Notes from the Business Models workshop. 4/23/09, from 9:30am to 11:30am.

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[Note: Yellow text signifies things to highlight/elevate. Green text signifies Action Required. M.E. 4/24/09]

- - - start of workshop, recitation of process - - -

(Leo Mullen) Extra credit question: Today, the Smithsonian Institution is predominantly a Government Sponsored Enterprise (GSE) with the majority of its funding derived from federal appropriations. Now, transport yourself 15 years into the future...2024. To what extent will that future SI still be a government sponsored enterprise, or to what extent do you believe that SI will have become an entity whose revenues are largely derived from self-generated initiatives?

Think about the automotive industry, financial service institutions (Wall Street)...
Times are changing. Business models are changing.

Leo Mullen Q: What do we mean by "business model"?

  • [attendee #] 68: processes of economic, work flow, relationships to get the job done. We have a complicated, diversified system here. Budgets aren't together to do centralized initiatives.
  • define product, and the infrastructure to produce that product.
  • (Leo) Usually, on the outside it's defined as framework for creating economic or social value

Q: SI creates an enormous amount of social value. How does the SI create economic value?

  • an informed public leads to more informed employment sector - people filling jobs with broader view. Enhancing the work force. [As a world renowned educational and cultural institution, the Smithsonian has the capacity to contribute greatly to the creation of a more informed, educated, and engaged citizenry - a citizenry that self-identifies both as citizens of the nation and as citizens of the world. It also holds true that a more informed population will impact the economy in positive ways. A more enagaged and educated poplace is more likely to vote, to participate in civic activities, to volunteer, to hold steady jobs and to excell in the workforce, to pay taxes, and to contribute generally to a lively democracy and a dynamic economy B.Pfordresher.]
  • 39: people come to DC by plane, stay in hotels, [eat in restaurants,] buy in gift shops [SI provides significant support for the DC economy by being a place for the public to visit. Has there been any study done of the economic value provided to DC by the Smithsonian? Is there a difference between the bricks and mortar economic value of the SI and the virtual value of the SI and which is being discussed herel? 39]
  • spender of taxpayer funds
  • [We should look at the economic and societal value from our scientifc endeavors as well. PSmith 5/5]

[After the fact, I would also ask: How does SI create social value?] [see article by Stephen Weil, "Are You Really Worth What You Cost, or Just Merely Worthwhile? And Who Gets to Say?" Weil states, "... A museum, like any organization—just like the button factory, even—must be attentive to its revenues and expenses. What makes the museum so different from the button factory, though, is the inadequacy of those terms to define its success or failure. For the museum, the bottom line must always be a programmatic outcome, not a fiscal one...." 39:4/24/09]

Q: SI's current business model - what are the attributes?

