Reproduction charging models & rights policy for digital images in American art museums

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The results of a Mellon funded project aurveying 100 art museums and interviewing 20 in depth about rights and reproduction policy, pricing and strategy.

The results of a Mellon funded project aurveying 100 art museums and interviewing 20 in depth about rights and reproduction policy, pricing and strategy.

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  • 1. Reproduction charging models & rights policy for digital images in American art museums Mellon Foundation funded studies in Europe and America Simon Tanner Director King’s Digital Consultancy Services Email: Web:
  • 2. Overview
    • Final report – PDF and Web
    • Key conclusions of the study
    • A way forward and some recommendations
    • Note: This US study is an extension of Simon Tanner's previous work for the Mellon Foundation at HEDS, which looked into pricing policy within UK and other European libraries and museums.
  • 3. Looking to America
    • The Mellon Foundation invited a study in the USA.
    • Considered Art Museums to have represented the most mature market when surveying Europe – thus focus of the US study.
    • US study looked in great depth and asked very searching questions, plus it studied the rights issues whilst European studies tended to avoid that area.
    • 100 US art museums surveyed.
    • 20 interviewed in depth (sometimes over 2-3 days)
    • Over 3,000 data points for comparison and analysis gained
  • 4. Opinions expressed on pricing
    • “ don’t like to charge people money, it makes me nervous”
    • “ image quality is the foremost concern, though we hope to make some profit”
    • “ do not wish to restrict use – have evidence to suggest that price does effect the amount of use”
    • “ charges act as a natural break on the activity level”
    • “ review the market prices and charge slightly lower to encourage more use”
    • prices recognise that “scholars and educational use deserve a lower barrier to access to images”
    • “ providing images helps educate the public and reach beyond the museum”
    • “ to be fair but to be part of the market”
  • 5. USA Art Museums: Survey Results 150 1,841,302 $10,439,327 56 Private non-profit 115 981,785 $10,567,039 100 Totals 89 309,500 $17,700,000 10 Private 69 178,000 $7,956,500 34 Public Average Number of Staff Average Attendance Average Operating Budget Number in survey Museum Governance
  • 6.
    • Museums interviewed
    • Art Institute of Chicago
    • Asian Art Museum
    • Fine Arts Museums of San Francisco
    • Harvard University Art Museums
    • Isabella Stewart Gardner Museum
    • Jack S. Blanton Museum of Art
    • Los Angeles County Museum of Art
    • Metropolitan Museum of Art
    • Minneapolis Institute of Arts
    • Modern Art Museum of Fort Worth
    • Morris Museum of Art
    • Museum of Fine Arts Houston
    • Museum of Fine Arts, Boston
    • Museum of Modern Art, New York
    • Museum of the American West
    • Pierpont Morgan Library and Museum
    • San Antonio Museum of Art
    • San Francisco Museum of Modern Art
    • Smithsonian American Art Museum
    • Tampa Museum of Art
  • 7. Motivations and objectives of services
    • Museums do not carry out image creation or rights and reproduction activity because of its profitability
    • Revenue raised from reproductions and rights services are relatively small
    • Revenue very rarely exceeds expenditure
    • Serving mostly internal needs and external requests for publication
    • 65% of those interviewed do less than 500 transactions a year.
    • 56% of those interviewed received less than $50,000 a year from rights transactions.
    • 99% of those surveyed charge less for educational use than commercial use
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  • 12. Cinderella services
    • Essential to a museum’s operation and engagement with its audience…
    • but not very highly valued
    • Distinct disconnect between the museum audience and those served by imaging and rights services
    • The disconnect between imaging & rights services and the museum’s core audience means they do not receive the credit they deserve for enabling the wide dissemination, retailing and publication of the collection .
  • 13. Money and management
    • Centralized rights services raised more revenue and did more transactions for their museum
    • More able to manage, plan and establish policy across the whole museum
    • The largest revenue earners were those museums where money was assigned directly back to the service department to offset or recouped against costs.
    • The lack of business planning and clear cost accounting for the actual cost of service provision is undermining museum efforts.
    • Most museums are setting pricing on the perceived market rate rather than with reference to the cost of actual service provision
  • 14. A way forward and recommendations
    • Defining museum priorities
    • Management structures
    • Professionalize the rights function
    • Revenue assignment
    • Pricing model
    • Digital imaging
  • 15. Museum priorities: some questions
    • Is control over use, fidelity and credit the most important priority to the museum?
    • Is promotion of the museums collections as important a priority?
    • Does scholarly and educational use of an artwork ever contradict or supersede the need to control its representation and use?
    • Does serving the internal needs of the museum ever contradict or supersede the need to control the representation of artworks?
