18 February 2008

What will people pay for online?

As a former economist, I have long been interested in the new economic or commercial models that are emerging on the web. Many of us will be familiar with Chris Anderson’s “Long Tail” description of the niche marketing of online stores like Amazon. Well, here is another theory. It comes from another respected web pioneer: Kevin Kelly (who helped launch Wired Magazine and is still a board member of the Long Now Foundation).

Kelly has recently written up a post called Better Than Free and in it he offers us “eight generatives” that people will still be willing to pay for in the new web environment (”a copy machine”) where so many copies of everything are now available somewhere for free (eg. peer-to-peer networks, not that I’d have any idea what they are for!).

What he says is that even when some product or service is available for free, we are probably still willing to pay for it elsewhere when it is surrounded by or within an environment characterised by these qualities (which can’t be copied, cloned, faked, replicated, counterfeited, or reproduced). Here is a quick and dirty summary of Kelly’s article with my comments about how each one might apply in the museum world, in italics:

  • Immediacy – Eventually you will be able to find a free version of just about everything somewhere, but it could take sometime. People still pay a premium for special air delivery import magazines, so in much the same way we value getting a copy immediately delivered to our inbox as soon as it is released, requested or created. Digital downloads by subscription where applicable and possible.
  • Personalization — Generic versions may well be free, but getting something bespoke will always be something that some people want. Offering products like hand-crafted digital prints, very high resolution objects, or rare special copies/facsimile editions may be well received.
  • Interpretation — "As the old joke goes: software, free. The manual, $10,000. But it’s no joke." I'm not sure how this applies to us because for many museums, particularly in Australia, although we have bucket loads of interpretation, the general expectation is that we provide it, as well as most quick reference services, for free online. Perhaps we need to look at paid subscriptions for well-written online publications?
  • Authenticity — "You’ll pay for authenticity." Again, we can offer very authentic material and already have this advantage. More, better branding?
  • Accessibility – "Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. Many people, me included, will be happy to have others tend our “possessions” by subscribing to them." I'm still not so sure about this generative: in some ways, we can get web services like del.icio.us and Google Reader to do such things for us, like looking after our bookmarks/favourites and blogs (respectively) for free. It also doesn't seem to be named that well.
  • Embodiment — "At its core the digital copy is without a body. . . . The music is free; the bodily performance expensive." For museums I think this is about what else we can offer in terms of paid programs or experiences. Generally, major museums and galleries in Oz, charge only for special/imported exhibitions or "blockbusters" (except us). Perhaps it means selling or charging curatorial talks on the talks circuit. I do a few of those in relation to our Lawrence exhibition and a few other things, and so far they are all free!
  • Patronage — Audiences probably want or at least don't mind paying creators. "But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators." This applies universally for creators, including us, but we probably need to pay more attention to making payment easier and reasonable.
  • Findability — "No matter what its price, a work has no value unless it is seen; unfound masterpieces are worthless." I like this one a lot and it is probably one of the most relevant to our cultural world where such a large percentage of our collections is not on permanent display. It should not be too hard to highlight, find and get our products and services - not too many gates or complicated registration.

Some of these eight qualities apply to us more than others and a few could be better described or have a different descriptor applied to them (like accessibility?). To the list I’d probably add trust and, like one of his comments says, usability. Most cultural institutions are trusted and we can take advantage of that, but usability isn't really a major focus - think of most of our unfriendly catalogues and systems.

OK, so I might occasionally use a peer-to-peer network for some music and films that are either impossible hard to get or far too expensive in Oz, but I also download a lot of material for a fee from iTunes and I’d agree that the reasons I do this are pretty well mapped out above. If we are to come up with a decent model to make money or even recover costs for certain products and services on our museum websites, we need to very carefully look at this article.

1 comment:

Seb Chan said...

Hi Mal

I've been meaning to post something very similar on Fresh & New for ages. Whilst I am very hesitant to subscribe to the notion that cultural institutions need to 'pay their way' or be businesses, as far as NEW business models go here's some additional thoughts on the how the Kevin Kelly notions might apply to the cultural sector -

1. we lose out on Immediacy - Wikipedia beats us hands down almost every time (and perhaps we'd be better off contributing to Wikipedia!)

2. we've been very slow to take on the opportunities of Personalisation as you mention - the high quality limited editions etc. This is something we can do very well but we may have supply chain issues that are out of our control. See for example the problems around licensing out the manufacture of branded museum products around the world.

3. Interpretation IS somewhere where we can make headway but it requires charging for 'more than basic' research requests or at least a costing of the charges that are offset by providing the service on a subsidised or free basis. Private research services do this very well and the cultural sector has been very hesitant towards entering into this space - even with fee reductions or free services under equity schemes.

4. Authenticity is what we trade off now and it relates directly to 'trust'. We trade off this in the physical world and to a lesser extent online - mainly because our online brands are not as well developed or strategised. We could do a lot more here and it really relates to our ability to offer 'premium research services' as in #3.

5. Accessibility is hard to apply to museums. What we have is not (yet) an on demand kind of resource in the way that music is ("oh whats that tune that goes . . . " "i'd pay $0.50 to hear that right now")

6. Embodiment. This is our bread and butter and it has been very interesting to hear some of the issues that some UK museums are having now that the expectation is that their 'embodied experience' is free. What the real challenge is to make the embodied experience as responsive to the demand of online interest as possible - be this through open storage, quick response exhibitions (pop the HMAS Sydney materials out on public show as the news stories break), or public programmes and talks. There is often a big disconnect between the expectations of access we set up with our online materials and the reality of their provision to our through the door visitors.

7. Patronage. Again, museums in countries where philanthropic funds are more plentiful understand the importance of linking their online content to the 'opportunity to pay' through donations etc. In many ways our patronage is through government funding and unless our reporting structures and strategies change to reflect the new digital environment we will continue to find it difficult to connect online and through the door figures.

8. Findability/usability. You are spot on with this. Traditionally we have been very lax at making our resources easy to use. We've taken enterprise systems and made them public with an expectation that the public will have the same ability to use our internal systems as we or other specialists do.