  • We have Smithsonian Enterprises, museum shops, etc. We don't have a cohesive business model [across the Institution.]
    • I'm not sure, but I don't recall seeing a cohesive pan-Institutional marketing plan, fundraising strategy, educational outreach strategy, membership plan, or customer service management plan either. [Smoot, 5/11]
    • I'd suggest that we all need to know more about the "assigned" role of Smithsonian Enterprises and its relationship to the rest of us, i.e. don't many staff believe it is SE's role to make money for the Trust side, while the role of the SI units who receive Trust funds have the role to spend it? [Smoot, May 11]
* People come here to see collections, research translated into educational programs
  • there are pockets across the institution where people are finding ways to generate revenue. Digitize images - leads to funding programs. Might not be cohesive, but it's happening. [Selling digital assets may also not be cost effective if we capture all of our internal costs. Need to study this. PSmith 5/5]
  • Cooper Hewitt - charges admission. It's the reverse of most other museums - they raise 70% of operating funds - only 30% from fed. Try to be entrepreneurial. Most assume fed provides support, but not true.
  • Look around to see who's funding museums across the nation. SI's largest funding comes from government, which puts a twist on things.
  • SE delivers 180 mil revenue back to the institution comprised of 3 operating units: retail, food and beverage, catalog, iMax, etc. Media properties (book, mag). Consumer licensing. [Raising funds is good, can the business model also include SE providing services to the Institution in areas where they are uniquely qualified? PSmith 5/5]
  • Other entities exist - SI associates, other pockets within larger bureaus... 80% are fed employees, 20% trust funded employees. Have to go out for sponsorship dollars.
  • Fundraising, writing grants = revenue for organization. Good size development team. Some units don't have opportunity to seel what they do.
  • SI folkways - regard themselves as a program based on a collection. One federal employee. Close to 100% supported by self generated revenue. They make CDs commercially, print-on demand. Give away a lot of stuff - download music and videos for free. They like the fact they raise their own money.
  • If charging admission, you end up relying on admission funding.
  • [Interesting that no one mentioned membership. Contributing Membership, as an example, has a wonderful business model that combines membership benefits & fundraising to move "contributors" up the membership level ladder. I'd also guess that about 30%-40% of RAP revenue comes from membership dues. RAP doesn't have a premium membership; RAP members can upgrade to in-town CM membership. Smoot, 4/27]
  • [Just to complicate things a little further, at the Zoo we also have Friends of the National Zoo (FONZ), a non-profit organization dedicted to supporting the Zoo. FONZ handles the Zoo's development, merchnadise, food service, membership, and delivers the bulk of the education services including the volunteer programs. Rob Madill, RM, 4/28/2009]
  • [Re: Membership. There are three pan-Institutional membership programs - Resident Associates, Contributing Membership, and National Associates. Many museums have memberships as well. The degree to which these are online varies. Contributing Membership raises unrestricted support SI and we have been working over the last three years to increase the level of integration between the offline (direct mail and telemarketing) and online fundraising. VH, 4/30/09]
  • [Online fundraising in general is still a new concept at the Smithsonian. Almost all the museums now have a way to process donations online (almost!). In 2009, at the very least, having a big Donate Now button on your unit's homepage should be a given, but it's not. Sometimes the issue is that there is not a staff person at the museum who sees this as a priority and wants to speak up to make it happen, sometimes it's a budget issue, sometimes there is push-back about putting fundraising front and center on the website. And that's just the very lowest hanging fruit. It's the bare minimum that every unit at SI should be doing. VH, 4/30/09]
  • [Don't forget inkind donations especially when it comes to technology. When someone contributes technology that helps our virtual presence, how do we recognize them. It's not like an exhibit which SI has a planned approach. We need to develop equivalent guidelines for technology donations that empower our virtual presence. PSmith 5/5]

Q: Revenues are coming from a lot of different sources. How well is this model working?

