Funding challenges see local authorities adopt more entrepreneurial approaches to boost museum revenues and drive cost-efficiencies
16 May 2017
In the first blog in this three-part series on local authority-managed museums, we examined the context in which today’s museums are operating, the growing need for local authorities to take a hard look at the benefits their museums deliver and at the options for sustaining them at a lower cost. Often there may be unexploited commercial, technological and partnership opportunities that can be tapped into to drive revenue, help with cost efficiencies and develop different ways of working.
The funding challenges of the past few years see museums transitioning to increasingly entrepreneurial approaches to boost their income from other sources. Catering, retail and venue hire have been expanded, membership schemes set up and admission fees introduced for special exhibitions, historic sites and events. However, while such changes in operation mean museums now earn a greater proportion of their own income, experience shows that they take time to achieve their full effect and are rarely sufficient to cover all the costs incurred by a museum.
Museums are therefore having to become even more innovative when it comes to generating income:
When it comes to considering cost efficiencies, museums are making greater use of technology[i]. Whilst in some cases this might mean lower cost, technology can also offer a way of enhancing visitor experiences or reaching new markets without incurring additional cost. Initiatives range from setting up simple Twitter accounts to digitisation of entire collections, as well as putting ticket sales online and offering audio guides instead of guided tours. Recent examples of technology innovation include Kendal Museum’s launch of a new website showcasing its digitised collection of minerals and pressed flowers, and the ‘Lost Palace of Whitehall’ virtual reality experience run by Historic Royal Palaces[ii]. The British Museum recently launched new audio guides to enhance the visitor experience, including a ‘digital souvenir’[iii] that visitors can send to themselves. Meanwhile, the Museum of London is looking to foster such innovations through a programme to help other museums explore the possibilities of digital technologies[iv].
Indeed this is just one of many collaborations that museums are now embarking on. Such partnerships are seen as a way of widening access to collections, sharing skills and knowledge, and tapping into new commercial opportunities (either revenue or cost focused). Many of these initiatives have digital technologies at their heart but often include working with community organisations, artists and universities. Collaborative working can help make the most of the expertise available in both national and non-national museums, through activities like strategic training programmes, joint apprenticeships and shared digital projects.
For example, National Museums Scotland provides knowledge and skills training[i] for Scottish museums in areas as diverse as pest management, bidding effectively at auctions and managing Egyptian collections. And SHARE Museums East[ii] helps museums across the East of England share and develop skills in topics ranging from economic sustainability to collections management, audience development and leadership.
For a museum to realise any of the revenue and cost opportunities we’ve highlighted, it’ll need to have the right mix of skills. These are essential to ensure the museum can take commercial approaches, engage effectively with audiences and build partnerships. Museums’ use of external providers has traditionally been limited to back-of-house functions such as catering or cleaning, waste management and pest control. Going forward, accessing the right skills may increasingly involve extending the use of third-parties to handle a wider range of activities. Of course many local authorities have been doing this for years with their sports facilities, but currently there are relatively few third-party organisations with experience of operating museums in their entirety.
Overall, the direction of travel in museum operations is clear: towards a more entrepreneurial and open approach characterised by wider and easier audience access (often via digital technologies), new commercial revenue streams, and rising use of partnerships. Alongside these actions to reduce the financial burden of museums within the existing ownership structures, museums have been looking at different delivery models.
One increasingly popular solution is converting to charitable trust status – an option that we’ll examine in detail in our third and final blog in this series.
[ii] Source: http://www.hrp.org.uk/news-and-media/press-resources/banqueting-house-press-releases-and-archives/a-hidden-history-discover-the-lost-palace-of-whitehall/#gs.FZxgLoQ
[iii] Source: http://www.britishmuseum.org/visiting/planning_your_visit/audio_guides.aspx