforts there.’
We’re really looking at the shop front aspects, to make these beautiful objects, which
are available in the V&A’s collection, both available to be bought as physical things, but
also that the images are being accessed. Sound and video is being accessed and being
monetised alongside that.
John Wilson:
Still on the subject of selling, let’s look at pay-per-view, and the opportunities for
downloading or streaming arts events. Including theatre, opera and concerts onto your
laptop, or mobile, or via smart TV, allowing you to watch and listen in your own time, in
your own place. Those are all becoming increasingly available.
The organisation, Digital Theatre, works with several theatre companies, to provide
recording and post-production services, making footage available to a worldwide
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audience. Sales and Marketing Manager, Andrew Girvan, and New Business
Consultant, Rachael Castell, explain their business model.
Rachael Castell:
For anyone who loves theatre, it’s not always easy to access. It’s not always
geographically easy or financially easy to access. Particularly for anyone who’s
passionate about seeing everything, it’s difficult to keep up.
Andrew Girvan:
You would come to ditigaltheatre.com in the first instance. You can watch trailers for all
of our productions. There are three products at different price points, with the 48-hour
rents being the cheapest, but we then also would follow a film model, where the most
recent productions start at the highest price and then degrade over time.
Once you have purchased a production with a rent, you would watch it online. With the
download to own, we have a proprietary player, which you download, which is like the
iPlayer app and to your desktop.
The Samsung Smart TV app that we’ve just launched, to be able to watch it on your TV,
you would go to ‘ditigaltheatre.com’, where you generate your redemption code. You get
your Digital Theatre app on your TV, and you type the four digits in, and your
production’s there to watch on your TV, for 48 hours.
Racheal Castell:
I certainly think that the alternative content model has legs. Event cinema is a big thing.
I think that we’re part of that process. It’s about using technology to open doors and give
people an access point. Then encouraging people to get together, and do things
together, and watch theatre, and celebrate theatre.
Andrew Girvan:
I think across a number of mediums, not just the one that we’re working in, it’s been
proven that if you present quality content, then people are willing to pay for it. If you look
at developments with things like iTunes and Amazon with the instant downloads, with
eBooks, for instance, if you make it easy enough for people, then people are more than
willing to pay for stuff.
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John Wilson:
Andrew Girvan and Rachael Castell, from Digital Theatre, on their uses of digital
technology to generate revenue. From what we’ve heard there, opportunity is for digital
business models, but what about the investment that’s needed to put these tools, these
systems in place? Patrick Hussey, it can be an expensive business, can’t it?
Patrick Hussey:
I’m going to go as far as to say that this is impossible for medium to small sized people,
if you want to digitise and televise, in a sense, your content. I’m going to quote Rachael
Caldecott, formerly of the Royal Opera House, who said, ‘You can’t point a flip-cam at
Carmen.’ You really can’t do that.
John Wilson:
It just doesn’t do it justice.
Patrick Hussey:
That’s not going to work. I’ve thought about this a lot. I think what you need here and
with so many things, digital works at scale, so you have to become the Netflix of theatre.
You need kind of a tragedy of the commons, essentially, and you need a digital layer on
top of it, sucking in everyone’s content. Content’s really hard.
Also, if you’re going to get to the kind of enormous audiences you need to generate
money, you’re going to have to have content coming from all sorts of sources. We’re
already seeing a lot of collaborative working.
The ‘Google Art Project’ is an example where they’ve been able to get all of these
museums to offer their content. It’s seen on the Google Art Project and it’s visible there,
but there’s no financial model that’s underpinning that, in terms of those museums
putting their content out there.
We’re seeing the same thing with other cultural organisations. There’s always this
question of who will pay and what are they willing to pay for? With culture, I think we
trade in a much more sophisticated way than just financial transactions, but it’s quite
difficult for these organisations to monetise that, if you’re not in the top sphere of these
organisations.
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John Wilson:
While we’re talking about audiences, I’d like to move this discussion on to how digital
tracking can help you understand audience behaviour. The British Film Institute
published its five year plan in October, with digital technology at its heart.
The organisation is using digital technology to help understand its audience better.
Richard Ayers, the Head of Digital Business Development at the BFI, explains more.
Richard Ayers:
I’m always minded of the fact that relative to putting a billboard advert up, or taking out
an advert in a magazine or a newspaper, or even putting something on the radio,
internet stuff, digital stuff is always way more measureable than any of those things.
For example, you can put tracking codes on. Fundamentally, there are always three
things around digital that you look for: reach, retention, and revenue. Any one of those
you’re going to want to be able to track.
