Knowledge, learning and education

All over the world, we currently find digitalized paid forms of location-based arts and cultural formats, such as museum tours, performances, concerts etc., either live streamed or as video on demand. These are accepted very differently by the audience. Especially for the performing arts it by now seems to be quite difficult to convince people to pay enough for streams to finance technique, staff and licenses, not to speak of actually generating revenue with them. 

 

Here, the gap between the artistic form on-site and in front of the display is decisive. As entire industries have already successfully transformed and marketed the performing arts into location-independent forms decades ago, it is now difficult for live performance providers to enter this field - especially when they have to charge admission prices for individual performances that are several times higher than what the audience pays per month for Netflix & co. This also applies to performances especially developed for a digital staging. Such formats show a great popularity (e.g., the independent German production "Werther live” or Geffen Playhouse L. A.’s magic show "The Present”, among many others), but they are complex to produce and as cost-intensive to implement as analogue ones. And since they often rely on interactivity with the audience, video on demand is hardly possible. Turning such formats into revenue streams at the current rather low online prices - usually not about 10 Euros per ticket - is therefore extremely difficult.

 

In contrast, museums around the world are earning quite a bit of money with digital tours or virtual walkthroughs (next to the world’s biggest and famous museums, there are examples such as London’s Design Museum, Fondation Louis Vuitton in Paris, the German Neanderthal Museum, the private art museum Barberini and many more). This is particularly successful when the tours are tailored to specific target groups, for example for school classes, including topics from the curriculum or serving as preparation for high school graduation. In addition, there are live tours for children, for families, on special historical, scientific or pop cultural topics, etc. Some museums even offer to create tours on desired topics, for which they charge accordingly more. 

 

Prices for such formats usually differ between 5 to 10 Euros for individual participants and between 100 and 300 Euros for groups of about twenty people. Thus, these digital services are somewhat less expensive than those on site, but well suited for additional revenue beyond the costs, especially since most museums report a high demand for these paid digital formats. 

 

It thus cannot be claimed in general that audiences see digital services as not equivalent to those offered on site. Certain cultural experiences surely are strongly tied to analogue formats together with other people, but if paid digital formats are well requested instead depends on the specific format. 

 

 

If you look at studies, surveys, and polls on paid digital cultural formats to see what is mostly demanded, one topic is always at the top of the list: learning. This could be one of the reasons why museum tours currently work better than performing arts formats. Cultural and artistic education, however, offers a variety of possibilities for all cultural sectors.

 

In our Arts Management Quarterly issue on Generating Revenue Online from last fall, we have presented successful and well-used paid digital formats presented by dance companies, archives and museums, and all of them primarily focus on training and seminars. In order to implement such formats successfully, arts and cultural institutions as well as artists have to reflect on their expertise and ask themselves how they can pass this on to the audience in a practical and applicable way, for example: 

 

Organizations around the world have developed such trainings and courses (e.g., Barnes Foundation in Philadelphia or Opera North in UK) for prices similar to digital museum tours, and pretty often they are sold out as soon as they are published and promoted. Many institutions also offer kits for these courses that are delivered to participants' homes, for example, with painting and craft materials, which can also provide a source of income.

 

In addition, the first museums are starting to think about adapting their specific target groups tours to paid on-demand videos and seminars in various languages, e.g., for students from other countries. In this way, they want to take advantage of the geographic boundlessness of digital compared to analog tours and trainings. The focus is always on the content being applicable and helpful.

 

 

Most arts and cultural institutions offering paid digital formats count on one-time payments. Although they have practical advantages, subscriptions by now can be found merely in performing arts organizations for on-demand services, but they often do not cover costs. 

 

So far, artists in particular have shown how subscriptions can work well online. A study by the German Competence Center for the Cultural and Creative Industries has underlined that artists mostly use existing platform structures. Increasingly, they are choosing a combination of ad-supported streaming platforms and subscription-based monetization, for example on Patreon and Twitch. 

