Market Facing Digitisation
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- 1.A MARKET-FACING VIEW OF DIGITISATION 25.03.09
2. Why Digitise? What is your ROI? The Product Development Cycle The market for your content How Consumers use Digital content Bringing content to market Costing the breakeven point for your content Constructing a Business Case for your Digitisation project Contents 3. In recent years, a growing understanding of the costs of digitisation, in terms of both time and financial resources, has placed a greater emphasis on developing digitisation initiatives and programmes which realise tangible and strategic benefits for the institution and its users, rather than opportunistic or short-term projects that are limited in their scope or focus. The trend for market-facing Digitisation... Digitising Collections: Strategic Issues for the Information Manager Lorna Hughes Facet Publishing 4.
- Arts & Humanities Research Councilchanging priorities to place greater emphasis on user benefit and sustainability.
- Museums, Libraries and Archives Council (MLA)developing Digital funding programmes which require evidence of user demand.
- i2010 Digital Libraries Initiativeplaces emphasis on Digital Cultural Content contributing to the Digital Economy.
- Digital Britainreport emphasises the return on investment of public content and services driving Digital literacy and stimulating demand for Broadband .
- Regarding public investment in Digitisation as capital investment which will generate both aneconomicand apublic benefitreturn...
Funder priorities... 5.
- Internal Drivers
- Increasing access
- Improving search/browse capability
- Supporting education services
- External Drivers
- Availability of Project Funding
- Strategic/policy directives
- Pressure from stakeholders/funders
- Enquiries from users
Why Digitise? These are unlikely to satisfy funders in future...the perception is that the Return on Investment on internally-motivated Digitisation isnt sufficient, and that internally-driven projects lack a focus on delivering user benefit... 6.
- What constitutes a satisfactory Return on Investment for your Digitisation?
- Whose expectations are guiding your project?
- What targets/PIs are you working to?
- Are they qualitative or quantitative?
- Do you have a clear end-goal to work towards?
- What will you have achieved if you reach that goal?
- If project funding werent available for Digitisation, would you fund it from core? More so than stock purchasing or staff salaries?
What is your Return on Investment? 7.
- Idea generation
- Idea screening
- Concept development & testing
- Marketing Strategy
- Business analysis
- Product development
- Test marketing
- Bring to market
- Ideas are generated based on the organisations objectives and what it believes about user demand.
- Ideas arescreenedon the basis of the actual demand, the likely return on investment, the length of time to achieve a return and the state of the market.
The Product Development Cycle 8.
- Reasons for developing products:
- To expand a portfolio of products and services
- To replace products for which the demand is declining
- To increase market share
- To build competitive advantage
- To attract new audiences
- Diversify into new markets
- Digital asset is a product which of these reasons is driving your Digitisation?
- What is the USP ofyourcontent which differentiates it from other digital cultural material?
The Product Development Cycle 9.
- A highly competitive industry spanning broadcast, publishing, music, press, film, mobile content platforms, games development
- Rapidly reaching saturation point smaller providers tending towards integration
- Unit transactions are being replaced by downstream revenue, subscriptions, author-pays and a variety of other non-economic value transactions
- Widespread abuse of Intellectual Property undermining the principle of the economic right of the creator
- A traditional market: differentiating on quality, reach or niche
- Which is your collection?
The Market for Digital content 10.
- 98%/2% rule
- Our throughput is rarely sufficient to generate advertising revenue
- We do have a loyal user-base and access to a range of demographics
- We have atrustedbrand
- We have expertise in curation
- Nobody is going to get rich on Digital cultural content
Monetising content = ? 11.
- Direct transactional:
- Subscription or one-off payment
- Contributor pays
- Indirect transactional:
- Institution funds
- Corporate sponsorship
- Advertising (Search, Display, Classified)
- Content/value exchange (barter)
Business Models for Digital Content 12.