We do some quite detailed analysis of the traffic flows that happen on a website, for
example. We know that X amount of people hit the home page and, of course, we can
see from Google Analytics the pull-through effect that there is into the CRM sections of
the site, and then into the e-commerce where we’re selling tickets or selling
merchandise.
The best understanding you’ve got for your audience is when they buy something,
because that’s the point when they have to put in credit card details. You can crossmatch that and have a much greater understanding about who they are.
But there is a certain amount of profiling. For example, inside Facebook we have a very
good understanding of the kind of audience who engage with us on Facebook. It’s not
the whole audience, but in terms of their Facebook integration, we know the split of
male and female. We know the age ranges; we know the kinds of things that they like
more.
You can tell the same these days through Twitter as well. You have to be very careful in
terms of audience segmentation. There’s sort of real-world segmentation; there’s the
people who go to the South Bank, there’s the people who are the members, there’s the
people who perhaps subscribe to ‘Sight and Sound’ magazine.
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Then there’s their digital versions of themselves, because a lot of people, they behave
very differently online than they might do when they’re buying a magazine.
Understanding their digital behaviours is a distinct piece of work.
That’s something that we spent some time doing, in terms of running the analytics and
doing the market research, to be able to really understand what’s going on there. What
they want to have with a digital experience from the BFI, compared to what they want
out of us on the South Bank.
John Wilson:
Richard Ayers of the BFI. Simon, we heard Richard there talking about the use of digital
technology to get a real understanding of the audience, in terms of their habits, their
buying power, what they’re doing, where they’re visiting.
That is what you need to know then, is it, when you’re developing a business model in
the arts sector these days?
Simon Tanner:
Yes, I think there are two things going on there. One is an engagement with what we
might call the ‘attention economy’. How do we get people to attend to us, to our
products, to our resources that are out there? Going in straight away and saying ‘buy
something,’ is not necessarily the most important thing here. It’s about gaining people’s
attention and making them want to stay and be part of your community, in that sense.
John Wilson:
It’s about gaining trust as well, isn’t it?
Simon Tanner:
Gaining their trust, that’s it.
John Wilson:
Trust in an organisation, feeling part of it.
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Simon Tanner:
This is one of the things that cultural organisations generally have is that they start off
often with quite a high level of trust. You don’t want to throw away that authenticity and
validity that comes with being the place that is the expert, in whatever the thing you’re
an expert in.
Particularly with the BFI, where you’re talking about a niche element of that very big
media market that they’re engaged with, the thing that they have is a high level of
excellence.
You put that together with the second element, which is the tracking aspect, and the
sophistication that can be brought to that, and suddenly you have the opportunity to
engage with people, when they’re willing to make changes in their shopping behaviours.
There’s been a lot of work done on this in the States. For instance, Target have done an
incredible level of research which allows them, through the shopping behaviours, to
work out when their clients are pregnant. They can often know when their clients are
pregnant, several weeks before the other family members.
John Wilson:
This is getting sinister though, isn’t it?
Simon Tanner:
No, it can get quite sinister, especially when you send them vouchers to encourage
them to come shop at your shop, and the other family members don’t know. One has to
be very careful about what tracking means, and where it engages, and how far it goes.
Tracking only really works if you’ve got volume. If you’ve only got a very small number
of people, either you might be just as well doing a focus group, or some sort of feedback
survey to get information from them.
It works when you’ve got very large groups of people, with big aggregations, which
allow you to see how big flows of activity are going. Otherwise, it could be quite easy to
get misled by the information that’s being provided to you.
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John Wilson:
Let’s move on. The BFI, the organisation we were talking about, also plans to fully
launch ‘BFI Player’ by the end of 2013. That’s an internet based system, giving access
to thousands of films in the British Film Institute archives and additional, exclusive
content.
The BFI Player is currently only available on Samsung Smart TV, but this may prove
another way of generating revenue. Richard Ayers again:
Richard Ayers:
The BFI Player is one of the key strands for us in our five year plan. Really at the
moment, it’s conceptual. There’s only one live version; that’s our first go on the
Samsung Smart TV platform.
Over the course of the next year to 18 months, we’ll start to see more iterations, more
technology brought into this BFI player. It will start to exist on different platforms that I
hope will include some exciting developments we’re working on, doing things on mobile,
that include mobile and TV, connected TV combinations.
