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



V. Key Issues and Recommendations


Exploitation: Valorising cultural heritage resources

Making exploitation work for cultural heritage institutions

Today, many cultural heritage institutions are seeking a place in the online market and are looking for "niches" and business models that might work for them. The objective of these institutions is not to become commercial but to gain some revenues in order to finance at least a part of their cost-intensive operations (e.g. total cost of ownership of collections).

In sorting out what is appropriate for exploitation, experts in the cultural heritage field draw a line between commercial services versus uses that should be free of charge. In the latter group most often mentioned are educational uses of material as well as basic information services, e.g. online catalogues, bibliographical information or standard research on collections.

Whereas for higher-value services charging seems appropriate, it needs to be highlighted that in the educational sector the subscription fees will most often not be paid by the individual users (teachers, students) but by the educational institutions or the responsible public entities.

In the Exploitation part of the DigiCULT-study an overview and assessment of online business models for cultural heritage institutions is given. The following paragraphs summarise the results and provide a set of recommendations for policy and institutional decision-makers.

 

 Key issue 1: Online user attention and information

Selling user attention (e.g. banners on a website) has low commercial potential. Offering online advertisement opportunities might be a business line for major cultural heritage institutions, networks or portals. But, generally, advertisement for cultural heritage institutions seems suitable mostly in the framework of major sponsorships for a project rather than the whole website.

Selling user information is clearly not an appropriate line of business for cultural heritage institutions. What the institutions themselves need to do is gather more detailed information on their users to be able to adapt and further develop their services according to changing user demands.

Recommendation 35: Cultural heritage institutions should use the attention they receive from visitors for marketing their own products and services.

Recommendation 36: Cultural heritage institutions should gather and exchange user information in order to adapt and further develop the services they provide to users.

Recommendation 37: For smaller, less known institutions cultural heritage networks and platforms should act as aggregators of attention and provide them with user information and feedback.

 

 Key issue 2: E-retailing: Physical products

Selling physical products via online channels is an option and actually a practice of many cultural heritage institutions (in particular museum giftshops). For small institutions it might be a plus, for major institutions or specialised actors it can represent a considerable line of business.

Generally, institutions that want to develop an e-retailing business need to be aware of the potential channel rivalry between their in-house and online shop. Additional costs for the online business line might not pay off.

Prerequisites for success are to establish a brand and in particular to develop unique products that are (ideally) related to in-house collections. Furthermore, in order to bring their products to the attention of many potential consumers cultural heritage institutions need to intensively co-operate with intermediaries in the sector (including e.g. tourism agencies).

Recommendation 38: Cultural heritage institutions should explore the opportunity to develop unique physical products related to in-house collections as well as to market and sell them online.

Recommendation 39: In order to avoid market failures, cultural heritage institutions should reduce risks and seek partnerships with established user focused agencies, institutions or companies (e.g. tourism agencies).

Recommendation 40: Smaller institutions should intensively co-operate with cultural heritage intermediaries, networks and portals that aggregate visitors to market their products.

 

 Key issue 3: Digital product development

Developing and marketing digital cultural products (e.g. cultural CD-ROMs) is still a risky and costly business. Returns from most off-line multimedia products have shown to be very limited, profit often being not more than 1-3%, with many products not reaching the break-even point.

Experts recommend that the development of online cultural heritage multimedia be made the priority, and that an off-line product be offered only in the case of an online success and a proven demand for such a product.

After the experiences of the last ten years in the multimedia market the willingness of cultural industry players to put money into cultural multimedia projects will be limited. Yet, in order to develop attractive products and bring them to a broad market creative and commercial partnerships might be very helpful.

Recommendation 41: National and regional governments should support cultural heritage institutions in developing digital on- and off-line products that bring the richness of their collections to a broader public. If partnerships between institutions and creative or commercial companies are needed for market success, appropriate measures should be put in place to stimulate such partnerships, e.g. public-private co-financing or sponsorship models.

Recommendation 42: In order to generate digital cultural products, including material from lesser known institutions and collections, national and regional governments should support setting up creative and commercial centres that might favourably be implemented within organisations that manage cultural heritage networks and platforms.

 

 Key issue 4: Digital commerce - licensing

Digital commerce, i.e. selling or licensing digital/digitised objects online, is today explored by many cultural heritage institutions. Licensing digital surrogates of objects from (special) collections is seen as the most promising market, yet, it must be highlighted that this is primarily a Business to Business market.

According to a market study conducted for the Canadian Heritage Information Network (CHIN), across the most relevant market segments (i.e. publishers, broadcasters, multimedia companies, advertisers and corporations) relevant cultural heritage resources are mostly images, and to a much lesser degree other material such as film and video footage. Being the most content-driven cultural industries, publishers and broadcasters are the most likely to have a need for intellectual property of cultural heritage institutions, while the small multimedia companies (i.e. CD-ROM and web site developers and producers) are much less relevant.

Barriers to market entry are high and cultural heritage institutions need to find and intensively develop their niche in competition with stock agencies or brokers that set the state-of-the-art in online licensing (and surely dominate the advertising and corporate market for licensed images).