 

A potential approach here is to provide extra content for subscribers in addition to livestreams or video on demand content. Neil Young and Cardi B, e.g., generated a lot of revenue in recent months with digital subscriptions, which offer subscribers special content, concerts, behind-the-scenes footage, and so on. This requires comprehensive community management, and a lot of resources have to be invested in the additional content. This only pays off if the content can be created cost-effectively or if there is a large potential demand. Here cooperation between organizations could be a promising approach. 

 

This way, even lesser-known artists can here create new revenue stream, though certainly at a lower level. For arts and cultural institutions, such approaches may only be successful to a limited extent - for example, to promote themselves via artists they work with - but a mix of advertising and subscription funding is certainly possible. 

 

Subscriptions also seem to be especially promising for sequential and complementary training and education formats (e.g., Sydney Dance Company’s Virtual Studio), but also for closed event series and special content. For example, film festivals have proven to be very successful in selling digital subscriptions for their festival. Institutions from other sectors could think about adapting such a festival approach, e.g., as cooperation or joint ventures. 

 

In any case, to convince people to become digital subscribers needs incentives to retain the digital audience. This means additional effort, which of course should pay off in the financial result.

 

 

In addition to generating revenue with ads on Twitch and YouTube, some creators sell ad space within their own digital offerings, e.g., podcasts or Instagram accounts. This approach can also work for other formats but has hardly been tested yet. Compared to video platforms, the potential advertising revenues can be significantly higher, but it takes staff and time to acquire customers for advertising space

 

Another funding approach discussed lately is Pay what you want, meaning letting people pay a free to choose amount of money for a digital format. As first tries from the performing arts in Germany (Munich Kammerspiele) and South Korea (Seoul Performing Arts Company) have shown, it is an absolute necessity to work with a minimum amount people have to pay. The aspect of making costs transparent can play a particularly important role here. In any case, Pay what you want tends not to generate large sums per buy and is therefore only profitable for business models with low costs, such as downloads, or for video on demand when production costs already have been covered. But due to its low-threshold access, it enables arts and cultural institutions as well as artists to achieve a particularly high audience reach. The model is thus suitable for audience building in order to expand other monetization approaches. For public arts and cultural institutions, Pay what you want can be a way to weigh between free and revenue, and to explore people’s price sensitivity and willingness to pay for certain digital formats.

 

Finally, artists and institutions sometimes use freemium and offer their art or basic digital formats free of charge in order to subsequently sell merchandise, tickets, and the like. This kind of sale is proving to be extremely lucrative, especially in comparison with the revenues from streaming offers. Freemium can also be combined with advertising, with people paying for the paid premium service in order to not have to listen to or watch advertising. Some podcasters are offering such formats, often in combination with an earlier to access to new episodes or additional content. 

 

 

Paid digital formats are here to stay - at least that’s what it currently looks like. It’s hard to foresee to what extent digital formats will hold the same allure once people return to arts and cultural institutions in person. Anyway, the last year has shaped how people appreciate and use online formats. While concerts, performances and museum visits will get back to analogue someday, learning and training formats or special digital content will surely keep their current appreciation, especially, but not only for people who are not able to visit arts and cultural institutions themselves.

 

One reason why some paid digital formats have not been very successful yet could have been that organizations mainly digitalized analog formats instead of considering for which specifically digital formats there would be customers willing to pay. In other words, the digital cultural ecosystem should stop focusing on the marketing of the physical experience but create new online experiences and added values, such as promising digital learning formats. Such approaches can be a major source for revenue, when they are designed as profitable and easy to implement compared to digitizing elaborate art forms.

 

This is also the case because the competition among digital cultural formats is much greater than for analog ones. In most places, there is only a limited number of arts and cultural institutions and events to choose from. Online, on the other hand, everything is available. Standing out is therefore essential, also in terms of resource efficiency, for example by focusing on local or international users' needs or cooperating with other artists or organizations in order to address a bigger audience and broaden the topics that can be offered. For example, in summer people might less be interested in digital formats - but somewhere on the globe is always winter. Why not use that? 

 

At the end of the day, the question is what expectations of digital formats artists, arts and cultural institutions have. Should the regular audience be reached in digital? Or is it about attracting new visitors? Is complete funding the - difficult to reach - goal or a good additional income? Anyway, the prerequisite is that arts and cultural institutions step out of their comfort zone and developed something truly new and helpful.