To sell or not to sell?
This IETM toolkit aims firstly to clarify the key concepts and definitions related to business models and business models innovation, possibly overcoming prejudices in the process; it then proposes a business model canvas tailored to the specific characteristics of arts and cultural organisations, and illustrates how some cultural organisations across Europe have successfully innovated their business models.
2.1. CULTURE AND BUSINESS
Over the last years, we have witnessed a significant shift in the European economy. The general economic downturn has also impacted the public support of arts and cultural organisations
through policy changes, funding cuts, etc. The vulnerability of the sector has been exposed. Funders started to call cultural players to embrace certain concepts and practices from the business sector as a way to reduce their dependence on public grants. This is where the concept of the business model comes in, introducing the apparently taboo word ‘business’ into the cultural sector. Many cultural organisations react adversely to this concept, proclaiming that they are not businesses, and therefore business rules shouldn’t be applied to their work.
However, the truth is that behind the term ‘business model’ lies a very useful conceptual tool for any organisation, no matter whether it is a business enterprise, a social company or a non-profit organisation. If an organisation has a way to create, deliver and capture value, it has a business model.
And the most important characteristic of a successful business model is that it is viable and sustainable. Non-profit organisations and for-profit organisations alike need to provide their users with valuable services and products. Besides they have to be accountable to their funders: governments, foundations or private donors. Having a well functioning business model definitely helps.
All organisations have a business model. It might just happen that it hasn’t been explicitly designed, but rather adopted by unconsciously copying models from other organisations in the same sector. This practice was quite common during the industrial era, in which business models were perpetuated until a significant change – in most cases technology-driven – materialized and changed the playing rules of the sector. In the past, business models were taken for granted, and most of the organisations in the same industry used the same business models. For them, it was not important to explicitly design business models, even if implicit business-model innovation brought significant advantages to some companies.
Download the guide to read more:
To sell or not to sell? An introduction to business models (innovation) for arts and cultural organisations