    • Does recouping service costs or making a surplus ever contradict or supersede the need for control? Is there a sum of money at which the museum would relax such control?
    • Are providing high fidelity images with an appropriate license for the museum and the wider communities use more important than how much the service costs to run?
  • 16. Management
    • Centralize the rights function
    • Ensure it is functionally impossible for other areas of the museum to give away or license rights
    • Professionalize the role
    • Invest in training
    • Plan in a business like fashion whilst understanding this is not necessarily a business
    • Assign revenue
    • Internal markets (even virtual ones) provide for evidence based management
  • 17. Pricing: a suggested formula
    • C x V x R x NP x D = price offered consumer
    • C = actual cost of service provision
      • the cost of imaging
      • data or photograph storage
      • curatorial time getting object to and from studio
      • the averaged cost of staff time for a transaction
      • overheads
      • depreciation
      • materials
      • management costs.
    • V = the viewer figure or print run size
    • R = the revenue figure – how much revenue will the image use generate for the consumer?
    • NP = the non profit factor – if set to less than 1 this offers a discount to non-profit uses
    • D = Discount value – allows discounts to certain classes of client
  • 18. Case study: Art Institute of Chicago
  • 19. Reproduction charging models & rights policy for digital images in American art museums Mellon Foundation funded studies in Europe and America Simon Tanner Director King’s Digital Consultancy Services Email: Web:
  • 20. Survey Results: Digital Activity 2% 97% 76% Totals No Charge! Analogue asset fee Digital asset fee 12% 12% 9% 67% Totals None Mix of both Outsourced Inhouse Digitisation Activity
  • 21. Service Profiles: payment & delivery
    • 85% demand payment in advance
    • 20% willing to charge after delivery
    • 5% did both depending on the client
    • Average delivery time offered: 2 weeks (range <24 hours to 6 weeks)
    3% Account 36% Invoice 65% Credit card 86% Check or bank transfer 7% 0% Totals Cash E –commerce Payment method
  • 22. Service Profiles: rights & finding images
    • Rights and licensing
      • In-house only = 71%
      • External agency exclusively = 2%
      • Mixture of both in-house and external agency = 27%
      • Agents listed include: Art Resource, Bridgeman, Corbis, Davis and Scala
    • Methods used to find images:
    24% Personal research 26% 43% 37% 56% Totals Publications / exhibitions Locate for client Catalogue / library Website
  • 23. Interview Responses: Museum profiles
    • 20 interviews:
      • 11 private non-profit museums
      • 6 public museums
      • 3 private museums
    • Range from 2,000 – 2,000,000+ works in collections *
    • 60% have <5% of collection on public display
    • 85% have <20% on public display
    • 15% have 21%-100% on public display
    • * >4 million works owned by the 20 museums
  • 24. Museum profiles
    • Museum operating budgets range from $3 - $160 million
    • Majority receive significant endowment support
    • All public and some non-profit museums receive money from the community – city/county/federal/government.
    • Museum audiences (in order of precedence):
      • Local community and citizens
      • Tourists and general public
      • Academe - scholars and students
      • Education – schools and colleges
      • Other museums
  • 25. Profiling the imaging and rights services
      • Asked about how the imaging and rights services served the museum’s mission, who are the primary audiences, how do you serve them and when do you say no.
      • Also asked about staffing, resources, number of transactions and the services relationship to other parts of the museum.
  • 26. Serving the museum’s mission
    • To educate and advance the knowledge and appreciation of art: “bringing art to life”; “to tell stories of the American experience through images as well as physical objects on display in the galleries”; “what is an image without context?”
    • Serve scholarly research and teaching (12)
    • Promote and publicize the collections (10)
    • Disseminate widely - especially to new audiences ( 9 )
    • Improve access to the collection for everyone (8)
    • Provide images for publication (4)
    • Leader in the community (3)
    • Enable retail and revenue (2)
    • To ensure use is appropriate (1)
    • To help administer the collection (1)
    • (Brackets show number of responses)
  • 27. Primary audience for services
    • Internal to museum – the biggest audience is internal
    • Text book publishers
    • Scholarly publishers
    • Commercial publishers
    • Scholars including art historians and individual research
    • Web use
    • Museum to museum – to support exhibitions etc.
    • K-12 and other education use
    • This list is a sharp contrast to most museum’s core audience of the local community, tourists and the general public. The services are thus always one step distant from the museum primary audience, behind an intermediary.
  • 28. Image creation and volumes
    • Reasons to create images:
      • New acquisitions or accessions photography
      • Fulfil requests and orders for images
      • Internal demand
      • Charges for new imaging range from $25 to $250 for 2D
    • Volume and coverage of images:
      • 9 museums have < 25% of collection imaged
      • 4 museums have between 25 – 50% of collection imaged
      • 5 museums have more than 50% imaged
      • 2 museums have 100% imaged
      • Note: the amount digitally available is very variable across these responses.
