Fiat Conference Amsterdam 2014: Creating value from your archives; online revenue perspectives and possibilities for cultural institutions

Masterclass 1
Creating value from your archives;
online revenue perspectives and
possibilities for cultural institutions
FIAT/IFTA Conference Amsterdam
FIAT/IFTA | 17 octobre 2014 1
October 23, 2014
Daniel Teruggi: dteruggi@ina.fr

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

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 overlay, semi-transparent advertising strip
covering all or part of the screen for a few seconds
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 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 site
Sponsoring
Contributions
Crowdfunding
High Level E
Storage Service
Annual subscription
Educational E
API revenue
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

Fiat Conference Amsterdam 2014: Creating value from your archives; online revenue perspectives and possibilities for cultural institutions

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Fiat Conference Amsterdam 2014: Creating value from your archives; online revenue perspectives and possibilities for cultural institutions