How to turn digital into earned income
1. Changing Landscape
In 2020, I found that my inbox was engulfed with invites to digital cultural experiences. From major institutions broadcasting productions; local museums hosting virtual talks with curators; and ballet companies creating work in their homes, there was a plethora of opportunity for me to have a cultural experience from my living room, kitchen or even in the bath.
For organisations, this aspect of the covid-19 response presented new opportunities for audience development – 2.5 million people streamed One Man Two Governors presented by the National Theatre in April 2020 in a week (equating to full houses at 2,500 shows and generating £50,000 in donations). However, as many organisations have since found, as a long-term business model it is unsustainable.
As the pandemic has rolled on from months into years, the sector had to face the reality that whilst digital streaming is popular, it doesn’t translate to the equivalent box office returns. Organisations like the National Theatre that have been delivering NT Live since 2009, have the infrastructure in place to produce this type of work. But even at this scale, founders of Broadway HD, a US-based Theatre on Demand company estimated that filming a Broadway Musical with similar technology and including distribution rights would cost between $2–$4 million dollars.
Similarly, at a local level, digital content such as talks and workshops were great opportunities to test pay what you decide and donation models, but they generally haven’t been financially self- sustaining unless underwritten by a grant or similar.
For funders and organisations alike, the question remains: How do we justify investing in digital at high cost, when the likely returns are minimal and when audiences still expect digital content should be free or minimal cost?
2. Digital adaptation = profit?
Digital adaptation on its own doesn’t tend to translate into profit and it might not need to
Pivoting activity to be delivered in a different way was a very immediate response for a number of organisations in the sector, and as time has gone on, things have gotten better and better. The Albany, an arts centre in South East London, turned its weekly older people’s programme into a radio show; and Marketplace, the Creative People and Places Programme for Fenland and West Suffolk delivered a range of different activities for remote rural communities online. These were hugely effective, low-cost ways to connect with audiences but by the nature of those audiences, it can’t necessarily be monetised. In this sort of work, those organisations were meeting their public benefit agendas by engaging with communities in the best and only ways that they could and in these examples digital is a means to an end.
For some, however, Zoom fatigue set in and consuming culture in this way no longer seemed attractive.
3. More than just digital
There is a wider risk of organisations taking on a solely digital delivery role
The Greek Art Historian Professor M. Scaltsa recently authored a paper suggesting that digital programmes for culture focus 90% on digitisation itself and only 10% on the essence of what is being digitally conveyed (Scaltsa 2020). He went on to say that restricting the perception of culture to its digital reproductions would lead to the reduction of a whole range of different components that make up the world of live art.
Of course, this is true, there is no replacing the feeling of experiencing something live in the virtual world. Whether it is the buzz of lights down at a performance, or the smell of a heritage collection, we are conditioned as humans to thrive on physical interaction. The experience of the last two years has highlighted the value of exactly these experiences when other liberties are removed.
Moving into Phase 2 and Phase 3 of the pandemic, it became increasingly apparent that digital culture alone was unlikely to cut it. Moreover, organisations who were able to seamlessly morph between live and digital experiences had a distinct advantage in the changing tides of lockdown.
4. Think long-term
Audience development can translate into income, but it’s a long-term game
The Getty Museum Challenge, where the museum asked visitors to recreate famous artworks using objects found at home was replicated by a number of smaller organisations and again built profile and digital capital. As opposed to trying to grow earned income through this activity, it highlighted culture as a potential source of humour for new audiences and this enabled a growth of new donors on the back of digital outreach.
These activities, while not translating into major income in the short-term, they did demonstrate the relevance of these organisations at a time when profile was essential. International audiences who, at the time, were unable to travel freely and easily, will remember said organisations as they begin to travel again.
5. What now?
As we transition into a post-Covid era, we can see how digital delivery has become a mainstay of the ongoing approach of organisations beyond the pandemic. Effective monetisation of this requires thinking through, and a solid approach might be for boards and staff teams to consider balancing what can be achieved through both face to face and digital interaction.
In 2020, I suggested that arts organisations looking to integrate digital delivery into their business planning ask themselves the following questions:
- What is our best mix of live and digital activity?
- What has worked and what have you learnt from operating differently during this time, and how does this inform your future plans? Is there other technology you need to deliver this work more effectively and can you fundraise for this?
- Is the activity you are delivering intended to generate income, or does it serve a different purpose?
- Do you fully understand the cost of your digital activity? What do you need to earn to break-even and what is the profit margin you are aiming for and over what time period?
- If your digital activity is generating an increase in revenue, how will you sustain this beyond having to deliver work this way?
- How are the needs of your virtual audiences different to your in-person audiences and how can you manage these simultaneously?
Of these questions, what have you reflected on already, and where do you still have areas for development? Has your organisation been able to profit from both routes – live and digital?
Looking back over what is now a two-year period, we now have plenty of data which indicates just how seismic the influence of the covid-19 pandemic was upon the cultural sector. If there is one overall conclusion to be drawn with regards to digital engagement it is this: business models that embrace a hybrid strategy are likely to fare best. A final warning to the cultural sector comes from the researchers at the Centre of Cultural Value: “Digital innovation can make a positive difference, but only when embedded in a long-term strategy of audience…engagement.”
Digital innovation can make a positive difference, but only when embedded in a long-term strategy of audience…engagement.
David Johnson, Director of Strategy and Programmes, Cause4
This article was originally published via the Arts Fundraising & Philanthropy Now, New and Next publication (Spring 2021). It has been updated to reflect more recent changes, developments, and research.
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Except where noted and excluding company and organisation logos this work is shared under a Creative Commons Attribution 4.0 (CC BY 4.0) Licence
Please attribute as: "How to turn digital into earned income (2022) by David Johnson supported by The National Lottery Heritage Fund, licensed under CC BY 4.0