- Different modalities of use for different elements of a modern lifestyle
- Home-based leisure/entertainment content
- Content to support self-directed research and learning
- Mobile content, and context/location-sensitive content
- Device convergence leading to cross-platform content
- The reduction in barriers to entry and the rise of the prosumer
- Looking for content which is embedded into daily experience
- Tendency for content to be free at point-of-use or used as a loss leader
- Tendency to move from sit back (TV) to sit forward (Internet/console)
How Consumers use Digital Content 13. The demand is fundamentally for content which workswith the grainof user behaviours embedded, integrated, free and available irrespective of context or platform... The reality for the vast majority of libraries, archives and other cultural providers is that we dont have the capacity, reach, infrastructure or resources to bring our content direct to market.A big part of the future picture is likely to be working to supply mainstream media with content to be incorporated into public service broadcast and publishing.How Consumers use Digital Content 14. Content is nothing without a vector Theproductis the end-user experience, which depends on the integration of content and platform (viz. iTunes, iPlayer, 4OD) The current model is web-publishing, moving into web-syndication.In future, a Digital asset is likely to be pretty useless unless it is packaged into a usable artefact and made available for delivery by 3 rdparties which means your costs go up. A challenge to a sector in which PIs and authority depend on bringing users into a controlled context.Future funding is likely to be dependent on content being re-purposable (including licensing) by 3 rdparties such as aggregators and content channels Bringing Content to Market 15.
- A traditional breakeven point is the point at which you have exactly covered the total costs of production through sales revenue.
- It marks a critical transition from aliabilityto anasset
- Balancing an equation between:
- Fixed costs (which dont vary with production, eg. salaries, rent and rates)
- Variable costs (which do, eg. raw materials, scanner time)
- Revenue (the surplus of income over expenditure)
- You can adjust a whole range of variables such as fixed costs, volume, period of return...
Costing a break-even point for your content 16. Costing a break-even point for your content Units Total sales Total cost 17.
- What is the cost of producing a Unit?
- What is the return (value) expected of each Unit?
- How many Units do you need to sell to recoup the total production cost?
- Depends on:
- A standard product with a uniform value
- A measurable transaction
Or the per-unit calculation... 18.
- We tend to take fixed costs as read (or subsidised)
- Our upfront variable costs are dictated by project funding
- Our volume is usually arbitrary (or collection-specific)
- Our period is usually arbitrary (or project-specific)
- The total cost of ownership is (theoretically) perpetual
- Our Return on Investment is intangible
- The value varies between each asset
- So...when is your Digitisation project successful? How would a funder know?
Except, in our case... 19.
- Use full economic costing
- Connect Digitisation with the ongoing strategic objectives of the organisation
- Monitor usage over time
- Prioritise value over volume
- Set targets based on known demand/patterns of use
- Assign a tangible value to each user interaction with a digital asset
- Assign a tangible value to the increased profile of the organisation
- Create a feeback loop leading to better-informed strategic prioritisation of digitisation resources
We can... 20.
- The need which triggered the Digitisation
- That the need originates from outside the organisation
- How your content is differentiated from other providers
- Your understanding of the total cost of ownership
- A realistic expectation of the return in terms of public value
- A strategic organisational commitment to sustaining the content
Constructing a Business Case for your Digitisation 21. Sustainability and Revenue Models for Online Academic Resources http://www.jisc.ac.uk/media/documents/themes/eresources/sca_ithaka_sustainability_report-final.pdf Digitising Collections: Strategic Issues for the Information Manager(Hughes, L) http://www.facetpublishing.co.uk/reading.shtml i2010: A European Information Society for Growth and Development http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52005DC0229:EN:NOT Deciding to Digitise(JISC Digital Media) http://www.jiscdigitalmedia.ac.uk/crossmedia/advice/deciding-to-digitise/ Key references 22. Contact... Nick Poole CEO, Collections Trust www.collectionstrust.org.uk www.collectionslink.org.uk www.culturalpropertyadvice.gov.uk