The list of key elements that cultural heritage institutions need to effectively exploit resources online are:

  • standard electronic on/off-line catalogues,
  • standardised and well understood rate structures for various uses,
  • end-to-end clearance (preferably a centralised one for many cultural heritage institutions), as well as
  • quick turnaround time.

An option for cultural heritage institutions may be to seek partnerships with existing agencies or brokers (rather than build in-house systems), yet such an option seems to be realistic only for institutions with high valued art or unique special collections.

Overall, it must be highlighted that it is only where the intrinsic, authentic nature of cultural heritage sources is perceived as valuable (and the expert knowledge related to relevant material is an essential plus) that a considerable market potential exists.

Recommendation 43: Cultural heritage institutions should build on their strengths, authenticity, knowledge-based interpretation and contextualisation, and use new technologies to develop their own niche markets for licensed resources.

Recommendation 44: Cultural heritage institutions should develop the necessary elements they need for licensing resources effectively (e.g. standard electronic on/off-line catalogues, standardised rate structures for various uses, end-to-end clearance, and a turnaround time that is appropriate for the main customers).

 

 Key issue 5: Strategic development of shared themes of common interest

Cultural heritage collections do not lend themselves easily to commercial exploitation. For example, out of a historic image archive only a small fraction of the holdings (perhaps 5 to 10 percent) might be of any commercial relevance if available in digital form online. In addition, future customer segments are not readily evident. ‘They do not just walk through the door’. The personnel of the institution would have to completely re-focus its work on marketing and selling the material to the most relevant customers. Experts believe that first, a ‘critical mass’ of digital cultural heritage collections should be produced to enable customers to find what they are looking for. This approach seems to influence many cultural heritage institutions towards mass-digitisation of their holdings, yet these investments are unlikely to pay off.

A more reasonable approach to market digital surrogates of cultural heritage resources would be to develop shared themes of common interest in which players throughout the cultural sector (including e.g. publishers and broadcasters) could buy into. Such themes would

  • stimulate the public interest in particular cultural heritage topics and resources,
  • create new market potential for institutional and commercial players in the cultural sector, and
  • provide a basis for a purposeful digitisation of certain special collections.

Recommendation 45: Cultural heritage institutions should, together with cultural councils, cultural industry and media partners, strategically develop and heavily market cultural and historical themes in order to create a basis for the purposeful digitisation of certain special collections.

 

 Key issue 6: Subscription-based information services and virtual environments

Libraries

Information services are a major domain for libraries, with traditional commercial (non-subscription-based) services being document supply and custom research. With regard to new online services one can say that commercial success or even sustainability in the world of scholarly and educational libraries is far from being easily achievable (if it is a declared target of projects). These libraries stick to their mission as ideally free information hubs and develop valuable online solutions for special material needed in scholarly research and education (e.g. digitisation of journals, material for course readings).

Yet, in the digital environment competition is growing for the future face of ‘the library’ and the question will be whether the established libraries will in the long term be the places to go for relevant e-material. Mainly because the major commercial players increasingly control the complete online information chain and, in particular, the subscription-based services.

Without a complete change in the model of scholarly publishing, libraries will have to direct users to these commercial services for online access to most current published material.

Recommendation 46: In order to play a relevant role on the market for online access to e-material, libraries should build up their own digital collections from all resources they can get, e.g. by managing collections for various parties in the publishing cycle as well as digitising parts of their collections.

Recommendation 47: The European Commission should commission an in-depth market analysis of international and European players on the market for subscription-based access to published works as well as conditions that might lead to market dominance and control.

 

Archives

With regard to historical public records and other archive material an explorative DigiCULT case study looked into the online genealogy and family history market. This booming market is today dominated by major commercial players that are US based (Ancestry.com, Genealogy.com). Furthermore, it needs to be highlighted that these players are expanding, i.e. integrating the information of European databases into their stock.

Recommendation 48: With many European archives now starting projects to get into the online genealogy and family history market, in-depth analysis and regular monitoring is required, taking into account international as well as national developments.

  • The European Commission should commission a study on the European/global market for genealogy.
  • In order not to let extra-European players completely take over the genealogy & family history market, appropriate sector and institutional policy measures should be set.
  • Public records and related archival institutions should themselves closely observe and proactively explore their opportunities on the genealogy market. They should define and develop their own position and strategy (depending e.g. on their holdings) as well as favourable strategic partnerships.
  • Institutions in the field should also look into lessons that can be learned from the genealogy & family history market. A key factor for commercial success in this market is building and/or supporting communities of users.

 

Museums

Subscription-based virtual environments, in particular for e-learning, are today being explored by major museums as well as new cultural heritage organisations (e.g. louvre.edu, SCRAN, AMICO). In Europe, these projects are not commercially driven, but developed within projects that are publicly funded. The aim of these projects is to build protected environments that provide high-value cultural heritage resources for educational use. Commercial ventures related to the cultural heritage sector are rare (e.g. Fathom.com) and of questionable success.

Recommendation 49: National and regional governments should support the establishment of virtual protected environments as the most relevant future platforms for cultural e-learning.

 

 

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