  • We're in the mode of recovering costs: not investing in future growth. Always just to cover what we're doing today.
  • Air & Space: events program with fairly good revenue stream for the museum. This works in that environment.
    • People are doing whatever works to make revenue, but no overarching model that could work for everyone.
    • [Could we say that we are opportunistic, rather than strategic? M.E. 4/24/09]
    • [This bullet may need further explanation. I suspect the speaker was referring to "special events," where the museum is rented out for the evening, rather than a public lecture type event/program. I think the public lectures at Air & Space are all free, which BTW, certainly competes with paid programs produced by the Resident Associate Program. Smoot, 4/27]
  • [Decisive statement from the back row, from a senior CFO type person] Our economic model is broken. We primarily rely on one federal source. Think of all the things we're not doing because we don't have the funding. And what we are doing that we shouldn't do. We have one customer [congress] - you have to cater to that customer. [39: Is Congress the customer or is it the American people? Who are the SI's customers? If the SI were abolished and its collections redistributed across American, how would this impact the city of DC? If the customer had to pay $50 for adult admission for a day at the SI or purchase a $100 family pass, how would this impact the revenue generated from meals, hotels, and other activities the customer would have done if they had not had to pay so much to be at the SI? The model requires more sophisticated analysis.4/24/09]
    [There is an interesting phenomenon in that when something is free people expect everything to be free and resent to varying extent having to pay for anything. Where as when charged admission, people do not mind paying for other items as much. We've seen this in comparison with other free zoos vs. the ones that charge. RM 4/28/09]
    • Business model needs to be diversified. We don't deliver value to the general public so that they could help start funding.
  • (M.E.) I want to emphasize that last person's point: We're not doing things we could and should do, and we are doing things we ought not to do because of how little money we have to work with. [39: How do we know that we are doing things we ought not do and if so what are these? 4/24/09] [One example of something we shouldn't do is license access to images that are most likely in the public domain. We do it because we're desperate for the revenue. Another thing we do that we shouldn't is duplicate effort all over the Smithsonian for infrastructure elements (like e-commerce platforms, CRM) that we should be providing centrally, but can't because we can't afford it. M.E. 4/24/09]
    • [We're like the working poor: we don't have enough money to buy a bus ticket to a job interview. M.E. 4/24/09]
  • when we're taking fed funds, we're hamstrung. Money is released in April, and then it's a spend spend spend situation. Backlog throughout the rest of the months. We don't have the timeframe to do what we want.
  • If public comes to us directly, why does it have to be cycled through government process.
  • 61: [many museums] accept voluntary/suggested donations from public, would be a good thing to do. Doesn't stop people from coming into the door if they can't afford it.
  • 68: Web can be an important part of this business model - move beyond DC. We can be America's museum, reach out to everyone. America can fund us. Web is a part of the way to fix this model.
  • Q: does anyone know how much revenue is given via voluntary donation boxes at the entrances of some SI museums?
    • not a lot. Most are shocked to know we're free, when others expect that we're free.
  • Web is not going to fix our financial problems. [What are your sources for this statement? 39 4/24/09] [Source is the fact that we've got a $2.3B unfunded obligation for building maintenance. M.E. 4/24/09]
    • It can be part of the idea.
    • Most are still trying to figure out financial models on the Web.
    • [Assertion: we're never going to get Web and New Media to be fully self-funding. M.E. 4/24/09]
  • [I'm reminded of wisdom given to me by C.L. at Smithsonian Enterprises: Building successful revenue streams takes t-i-m-e. M.E. 4/24/09]
  • 122: educational materials are given out for free. If we start charging, is public going to be angry? Risk. [If we start charging, can their dollars buy them something better elsewhere? PSmith 5/5]
  • [Business model needs to be evaluated and planned pan-Institutionally such that all the pieces fit together. Right now acquiring and spending funds is fractured. PSmith 5/5]

Q: How important is the Web to Smithsonian?

