Making Digital Work: Business Models

Business Models

It's hard to imagine a time when pressure on the bottom line together with competition for attention have ever been as great as today. All of which means that across all sectors and all industries, both incumbent organisations and dynamic startups are searching for new, innovative and sustainable business models which can create the revenue that is needed both for health and growth.

The arts need not be any different. We have seen the emergence of new distribution channels for performance and other content, for screens big and small. We are seeing theatre become more game-like and video games become more theatrical. Business model innovation is both challenging and potentially very rewarding.

Distribution and business models is one of the major learning themes from the Digital R&D Fund for the Arts, and work to date has mainly involved content with different distribution models being explored. You can build a platform to distribute it or use one that is already waiting and ready to distribute it for you. The decision of which way to go is not just about money - if an audience is already finding content somewhere, piggy-backing onto that platform will allow you to be exposed to that audience.

What is a Business Model?

Despite being very widely used, business model can be a confusing term. This is mainly because it is used in two different ways. The first and most common - although technically incorrect - use of business model is as a synonym for income or revenue. This results in the business model conversation being conflated with that about revenue and funding and by extension, funding uncertainty. For example, when someone says 'let's explore new business models' this is often thinly-veiled code for 'we have a hole in our balance sheet and we need to fix it'.

While income is certainly part of business model thinking, if we make them exactly the same thing then by default business model innovation becomes all about making money. In fact it is bigger than that and not always the primary reason why organisations engage in innovation. The influential US-based Nonprofit Finance Fund have their useful iron triangle concept which says that when assessing business model change you have to recognise that not only is the money affected but so too are the mission and the operating model.

Download the guide to read on:
Making Digital Work: Business Models (pdf)