  • 29. Reasons to deny use or not create image
    • Reasons to deny use or not create image:
      • Inappropriate use – many definitions of this!
      • Alter image – e.g. crop or overprint
      • No payment
      • Compete with other commercial/retail endeavour
      • Purely for profit – e.g. tee shirts or mugs (not sold in museum)
      • If endorses a product, is for advertising or corporate branding use
      • The artworks donor or gift may stipulate acceptable uses
      • If in storage (one site had storage in different State!)
      • If artwork will not fit in the studio
      • If artwork is too fragile
  • 30. Relationship to other museum processes
    • The majority of museums responded that services are centralized with all requests going through one person or unit.
    • This provides a clear advantage to the museum
      • more efficient
      • focus of experience for imaging and/or rights
      • enables more control (reduces rogue curator actions!)
      • allows for the possibility for an internal market
    • When not centralized then is more difficult to control use or to manage the process effectively.
    • Common conflicts:
      • Rights given away for free
      • Digital images considered less desirable for printing
      • Non sharing of revenue
      • 3 rd party rights sometimes abused in-house
  • 31. Business practices for images and rights
      • Asked about how services charge, whether they charge differently to different sectors, what was the purpose behind charging and what happens to the money they gain.
  • 32. Volume of sales (annually)
    • 20% <50 transactions
    • 5% 50-100 transactions
    • 40% 101-500 transactions
    • 15% 501-1000 transactions
    • 20% >1000 transactions
    • One museum reported greater than 4000 external transactions
    • Average completion rates are 86%
    • 88% of education use is for publication
    • Most report a top 10 of images that attract the most attention:
      • example 1: top 100 account for 60% of requests and 90% of revenue
      • example 2: top 10 used 30x more than next 90 in their top 100 list
  • 33. Rights and Revenue
    • All interviewed did their own rights negotiations for non-commercial use
    • 6 museums use an external agent for commercial activities
    • Revenue with external agents usually divided at 50% but 35% also reported
    • Commercial transactions are on average 31% of total volume
    • Revenue recorded for both image and rights activities * :
      • < $2,500 = 14%
      • < $5,000 = 7%
      • < $10,000 = 7%
      • < $50,000 = 28%
      • < $100,000 = 7%
      • > $100,000 = 28%
    • No museum reported significant surplus or profits
    * Based on 14 responses
  • 34. How was the price tag reached?
    • Vast majority of service use is internal
    • Asset fee price tags are usually set according to market prices not the cost of service provision unless new photography
    • New photography is either charged wholly or in part to external requesters
    • In most cases there was no active measurement or accounting of the cost of service provision
    • All differentiate pricing in favour of education and non-commercial use
    • Those that did measure the cost of creation then generally ignored this as differentiating to keep prices low for education/scholars
    • Only 2 reported an internal market where services where charged across departments
    • Most reported that scholars and education were not the slightest appreciative of the discounts
  • 35. Differential Charging
    • 99% of survey respondents charge less for education than for commercial use
    • 1% charge the same for both and differentiate pricing based upon the volume of usage/print run etc.
    • Interview respondents explain the reasons as:
      • to help scholars and education
      • to “profit from the profit made by commercial uses”
      • “ same principle as the graduated income tax”
      • focus upon the integrity of art and thus want education to use the best possible image
      • commercial rates subsidise service costs to enable non-profit rates to be lower
      • Text books are considered commercial by most interviewed
  • 36. How was the pricing structure gained?
    • For 90% by direct reference to the market
    • Most compared prices with the RARIN or ISGM surveys or through informal surveys of other museums
    • A couple just reused a neighbouring museums price structure
    • Most made minor adjustments to enable some direct costs (like materials) to be recouped
    • One made open reference to commercial agents prices
    • Market pricing is deciding at which point on the scale of prices you would like to be positioned in relation to those charged in the market. Many factors drive this choice – lower prices might drive more sales, higher prices might convey more prestige, a mid price might show fairness?
  • 37. Revenue assigned
    • In >60% of museums revenue is assigned outside of the departments delivering the services – usually to the general museum operating budget
    • In most of these cases will show up as a budget line item but cannot be used
    • For the remainder the revenue is assigned back to the department providing the services
    • The highest revenue earners where those where the revenue was assigned back to the service department to be offset or recouped against costs
    • Those with an internal market (even if virtual) were most likely to recoup the most against costs
    • “ it comes to this Dept and I’ll kill anyone who says otherwise!”
