| Table of contents | Foreword | Introduction | Overview of recommendations | Situation analysis | Key Issues | Conclusion | Imprint |

IV. Situation analysis: Present state and perspectives of the cultural sector: 1996 - 2001 – 2006

In the mid-90s, the European Commission launched a remarkable programme to boost the use of information and communication technologies (ICTs) in the emerging Information Society. The programme promised economic growth, a growing employment market and an overall increase of quality in all aspects of our lives. Triggered by Al Gore’s White Paper for Building a National Information Infrastructure in December 1993 and the Bangemann Report, "Europe and the Global Information Society", in June 1994, the new technologies were considered as one of the key drivers of future prosperity. In 1996, all possibilities to realise this potential were open.

Between 1996 and 2001, the European Commission and national governments created regulatory frameworks removing some of the obstacles to the accessibility of the future e-business markets – breaking up the national telecommunication monopolies to lower access costs, for example.

The cultural sector, particularly the publishing and entertainment industries as main content providers, were seen as key players for the development of new products and services to be delivered over digital networks. The future appeared to be "rosy" and anything seemed possible.

However, in the last two years, the initial enthusiasm for the new economy has been severely dampened and there has also been a rude awakening for the content providers in the cultural sector. The fact that people consider Internet content to be free of charge, together with the continuing lack of effective legislation on international copyright, created major barriers for commercially successful ventures on the Internet. As a consequence, in many cases the expected return on investment often did not materialise and since the year 2000, some companies of the new economy were forced to close down.

However, this will only be temporarily, and given European youth’s embracing of the new technologies it is quite evident that better times can be expected in the future. Moreover, demand for quality content remains high.

For the cultural heritage institutions, it will become increasingly clear on how to market their unique resources especially to the educational community. A clear digitisation policy will enable memory institutions to create digital cultural heritage resources efficiently, for future access over computer and mobile networks. The key to success will be co-operations and strategic partnerships at all levels, with other memory institutions across the sector, intermediary organisations as well as commercial companies. Thus, cultural heritage institutions can reduce risk and avoid wasting resources as the cost of valorising cultural heritage resources commercially will remain high. Staff in cultural heritage institutions will be more versatile and better trained, with the necessary information management and project management skills to develop the personalised services and highly interactive environments that future users will demand. Trained personnel and growing digital collections will be the key to success.

The following situational analysis provides an overview of the situation in the cultural sector presently and potentially by 2006 (if our recommendations in the DigiCULT study find followers). This analysis should also help to develop a clearer picture on what to expect in the cultural heritage sector in the future.

1) Source: http://ibiblio.org/pub/academic/political-science/internet-related/NII-white-paper.

2) Source: http://www.medicif.org/Dig_library/ECdocs/reports/Bangemann.htm.


Cultural sector


Cultural heritage sector


Cultural heritage sector


Visions and perspectives

• "Rosy Future"

• Visions / assumptions / high expectations: new (economic) frontier with immense potential

• "Dreary Future"

• Expectations not fulfilled – vision missing

• "Some sunshine"

• Clear view of the benefit / value of cultural heritage


• "Multimedia and internet hype": Decreasing traditional markets entice publishers to enter new markets with high commercial value

• Assumed "killer applications": Broadband services like video on demand

• Rude awakening: No new mass markets in electronic publishing (video on demand etc.)

• Few examples of success in the cultural industries, and even fewer in the cultural heritage sector

• No mass market – but some niche markets

• Realistic view of market potentials instead of "killer applications"



Cost of market entry

• Cost of market entry thought to be low

• Cost for building up sustainable services are higher than expected

• Cost of entry remains high; services need clear focus on users to produce some revenues

User demands

• Assumption: Consumers look for quality and interactivity

• Uncertain about demands due to lacking data about user demands and expectations

• Users want high value for money, yet information in the public interest is expected to be free

• No mass markets, but mass users in specific fields


• Value added, MM-rich products and services delivered over broadband networks

• Unclear on how to sell value added services; users are used to "free-rides" on the Internet

• Only a few business models that work

• Some cultural heritage and educational services

• Commercially exploitable services and products: personalised, highly interactive services and "culture communities"; users can "package" their own products

• Funded services: scholarly, educational services, etc.