  • 77: extremely. Constantly evolving. Younger generation. Becoming more dependent.
  • [Our problem is that what we do is expensive.] If we want to be a Ripley's with no context/research behind what you're doing, you can charge [and make a profit]. When American people can't afford us, government can still support us. It's the stuff behind our museums that we get respect from the rest of the community. Supporter of federal funding. (Folkways disagrees.)
  • Get ourselves out of habit of thinking that that we're just a non-profit. Think about what successful corps are doing - McDonalds, Google.
    • [I'm reminded of something Eunice Kennedy Shriver, CEO of the Special Olympics, said about her frustration with the low level of ambition/expectations held by many in the non-profit world:
      "I felt frustrated by the widely held perception that growth was not a relevant challenge for organizations like ours...that we were the kind of people that did nice things, but we couldn't grow and double our revenues every two years like those smart business guys could. We needed to create a sense of urgency an develop a more entrepeneurial spirit." (from Gary Neilson and Bruce Pasternack, Results, p169) M.E. 4/24/09]
  • 2 areas to work on: priority setting at unit-level and centrally; and collaboration. Duplication of effort is frustrating. Competitive world regarding fundraising. Competing with other units.
    • [Action Required: Collaboration keeps coming up around the strategy discussions. I really want to know what this means - - what do we mean when we say collaboration? M.E. 4/24/09]
    • [In some cases it means perforating or jumping over internal silo walls. When SI units compete with each other, the silo walls can be pretty thick! Sometimes it is easier to collaborate with external organizations than it is to collaborate with another SI unit. Smoot, 4/27]
    • [A wonderful example was the RAP/Natural History collaboration in producing the Sustainable Seafood seminar with Alton Brown and 20 or more local chefs on March 20/21; an offshoot of the new Ocean Hall exhibit. Smoot, 4/27]
    • [A new example, Smithsonian Folkways giving a 10% discount to RAP members on Folkways digital & CD recordings. RAP promotes Folkways sales and gives members a good benefit to help encourage membership & build Smithsonian patron loyalty. Smoot, 4/27]
    • [Sometimes it's as simple as another program or unit having personnel with skill sets that could complement another program's capabilities in a way that would yield new and interesting collaboration. The main hurdle is the lack of communication and internal mechanisms (besides just being at SI long enough to know who to talk to) to drive even the most obvious collaborative initiatives. G.S., 4/30]
  • a lot of talk about content. To Folkways point, yes you make a lot of money online, but it's not just because you're online. You have something valuable. Our expertise in interpreting info and packaging it could generate revenue / become a business model.
    • [Observation: we often look at Smithsonian Folkwaysand say "see, that SI unit can generate a lot of revenue and still stay true to mission" with the guilty feeling that those of us who haven't done this are inadequate. But we've got to remember that Folkways was founded (albeit in a very enigmatic way) back 1948 as a profit-making venture-- Folkways Records & Service Co. Most of our other collections were not founded as commercial enterprises, and don't yeild quite as easily to revenue-generating solutions. M.E. 4/24/09]
    • [I would disagree with an assertion that the only way to bring this kind of mentality to SI successfully is to import/integrate cultural quasi-commercial entities. Entrepreneurial set-up need not be established at onset to be activated. If nothing else, where SFR and SGS are seen as SI success stories, perhaps Folkways should host mini-symposium to educate decision making staff about methodology; detail such staff part-time to SFR (project appointees) to inculcate them in entrepreneurial outreach practices which remain mission-consistent. - Falk 5/6]
    • [Also, content for web ventures can be crowd-financed as well as crowd-sourced. I'm a firm believer in SI staff id'ing & spec'ing interactive communications tools for use by all art/culture/history/science orgs, including how they would be used, and then moderating, cheerleading, and brokering the public development. It's like Marc Bretzfelder says, let's stop reinventing in favor of using and perfecting. SI can and should lead these initiatives, and seed their popularity through use by its own staff. And keep that micropayment donation vehicle prominent! If Jingle works at all, it might be worth piloting. A stronger pilot might be to publish a Smithsonian flickr-linked wiki page as an online exhibit space (something devoted to material culture of a craft like quilting might be a relatively "safe" place to start). - Falk 5/6]
  • 53: (intern) - she had a different idea prior to working here. Expertise and respect for SI is based around fact that SI is America's museum. They feel connected to the museum even if they don't know anything about it. They think SI is one building. Majority of public doesn't know what's going on here. They're not exposed to it.
  • 54: (intern) - others don't know the fascinating things going on at the museums, and the research.
    • [This is a recurring theme: "we dont' know what's going on here" - - needs to bubble up to the top. M.E. 4/24/09]
    • [I think we should "Surrender Dorothy" and become the monolith the vast majority of the public seems to think we are--at least as far as the Main/Home website is concerned. A la Wikipedia, the Smithsonian main webpage should frame the item of interest generated by a search for information. Part of the hard work of this approach will be selecting or developing a behind the scenes way to code that interest so that it translates to specific facilities, events, collections, etc. For instance, there is a 17-page document showing all the department codes (a six-digit number) for all units at SI. If a coding system that allows multiple keywords per department code could be developed, you could get statistics that could be used not only by Web & New Media staff, but by Budget, Finance, Human Resources, etc. staff as well. The SI frame could have items like 1. Museums, 2. Research Centers, 3. Collections, 4. Support/Donate, 5. Games, 6. Licensing, 7. Shop Online, 8. Upcoming Events, 9. Volunteer!, etc. Also, if the behind the scenes coding is in place, the first tier of selections from the frame would be related to the information that brought the visitor to the website in the first place. R.H. 5/1/09]
  • a lot of the research belongs to the public. It's not a product you can go out and sell unless you repackage it somehow.
    • [Why can't it be repackaged, esp. digitally? It probably is for the academic community; maybe it also needs to be packaged for the masses. Best way to distribute the packaging is via membership, which can easily be segmented by topic of interest. Smoot, 4/27]
    • [Just learned that the OPA print publication Inside Smithsonian Research has been discontinued. It is a great example of repackaging research/news for the masses. The announcement states that this is due to "The explosive growth of new communication and social networking tools in recent years presents many opportunities for the Smithsonian to share its collections and resources with people around the globe in ways not previously possible." No mention of a specific new digital publication or whether or not it will be free or available for a fee or for only higher level SI members. The print publication was sent to higher level CM members. Smoot, 4/28]
    • [I think genuine transparency is the key here. If you let people see what you're using and the context and ways in which it's being exploited, then assuming you're behaving as a responsible and competent steward, they'll get on board. On the design and use side, do IMA-style dashboards to accompany 5 or so representative SI sites and invite direct on-dashboard feedback to engage discussion among designers, researchers, and educators about how their expectations and desires for content delivery play off against how people actually seem to be accessing their content? This kind of initiative should be widely publicized (at least initially) via blogs, Facebook, etc. so that folks are tuned into where to go. You could even generate a bit of buzz among the right community by letting them preselect the sites they're most interested seeing dashboarded. - Falk 5/6]
  • depends who you're talking to at any given time. Passionate people who want to get content on Web, but SI needs to commit and reallocate resources. Make units more nimble in terms of how we get our content out there. Also a PR and marketing problem. We don't market the institution as a whole. All the specialities of different units makes us unique, but we're not doing a good job letting others know what's going on. Media outreach, like RSS feeds, making content viral.
    • [Yes, what SI unit has been assigned to "market" or "sell" the Smithsonian as a whole? What does their marketing budget look like? Smoot, 4/27]