In terms of the customer experience and, indeed, the ability to be able to watch things
with the BFI player, we’ve got a starter for 10, which at the moment is, if you’ve got a
Samsung Smart TV, it’s free to air. You can watch it; there’s no cost at all.
In the future, might there be a cost? I guess there could be. That is certainly not fixed at
the moment. We’ve got a team working on the business plan and the business
modelling. Of course, one of the most difficult things is you can’t plan too far ahead in
the future, because things move so fast.
Being able to work with Samsung has helped us usually to be able to be a little bolder,
and use some of those skills and expertise that we’ve got, and apply them to this new
territory, and indeed see it be successful.
John Wilson:
It’s that partnership with Samsung that’s been the key to the BFI getting BFI player up
and running. Is that vital then?
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Simon Tanner:
Yes, I would say. I guess this depends on which stage you’re at. We’ve talked about
how some of this perhaps isn’t always on the table for the smaller and medium sized
organisations.
We talked about e-ticketing earlier, but it’s perfectly possible to use tools like Eventbrite,
for example, where there are no upfront costs. You’re paying a percentage, obviously,
of the ticket price to Eventbrite for that service, but effectively that allows you to have
the technology for free.
It also utilises a lot of the things that Patrick’s talked about, in terms of social. When
someone buys a ticket, you’ve got the ability to share it. That’s in-built, because their
ticketing specialists and that’s their particular business model.
We heard the BFI talk about where it might go. You could imagine a situation where,
actually, if I’m on a train and I want to access that on my phone and be able to use that
type of technology, rather than watch it through my Samsung Smart TV, then I don’t
mind paying a little bit more, because actually, I’m getting access to the content that I
want, in a convenient form.
John Wilson:
Let’s move on again and to the subject of donations now, giving money not just to arts
organisations, but directly to individual artists, maybe. A new funding scheme which will
launch in the spring of 2013 is hoping to be at the forefront of digital giving, using mobile
technology as its primary channel.
The ‘National Funding Scheme’ is aiming to raise new funds for the arts and cultural
sector, through mass giving from the public, through SMS text, interactive voice
response, near field communication and of course apps.
William Makower, the founder of the National Funding Scheme, explains that donation
is about maximising what he calls ‘The moment of impact for potential donors.’
William Makower:
That might mean in the theatre, in the foyer. It might mean in front of the picture, it might
mean when you’re walking the National Trail, or in front of the stain glass window. But
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that is the moment at which you need to make the ask, and you have to make it easy for
people to give.
Because if you wait for them to get home and log on, and by that stage they’re feeding
the cat or putting the children to bed, the moment of impact has gone.
John Wilson:
The National Funding Scheme will also collect donor data, to help fundraising and
development departments to work in smarter ways.
William Makower:
By having a national scheme, we’ll be able to look at patterns of behaviour of individuals
and of groups. That insight will allow us to perhaps change the behaviour of marketing,
and what are called ‘developmental fundraising’ departments inside arts, cultural,
heritage institutions, which at the moment are mainly focused on high network,
individual gifts and Government funding.
Once we’re able to provide them with the data of who has given the money, then they
will become marketeers, in the sense as everyone else understands marketing. Talking
to individuals and groups, we’re encouraging them to become friends, legatees
perhaps, trustees perhaps, participants in their art form.
John Wilson:
William Makower, on the model of the forthcoming National Funding Scheme. Patrick
Hussey, there he’s talking about the ability to buy data on donor behaviour. That’s, I
suppose, valuable intelligence, isn’t it?
Patrick Hussey:
Yes, this is where this stuff gets very deep. You could potentially track a donor over the
course of their entire lifetime. Data also gets really interesting when you link it. Perhaps
if you linked it to, say, if you worked with LinkedIn, and suddenly a little blip went off
when these people have just become a Vice President somewhere, that’s the point that
you want to start talking to them.
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John Wilson:
They’ve had a massive pay rise suddenly.
Patrick Hussey:
Exactly.
John Wilson:
Chat them up for a donation.
Patrick Hussey:
Yes. There are fascinating databases, systems in place, like Raiser’s Edge, that track
where you put which person sits next to which person at your fundraising dinners. You
get this incredible 360 picture. If you add the real-time data, probably from another
source, like LinkedIn, you’re going to get some pretty amazing, Orwellian, gorgeous
data going on. That’s probably why it has to be a national system.
John Wilson:
Simon?
Simon Tanner:
There are three main motivations for giving money: the ‘ICE’: It’s ideology, conscience,
and ego. Like this, ‘I believe in what you’re doing. I feel guilty about being so wealthy. I
like to be loved.’ Any sort of donation has the elements around that.
