Watershed Business Model Case Study

Introducing Watershed

Watershed is a social enterprise and a registered charity in Bristol. It was founded in 1982 and declared itself to be ‘Britain’s First Media Centre’.

It is the leading film, culture and digital media centre in the South West. It advances education, skills, appreciation and understanding of the arts with a particular focus on film, media and digital technologies.

Watershed produces and presents original ideas and content and curates a diverse programme of talent development, cinema exhibition, events and festivals.

Watershed occupies the first floor of a historic Grade II listed building at the entranceway to Bristol’s Harbourside. The building contains three cinemas, a cafe/bar, flexible conference and events spaces and a research space called the Pervasive
Media Studio.

The organisation had a turnover of £4.9 million in 2014-2015.

The 'Unbundled' Business Model

Watershed is an example of a medium scale partially ‘unbundled’ business model, which is relatively rare in cultural organisations. It is a group of three companies: Watershed Arts Trust, Watershed Trading and iShed Community Interest Company. The three companies
operate together within a common values-led brand.

Structuring the business into related companies helps avoid unnecessary trade offs between different types of activity. Each company has a particular function within the overall business model, presenting a distinct offer to complementary Customer Segments.

The group structure allows Watershed to operate beyond the confines of the charitable remit of the Arts Trust, inhabiting a commercial space at the same time. It has also meant that the organisation is less frequently criticised for being ‘too commercial’. It has given a wide range of funders increased comfort that their desired outcomes will be delivered by the relevant aspects of Watershed - be that public value-driven arts funders,
innovation funders interested in business return or academic funders.

It has also helped create new opportunities. iShed led to deeper partnership with Hewlett Packard and with Bristol’s universities and business sector. This ultimately led to the creation of the Pervasive Media Studio, which is a physical manifestation of the new approach.

Each of the three companies has its own Board with expertise appropriate to the needs of that company. Watershed’s Board governs the Arts Trust, which maintains the Group overview. A Chair’s Coordinating committee brings together the chairs of the Arts Trust,
iShed and Trading company boards. This committee provides a vital link between the individual boards ensuring that the Group remains a consolidated unit with shared vision and values.

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Watershed Business Model Case Study (PDF)