    • “ expenditure far exceeds our profits”
  • 38. Offsetting and recouping
    • Everyone wants to recoup costs but almost none claimed to actually achieve or expected to achieve this
    • Internal transactions often account for 50-75% of service activity and is uncharged. Thus recouping from external transactions usually only offsets direct/visible cost items such as contract photography or materials.
    • Even those that claimed to recoup full costs generally did not account fully for salary or overhead costs.
    • Commercial transactions are vital to offset the costs of providing discounted services to education and non-profit sectors
    • There is pressure from senior museum management for all aspects of the museum to make more money – but revenue assignment means that some departments are making money at the expense of others and not sharing those rewards equally.
    • Without clear policy, managerial structures or financial planning recouping costs is not possible.
  • 39. Reasons why – motivations & objectives
    • Why does the service exist?
      • to service internal need – exhibitions, education, collection management, publications, retail etc.
      • to meet the demand from external publishers
      • promote the museum and use of its collections
      • protect copyright
      • support collections management
      • to control the way the art works are represented
      • “ if we do not have a presence on the web then the institution does not exist to a certain extent”
      • “ we want the best possible image of our object to be available for reproduction. We want people to come and see our collections and they wont come if the images they see are ugly”
  • 40. What motivates the pricing structure? (1)
    • to make images affordable and accessible
    • to recoup direct costs and to offset some service costs
    • to charge those who can afford it as much as the market can bear
    • to make it easy to use the collection
    • service would exist even if no revenue due to internal usage thus money not the driving factor
    • some revise prices yearly to maximise academic levels of use
    • Why charge anything at all for scholarly or non-profit use?
      • avoids over use of service
      • many waive all rights fees
      • service must be seen to make some money even if not profitable
  • 41. What motivates the pricing structure? (2)
    • “ image quality is the foremost concern, though we hope to make some profit”
    • “ do not wish to restrict use – have evidence to suggest that price does effect the amount of use”
    • “ charges act as a natural break on the activity level”
    • “ review the market prices and charge slightly lower to encourage more use”
    • prices recognise that “scholars and educational use deserve a lower barrier to access to images”
    • “ to be fair but to be part of the market”
    • “ providing images helps educate the public and reach beyond the museum”
    • “ don’t like to charge people money, it makes me nervous”
  • 42. “ Fair use”
    • Q: Does the museum chase unauthorized educational use of public domain works or is this &quot;fair use&quot;?
    • 90%+ stated is fair use if museum is properly credited
    • All would defend educational use as a good thing but a few interviewees were concerned about losing control over the way the artwork might be depicted and also losing the credit line
    • One museum stated that they do not chase unauthorized educational use but feel it is definitely not fair use
    • Another museum stated that if used in a publication then it doesn’t matter if they are educational or not they would be chased and this would not be considered fair use.
  • 43. 3 rd Party Rights
    • A very difficult area for museums – often controlling their own use is more difficult than controlling external use
    • Dealing with VAGA and ARS is time consuming and quite variable in terms of the licensing deals offered
    • Vast majority will direct the external requestor to contact the 3 rd party directly for rights.
    • About half interviewed will ask for documentary proof of the right to reproduce from a 3 rd parties work before releasing an image
    • The other half do not check on permissions but the onus is on the client due to clauses within the license agreement
  • 44. Rights - problems
    • Risk being exposed where 3 rd party rights are concerned
    • Payment in advance necessary – delays service
    • Not enough resources and staff
    • Acting as agents or intermediaries for artists – have to maintain a good relationship with the artists
    • “ Have to be cleaner than clean as seen as a rich target for litigation”
    • “ Copyright law is complicated and sometimes conflicting and in many museums licensing is the responsibility of staff (like me) who have no prior knowledge of these issues and are learning as they go. The prevailing view at our museum for many years was that because we owned the artwork, we also own the copyright. Although our overall attitude has changed, it is still difficult to get other staff members to understand and take copyright seriously”.
  • 45. Rights - problems
    • Levels of antagonism experienced from clients
    • An assumption that museums should provide images for free – even for commercial uses
    • Making legal judgements
    • Time consuming
    • Quality – if museum is not happy with the quality of publication reproduction then may have to refuse permission
    • Artists and their estates: “there’s three types - the alive, dead and the good and dead”
  • 46. The future?
    • Most wanted to increase the amount of images available or improve access to images through the Internet
    • Many also wanted to get more of their application forms and processes online to streamline requests and workflows
    • Some wanted to move towards print on demand services
    • Many who are using a mixed model for imaging wanted to move to totally digital imaging but resources are tight to buy equipment
    • Funding:
      • 2/3 see external grants and project based funding as only way develop technology and services
      • Remainder will look to internal museum money, revenue from sales and specific fundraising