John Wilson:
The idea of the National Funding Scheme is that you can donate directly to a specified,
to a prescribed organisation. You’re not just giving it to a central organisation who will
then pass that on, on your behalf.
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Simon Tanner:
Yes, so there’s that reflection back on what I believe in, or what I want to feel good
about, what I want to be able to tell other people, ‘I’ve done a good thing, in relation
to…’. The digital opens up more avenues to reach out to those donors, and to have that
reflective relationship.
John Wilson:
Let’s look at a different, though related donation model. That’s crowdfunding. The
concept invites your audience not just to donate, but to invest in your business or idea.
This month sees the UK launch of the crowdfunding website ‘Kickstarter’, which has
been around for just over three and a half years in the States. Kickstarter’s Head of
Community and its co-founder, Yancey Strickler, explains more about the organisation’s
model.
Yancey Strickler :
At Kickstarter, every project sets its funding goal and a funding deadline. The way it
works is that if a project successfully reaches its goal by its deadline, then all of its
backers are charged, and the creator gets their money, and they go off to make their
project. If they come up short of their funding goal, then no money changes hands, and
everyone just walks away as if nothing happened.
It’s also rallying people around an idea. ‘Hey, you think this is cool. Great, help us make
it.’ If not everyone agrees, then it won’t happen, so everyone’s motivated to get involved
and to really spread the word.
Arts funding is dwindling and there are cutbacks all over the place. It’s really
encouraging. It shows that people really do appreciate the Arts, care about the Arts
They’re willing to spend money, to make sure that they continue to be an integral part of
our society.
What these projects are offering is it’s a sense of belonging; it’s an emotional ownership
of this work. Not only can you love the book, or the graphic novel, or the work of art, you
also have bragging rights of being one of the people who helped bring it into existence.
There are project videos, there are rewards that people offer for backers to get things in
return and there are also project updates. I think all this together makes this kind of
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intoxicating mix of a story that we’re all invited to become a part of, and have a real
impact on.
John Wilson:
Yancey Strickler, the co-founder of Kickstarter, there talking about one of the benefits
being not just, as an organisation, not just getting money from donors, but forging or
creating some kind of direct relationship. Those people are investing in those
organisations directly.
Peter Tullin:
I think what’s interesting about Kickstarter, and yes, there is that goodwill of giving, and
supporting the story and everything else, but it allows you to get very close to
something. It does become transactional with the people that are passionate about what
you do.
Some of the most successful projects are actually sometimes even overtly commercial.
If you look at some of the million plus donations that they’ve managed to achieve, which
are around things like computer gaming. Effectively, what people are getting back in
return for that is a first copy of the game, lunch with one of the founders.
Actually, some of the Arts projects have followed the same model. It’s a chance to get
close to the process, to get close to the product. Donation, in some ways, at Kickstarter,
for me, is a little bit misleading. Where it gets interesting is around the transaction.
The organisations that do very well are the ones that are most creative about the
rewards that they give back, as well as, obviously, having a great project in the first
place.
John Wilson:
Patrick, which projects have been particularly successful at crowdfunding?
Patrick Hussey:
There’s an interesting one at Spacehive, called the Queen’s Head. What happened was
they just needed to raise a small amount of money for it. It was almost sort of a protest
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regatta on Jubilee day, where they floated a massive papier-mâché Queen’s head down
the Regent’s Canal in London.
I think that’s really interesting, because that’s satirical, that’s counter-cultural. Would
that have been founded by a public grant, in the Jub-Olympic year? I don’t think so.
There may even be a counter-cultural element to crowdfunding, which I think is, again,
very important for the Arts.
John Wilson:
Let’s move on again, and to a different type of business model, specifically in the world
of music. The model around royalties for musicians has changed dramatically over the
last few years, since digital changed the way that music is bought and sold.
Many musicians now make their work directly available on sites such as SoundCloud or
iTunes. Some would say that ‘The role of the royalty collection organisation is no longer
central to a musician’s business.
Mark Lawrence, Director of Membership and Rights at the collection society, PRS for
Music, tells us about the opportunities and pitfalls in the new digital era.
Mark Lawrence:
It depends how you look at it. Has it created an opportunity, or has it created a threat?
You can start a career today by going into a recording studio and writing a song. Then if
you’re also the performer of the song and the artist, you can record it there and then
onto a computer, and you can get it on SoundCloud. You can effectively get a version of
a licence available, or certainly copyright protect it at that point.