Q: How much does SI invest in Web technologies per year?

  • 12 mil...?
  • don't have an answer to that question.
  • Leo: As they say, if you can't measure it, you can't manage it.
    • [This is another theme: lack of measurement. M.E. 4/24/09] [Wait a minute, you invite people to a meeting, don't tell them the questions in advance, and then are critical that they don't have this information available immediately? In 2009, the cost of my unit's Web Office, based on salary and benefits for 3 FTEs and operating budget, was $411,180 out of a total federal budget of $31,996,000. 39:4/24/09]
      • [Regarding "wait a minute" above - - my apologies if you felt ambushed. We've found that it's difficult to get a handle on the specifics of Web and New Media expenses institution-wide. Do you think it's possible to come up with a defensible number in the next four weeks? Do you think we already know that number but haven't talked to the right person yet? Sounds like it's time for a call to the CFO/CIO! M.E. 4/24/09]
    • [It would be interesting to see how other businesses or non-profits break out these costs. Does anyone even use an expense bucket labeled "Web technologies?" It is not just hardware, software, & IT labor, of course, but also digital content creation and marketing. How are those expense lines divided? How are the costs allocated against any generated revenue? Smoot, 4/27]
    • [Related specifically to what is spent on online fundraising - each year, we complete a survey for the Chronicle of Philanthropy about online fundraising and it gives us a yearly snapshot of where the Institution is. Some units only consider the cost of the donations processing tool when calculating total expenses, some factor in staff time, some don't break out online fundraising expenses from other development activities. Cost per year ranges from $300 to $250,000 with most closer to the $300 end. VH, 4/30/09]
  • [general discussion at ITMC, 4/29/09
    • NMAH draws atttention to SI budget calls
    • Beth S. points to performance score card, part of enterprise architecture reporting. Major IT systems. Performance tables are system specific. But now...wanting to link high level strategy down to systems. Need to roll up measurement system.
    • RL "this is complex and ocurrs at various layers" C.I. could say "our mission is based on this 300...." and measure entire IT/HR ecosystem.
    • AR - surface what we have in the IT Federal budget calls and ask units to reflect back on it. Could ask units what they included for it could vary from just the formal positions and infrastructure in the web offices to include all the content developers times such as curators, museum specialists, and educators (Pam and Carmen).
    • [Right now the directions distributed as part of the IT budget calls only ask for the reporting of only Web infrastructure and related federally funded staff (FTEs and contractors) costs . DO NOT include costs related to staff or contractors who use Web tools and the infrastructure primarily to add content or costs related to Web content design, development, or maintenance. And typically these costs are only if an FTE spends more the 50% of their time on this effort. PSmith 5/5]RF "they have to tell you how they structure their SWAG."
    • Assertion: "you've got to develop a standard, Pan-SI way of measuring cost/effort for the Web and New MEdia program"
      • ...or you're never going to measure ROI, success, etc.
      • Discussion of GAAP-like standard for measuring effort/cost
      • discussion of full-time staff, /part-time staff
  • M.E. 4/29/09]

Q: Has anyone downloaded strategic plan that SI sent to Congress in 2006? It mentions the Web one time: "make sure you track the number of visitors to your websites".