• Institutions increasingly co-operate with intermediary organisations to create new services and bring them to the market

• New, value-added cultural heritage services available that are not dependent on public funding


Cultural sector


Cultural heritage sector


Cultural heritage sector


(National) policies and initiatives

• EU driven policy

• Policy makers bought into the hype of new IT and multimedia based markets

• Strong influence of policy on market development

• Today, it is more difficult to sell IT and multimedia to politicians

• Cultural heritage ranks low on the scale of political priorities (and needs to compete with health sector, social security, etc.)

• Few countries with a clear strategy for digitisation

• Proven commitment of national governments to cultural heritage

• Awareness that both culture and education cost money, ...

• yet willingness to pay as benefits for society are essential

• Substantial influence in building new markets through thematically focused cultural heritage policy


• Deregulation of telecom monopolies has positive effect on consumer markets

• Regulations for born-digital objects needed, i.e. in the area of IPR and regulation of e-deposit

• Regulation for scientific and educational uses (framework to create protected environments)

• Legislation that regulates the responsibilities for born digital resources is in place

Employment opportunities

• Expectations for new employment opportunities are high

• Multimedia and IT-skills can provide higher-value jobs

• Overall % of growth relatively low for cultural industries, and particularly for cultural heritage sector

• Dramatic lay-offs in the IT-sector

• Threat for maintaining the scale of employment in cultural heritage institutions

• Overall, a slight job increase in the cultural industries; increasing interest from Member States, decreasing interest at EU-level

• Cultural heritage sector: job opportunities are still low, but can be stimulated by investing in cultural industries that make use of cultural heritage collections

• The number of administrative staff has decreased, but by re-training staff cultural heritage institutions succeed in increasing the number of highly skilled, creative employees

Economic and Financial issues

• Favourable investment climate

• Easy access to venture capital

• Policy did not have to pay for deregulation

• Cultural industry: much money spent, but no return on investment

• Cultural institutions depend for 90-95% on public funding that is decreasing

• Threat of "sale" of potentially profitable cultural heritage resources. (e.g. Corbis)

• Less money for cultural heritage institutions but more tasks to accomplish

• Pragmatic ventures: clear understanding of return on investment

• Still 85-90% public financing

• Professional fundraising and sponsor acquisition are widely used ways for cultural heritage institutions to obtain additional finances


Cultural sector


Cultural heritage sector


Cultural heritage sector


Delivery Infrastructure

• Fast technological development expected: from (narrow band) internet to broadband, video on demand, interactive digital TV, etc.

• Technologies with no marketable applications yet

• Broadband still not available (and not requested) in private homes

• Broad use of narrowband technologies (inclusive mobile for applications with clear cultural heritage value); in some countries, broadband available in private homes, while in other countries, "islands" of use (on site)


• Electronic publishing, multimedia tools

• Efficient but still rather complex tools with low usability

• Besides collection management systems, not many tools for cultural heritage sector

• New generation of easy to handle tools for domain experts and other target groups (e.g. teachers)

• Co-operative authoring tools

• Tools for defining automated workflows and data capturing in integrated systems


• Content not yet adapted for new technologies

• Therefore, highest potential for content owners

• Digitisation of cultural objects/collections without focus ("accidental digitisation")

• Clear digitisation policy and strategies focused on particular themes (clear concepts: which collections, how: methods & standards, e.g. of documentation)

Management and organisation

• Promising new organisational structures: "flat virtual enterprises" with networked creative knowledge workers

• Cultural industries will easily adapt to electronic production and delivery

• Cultural heritage institutions rely on traditional hierarchical structures

• They lack business view and competency

• New media & IT-skills often missing

• Traditional institutions: still relatively inflexible (generation gap)

• Some transfer through partnerships with businesses

• New competencies & skills incorporated through new personnel, best practice examples

• New types of cultural heritage organisations: cultural networks, service providers

Strategic partnerships and co-operations

• Mergers, mergers, mergers

• Need to position oneself in the new (e-publishing) markets as soon as possible

• Cultural heritage institutions enter into partnerships mostly within own sector: e.g. libraries co-operate on union catalogues

• Clear cross-sector partnerships on key issues, e.g. standards

• Technical support organisations

• Strategic partnerships with new types of cultural organisations and businesses

• Well established co-operative frameworks across sectors

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