You can then market yourself viciously through social media, from Twitter, to Facebook,
and anything else in between, and a reinvigorated MySpace. At which point, you’ve got
nowhere near a record label, you’ve got nowhere near a music publisher, and you’ve
got nowhere near a collection society.
I think it is conceivable that very clever artists can find a way through to their market,
without the big machine that’s always existed before. Therefore, that means that you
may not spend so much time writing and performing. It means your business might not
last very long.
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I guess that’s always the challenge of the music business. It’s kind of an oxymoron;
which is it going to be, the music or the business? Because it’s very hard for it to be
both. I think there are very few examples of someone who’s equally adept at spending
as much time effectively writing or performing, as they are at earning the money and
running the machine.
John Wilson:
Peter Tullin, I don’t think you sell music on your CultureLabel website, do you?
Peter Tullin:
Not yet.
John Wilson:
But the way that music and the music business has changed, the way that musicians
can deliver their product to people, that has been revolutionary. Can other art forms, do
you think, learn from that way, the way that they are circumventing the traditional, the
big record companies and the royalty collection agencies?
Peter Tullin:
Yes, I think there’s definitely a lesson in this for arts and culture. What’s fascinating here
is whereas some revenue streams might be slightly reduced, other ones have opened
up.
In music, obviously we had the big growth in live performance; people got very
passionate about the real thing. Actually, if you generate a huge audience through all of
these new channels, the corollary that was actually you could then use that audience,
and monetise it in a different way.
I think products are the other thing. As music’s become digital and less tangible, what’s
been fascinating, we work with a number of music photographers, who are from bands
actually as mainstream as Blur, to people like Storm Thorgerson, who did all those
iconic Pink Floyd and Led Zep covers.
Fans of his work or fans of the band are actually happy to spend £300/£400 on a limited
edition work, because that’s what they’re very passionate about. For each door that
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closes, the positive side of it is that the spin-off industries are coming out of that. You
can see arts and culture probably the same kind of models, I think.
John Wilson:
Simon?
Simon Tanner:
I think that’s a real problem for arts organisations in this area, because what you have is
commercial models which have a return on investment profile. Pound in, we get £1.25
back, we just do that lots of times, we’re winning.
A lot of the Arts is public sector funded, and it doesn’t matter if you get £1.25 back, you
don’t have the pound in the first place. The investment profile just isn’t there. You can
say, ‘I will get the money back. I will make a profit,’ as much as you like; you just won’t
get the additional money.
Or you have strange Cinderella type business models that operate in local government
where, because there is centralised funding for an arts organisation or an arts activity,
any money they make goes directly back to the central funding place, and doesn’t
necessarily come back to them as a reward for all their entrepreneurship. We never get
to see it to actually adapt, build and act in an entrepreneurial way.
John Wilson:
What’s the answer to that? Cutting some of the bureaucratic red tape then, or rethinking
the way that publically funded organisations are run or can be run?
Simon Tanner:
I think what you see is a number of publically funded organisations have set up
business entities that run alongside them, so that they can operate as businesses,
without impacting upon the core business of the cultural organisation, to do what they
want to do.
John Wilson:
In the same way that the BBC has its worldwide division.
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Simon Tanner:
Exactly the same, or the National Portrait Gallery has a picture library that sits alongside
it and does those sorts of transactions. In the same way, in some respects, that you
have the cafes and restaurants in many cultural organisations are outsourced activities.
John Wilson:
Looking back at all the aspects of digital technology for the Arts that we’ve explored
throughout this podcast series, one aspect keeps coming up that digital technology
should not be regarded as a quick fix. It requires investment, time, thought and
maintenance. Here’s Richard Ayers from the BFI again.
Richard Ayers:
Success of digital products is something that I think some people, they want overnight
success. I suppose the principle thing I would highlight is that digital products are not
campaigns.
Products themselves need to have long-lasting value that work for the user and, indeed,
work for the organisation. Therefore, you need to put them out in the world, and work on
them, and develop them, and change them, and iterate them, so that they can adapt to
what the audience needs and what the business models require.
Over the period of time then, you sort of maximise the value out of them. It’s not so
much a question that you develop a campaign as if it was like a marketing campaign.
You develop a campaign, you put it out, you run it for X period of time, and at the end,
you say, ‘Yes, success or not.’
Whereas, what we’re talking about here is building products that have a longer-term
value, and therefore they will take more care and curation. They’ll take more time and
effort, and they will also yield a much greater value as a result of that.
