Fiat Conference Amsterdam 2014: Creating value from your archives; online revenue perspectives and...

Creating value from your archives; online revenue perspectives and

possibilities for cultural institutions

1FIAT/IFTA | 17 octobre 2014

FIAT/IFTA Conference Amsterdam

October 23, 2014

Daniel Teruggi: [email protected]

Masterclass 1

The potential value of cultural websites

Who is concerned?

Any collection-holder with the legal possibility for an online exploitation or

working with Public Domain contents

What is presented in this session?

A typology of possible ways of generating an income through different access

and collaboration models

Can everybody make “some” business?

The form a business model may take depends on the nature of the contents and

the potential business around them

Can a cultural web-service survive on only its commercial revenue?

The answer is no, but there are interesting options!


Different economic models for websites

FREE

Free service for users

FREEMIUM

Limited Free service with improvements through payment

PAYMENT

User pays for services

COMMUNITY

Many hands contribution

OTHER POTENTIAL SERVICES

Potential associated services: Education, storage, APIs, membership…


The FREE model

FREE: services are free for the user because financed by underlying

business models

> Advertising: free, in exchange for advertising

> Patronage, Donations, Subsidies contributions

> Sponsorship: common commitment to a commercial operation

> Shop window: selling contents through a third party website


The FREEMIUM model

FREEMIUM: or “limited free model”, the first level is free then

payment level with additional advantages or benefits

Web user can discover, test or use, in real-life conditions, a free service

or product

This formula encourages viral marketing, because if the user is happy

with the site, he will not hesitate to recommend it to his peers

The production of value will also be proportional to the extent of the

network


The PAYMENT model

PAYMENT: business model is considered to be profitable (depending

on the value of what is paid for). Different forms of payment:

> One-off purchase: product is sent or the content is downloaded once

and for all

> One-off rental: content is made available in streaming or in a

temporary download

> Subscription: rentals by subscription


The COMMUNITY model

COMMUNITY: value creation by the community, the principle is the

contribution of many little hands to do a large job

> Crowdsourcing-oriented: contributions are rewarded through a result

which benefits everyone

> Crowdfunding-oriented: production websites where the user invests

directly or through a partnership arrangement with production

companies

> Advertising-oriented: introduce a money component into the offering

of professional contents

> Soliciting voluntary contributions: banner saying that in order to

continue its activities it needs help from users who thus contribute

to the existence of the portal


Other potential services

Potential services: not always possible, depending on the nature of

the institution and its activities

> Developing storage and/or exploitation services: depending on the

visibility of the institution and its capacity to manage these issues

> Establishing an annual subscription for members: a kind of support

Club; similar to crowdfunding

> Sharing revenues on API usage: opening contents to external

applications

> Educational partnerships: curating special collections for educational

use within colleges or high-school in exchange of annual fee


The Free model


The FREE model

Advertising:

Two modes:

Traditional non-video advertising formats: display (strip, banner, rich media,

sponsoring, sponsored links.

Video advertising formats:

The advertising spot inserted before the video (pre-roll), during the video (mid-roll) or after the video (post-roll)

The overlay (semi-transparent advertising strip covering all or part of the screen for a few seconds)

The advertising graphic skin of the video player (colours, visuals and logo of advertiser)


The FREE model: Traditional non-video advertising formats: display (strip, banner, rich media, sponsoring, sponsored links.


The FREE model: Traditional non-video advertising formats: display (strip, banner, rich media, sponsoring, sponsored links.


Example of a display banner and subscription

Potential revenue: 15 to 20k€ for 3 million

visits per month (7 million viewed pages)

Measured in CPC (Cost per Click of the user)

The FREE model: The advertising spot inserted before/during or after the video



Video pre-roll advertising is considered to be

40% more expensive on a TV set than on a

computer, pricing depends on the popularity of

the site, from 60 to 210€ per pre-roll for 1000

views

The FREE model: The advertising spot inserted before/during or after the video


Video pre-roll advertising is considered to be

40% more expensive on a TV set than on a

computer, pricing depends on the popularity of

the site, from 60 to 210€ per pre-roll for 1000

view

The FREE model: The overlay, semi-transparent advertising strip covering all or part of the screen for a few seconds


The FREE model: The overlay, semi-transparent advertising strip covering all or part of the screen for a few seconds


The FREE model: The advertising graphic skin of the video player (colours, visuals and logo of advertiser)

The FREE model

Advertising:

Video advertising formats:

They are considered to be boring and highly intrusive, specially if they last more than 30’

Advertising is more and more based on the user’s profile and choices

This model is difficult to apply to cultural websites in terms of image, public

service or even ethical considerations


The FREE model: Patronage, Donations, Subsidies contributions

Several models:

Donations or patronage can be carried out in money, in kind, in equipment, or by making staff available.

The State may contribute, by granting tax breaks to the companies or private individuals providing the patronage.

A patron can highlight its action by displaying its name or logo for example,

but without advertising to promote its commercial activity

Very interesting for Cultural websites


The FREE model: Sponsorships

The sponsor and a beneficiary commit themselves to a commercial

operation, with the intention of obtaining a profit :


The Rijksmuseum is a leader in these kind of

operations and more and more museums are

following this track

The FREE model: Shop-windows

Companies with shops in museums, a well installed model


The FREE model: Considerations

The potential revenue depends on the interest and value of the

contents. For Museums it is easier indeed to monetize their assets

than for an audiovisual collection!

Example for “The Louvre”

Its revenue is organized in the following way:

State funding 50%

Ticketing 27%

Donors and sponsors 11%

Location of premises 7%

Others (boutiques) 5%


The FREE model: However we have a very good AV Archive example !


The Freemium model


The FREEMIUM model or “limited free model”


We transfer, Dropbox or Wordpress are the

leaders in the domain, they have created wide

networks based on free services

The FREEMIUM model or “limited free model”


Ina’s model for many of its online contents: see

a part of it for free, pay for full viewing or

download (also a banner here)

The FREEMIUM model: considerations


The FREEMIUM model is growing in terms of websites applying this

business model

Efficient Marketing tool, if users are happy they will recommend the site

It need a strong number of users, the created value is proportional to the size of the network

The amount of paying users amounts 10 to 15%, very large infrastructures are needed to support such a model

Very popular among broadcasters

The Payment model


The PAYMENT model

You need to sell objects or contents with commercial value,

otherwise the cost of installing such a service will be too high

Different models:

> One-off purchase: product is sent or the content is downloaded once

and for all

> One-off rental: content is made available in streaming or in a

temporary download

> Subscription: rentals by subscription


The PAYMENT model: The payment model


Amazon is a combination of several models. Their business model is

based on sales, services, subscriptions and advertising

The PAYMENT model: One-off purchase or rental


The PAYMENT model: Subscription; the growing model !


Archives are starting to think in proposing these kinds of services

The PAYMENT model: Subscription; the growing model !


Archives are starting to think in proposing these kinds of services

Complex model, needs lots of subscriptors in

order to work, and a strong platform. Rights

negotiation are crucial and the success of the

platform depends on the attractiveness of its

contents

The Community model


The COMMUNITY model

COMMUNITY: value creation by the community, the principle is the

contribution of many little hands to do a large job

> Crowdsourcing-oriented: contributions are rewarded through a result

which benefits everyone

> Crowdfunding-oriented: production websites where the user invests

directly or through a partnership arrangement with production

companies

> Advertising-oriented: introduce a money component into the offering

of professional contents

> Soliciting voluntary contributions: banner saying that in order to

continue its activities it needs help from users who thus contribute

to the existence of the portal


The COMMUNITY model: Crowdsourcing, contributions are rewarded through a result which benefits everyone

Applied in very different domains !


The COMMUNITY model: Crowdfunding; small investments against partnership or other benefits

Used very often in film production



Or in music production


The COMMUNITY model: Advertising oriented

Going through a platform as a professional (i.e. Youtube)


The COMMUNITY model: Voluntary contributions

Wikipedia is the strong model


Wikepedia’s budget was 20.4 million US dollars

in 2012

Resources: 16 million US dollars from 500,000

“small donations”, with the rest coming from

subsidies or awards for excellence

The COMMUNITY model: Voluntary contributions

Wikipedia is the strong model, which is also a Crowdsourcing one



Potential services: not always possible, depending on the nature of

the institution and its activities

> Developing storage and/or exploitation services: depending on the



Club; similar to crowdfunding


applications





Developing storage and/or exploitation services: depending on the





Club; similar to Crowdfunding

Annual subscriptions; or the friends of an institution are the strong models. It implies creating links with the public or institutions that help an active.




applications




use


Final Considerations


The starting point is the “potential value” of your assets

Each different model permits to exploit different facets of the

contents

> Each cultural institution has its own profile which can be exploited

> The legal situation of contents can be a strong drawback

> There are revenue possibilities but they can only be complementary

to other funding models

> The expected financing ranges from 5 to 10% of total costs

Potential

Feasibility

Advertising

Patronage/Donations/Subsidies

Pay sites

Shop window

Crowdsourcing

Freemium siteSponsoring

Contributions

Crowdfunding

High Level E

Storage Service

Annual subscription

API revenue

Educational E

Free sites

Freemium site

Pay sites

Community sites

Potential services


My special thanks to Laurence Lecoeur from

Ina, who helped me build up this survey

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