John Wilson:
For the final time in this series, let’s do some all-important crystal ball gazing. What
digital developments might be on the horizon that might provide new commercial
opportunities for cultural businesses? Peter Tullin, let me put you on the spot first of all.
It might be something that’s not even invented yet, but which might be invented in the
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next few years, that would help cultural organisations maximise their commercial
potential.
Peter Tullin:
First thing is it’s definitely exciting times ahead, because people are into this stuff. I think
that’s the most important thing. There is a huge audience for what we do in the cultural
sector.
I think some of the biggest innovations might actually come from the outside in, because
just look down the road from here and what’s happening in Silicon Roundabout. There
are incredible technologies and companies that are being created.
I think when you take some of that innovation, and you connect that with the right
cultural content and the right cultural brands, again if you want to call them that, then
actually exciting things can happen.
To give you an example, there’s one company which I’m a huge fan of at the moment,
called Retronaut. Basically, this takes effectively archival images. They send time
capsules of five images a day, which could be David Bowie playing ping-pong in the
‘70s, to an industrial scene.
It’s just one of those that’s made for the new media age, where people look out for
these emails that they get once a day. It’s now got hundreds and hundreds of
thousands of people viewing these emails and going to these pages.
It’s archives; it’s just archives packaged in a slightly different way. It’s a revenue model
which is ad funded. But also, if you take those images, you produce them as things like
limited editions, there are all sorts of income streams that come off the side of that.
John Wilson:
Simon Tanner, gaze into your crystal ball, if you would.
Simon Tanner:
Yes, this is a very dangerous thing to do, because I’m bound to be wrong, almost before
I finish talking about it actually, like this. For me, the gaming industry and visualisation is
a massive industry for us in the UK. We need to support it and keep looking to that as
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being a real opportunity going forward for the cultural sector, because I think that there
are just huge opportunities there.
I think there are two other commercial models which I quite like. One which almost
always seems to be the bridesmaid, never quite turn into the bride, which is
micropayments.
I think micropayments as a model could be really good for cultural organisations,
because it could have that opportunity of allowing people to just pay in very, very small
amounts for the things that they want, in that sense.
John Wilson:
Like what? Give us an example.
Simon Tanner:
Retronaut would be a very good example of something where I would quite happily pay
a penny a day for that, as opposed to having all the advertising around it, like this.
John Wilson:
And a series of random images from the archives arrive in your inbox every day?
Simon Tanner:
It’s absolutely wonderful. I have to tell you, it’s one of my favourite things.
Patrick Hussey:
It’s incredibly addictive, isn’t it?
Simon Tanner:
You have organisations like National Library of Ireland, which does a picture of the day.
Actually, that takes quite a lot of effort to do a picture of a day from your collection,
because you obviously want things to be relevant to that day; you don’t want things to
be the same.
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That may seem like a tiny amount of income, but if you start multiplying that by the
hundreds of thousands, then it’s actually a reasonable income that’s worth having.
John Wilson:
Patrick Hussey, I’m going to give the last word to you, so go out with some real blue sky
thinking.
Patrick Hussey:
There are so many things. I think data is absolutely huge real-time. Look up Google
now, you could start geo-locating your art, so it pops up on people’s phones when they
walk past your building.
Presenter:
Geo-locating your art?
Patrick Hussey:
Yes. Maybe you have written a play about the local war memorial. Why not have that
pumped into people’s headphones when they walk past? Then you could have a very
atmospheric, real-time placement of your work.
Digital is doing what art has always tried to do. It takes the ideas out of people’s heads
and makes them communal, and plastic, and interrogate-able, in ways we’ve never
dreamed of. It’s a creative, wonderful thing. It’s also a potentially scary thing. If there’s
one sector that should really get down with it, it’s the Arts.
John Wilson:
Thank you very much indeed to all of you on that note. Although this is the last
programme, we’d very much like to hear from you on the subject raised in this
programme and, indeed, throughout the series. Please do Tweet us, using the hash tag
‘artsdigital’.
My thanks to my guests in the studio here today, Patrick Hussey, Simon Tanner, and
Peter Tullin.
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Voiceover:
The Digital R&D Fund for the Arts is open for applications until 30th December, 2013.
To find out more information, or to apply, visit ‘artsdigitalrnd.org.uk’.
You’ve been listening to a podcast from Arts Council England. Don’t forget to share and
bookmark these podcasts on the Arts Council iTunes channel, or at the Arts Digital R&D
website: ‘artsdigitalrnd.org.uk’.
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