  • also read that SI should have a "world class Web presence"

Q: How would you measure success of a world class Web presence?

  • get our content out there, uphold aspects of providing content for free, figure out ways to turn profit through the Web, entice others to come to DC to spend $$$
  • 25: before this question, would want to know what would our public value in Web presence? Our public is so diverse - how do we address all of these audiences?
  • [Also should include how often our web presence, both on SI websites and non-SI sites, is cited by other websites and how often our stuff is reused and repurposed. PSmith 5/5]
  • [I want to assert that this must be a major major major theme. M.E. 4/24/09]

Q: How successful can you be if you're trying to serve everyone?

  • [though it's in the form of a question, it's actually an assertion: you can't be successful if you try to serve everyone. M.E. 4/24/09]
  • only if you have a monopoly (i.e. telephone company)
  • DC location is not enough
  • Google is a good example of a company that serves everyone.
    • [what about public libraries - - you could argue that their mission is to serve everyone, and most are quite successful at it. M.E. 4/24/09][But public libraries often serve only their communities. PSmith 5/5]
  • you have to know what you are; measure in terms of engagement of your users. Visits versus satisfaction.
  • [Success is better guaranteed if you define who everyone is and have a living plan defining how you will serve them-- which I'm taking as meeting their needs and desires. Even though we serve everyone, we shouldn't try to serve everything. Back to google it serves the need to find things online. PSmith 5/5]
  • AOL changed from a subscription-based model to advertising. By delivering content that people want, they'll come every day. Measure unique visitors, time spent, frequency. People are coming to site for a reason. Strategically placed advertising help you further fund and outreach. We don't know what our customers want. Need to know this first.
    • (Leo) Not only find out what they want, but also understand what they do when they visit online, then try to monetize.
  • [We need to identify specific target markets and use them as a lens to see how our perceived value can most effectively impact individuals within those markets. Smoot, 5/12]

Q: How can the Web help Smithsonian generate revenue?

  • formal partnership with local hotels, travel agencies. Allow them to advertise on our sites. Problem is legislation - doesn't allow SI to have these relationships. Can we change that?
    • Actually, there's no law prohibiting this, the problem is that we'd have to pay tax on the revenue. It becomes a policy decision
    • [We can also enter agreements where our content is hosted on non-SI sites with advertisements that give a kick-back to SI. The question then becomes how do we divi up the proceeds? We need to have systems that can track earnings and fairly divide them to units based on hueristics. PSmith 5/5]
  • have researchers participate in Web conferences - charge subscriptions to universities that can have one-on-one conferences
  • [This question was pretty much glossed over in the workshop. We need a new wiki page for this, as I'm sure people have hundreds of ideas. We also need a KnowledgeBase of some sort that documents what has been tried, the conditions under which it was tried, the results, and a brief analysis of the results. I think very few people, if anyone, can rattle off all of the current, existing sources of revenue at the Smithsonian. Smoot, 4/27]
  • [Online philanthropy, whether it is membership or straight donations. There is no organized strategy for this pan-Institutionally. In some units, online fundraising is run out of the new media/web dept, in others it is development, in others it is the job of communications. Very few are raising any significant funds online right now, but, very few have a strategy in place or the time or money to do anything more with it. In the U.S. the amount of money being donated online is growing each year, even if it's not yet a large percent of what organizations are raising total. We have to get started on this now or we're going to be struggling to catch up a couple years down the line. VH, 4/30/09]
  • [As a public owned institution with primarily federal funding we need to be careful not to charge our citizens for basic services. When we do charge we need to do it consistently across the Institution for equal value non-commercial services. I am also a proponent of charging for premium services. For example at the Library of Congress, there is no charge to download a digital image but there is a charge if you want it mailed to you on a DVD. PSmith 5/5]
  • [If the new SI focus is to be placed upon Education, why not try to generate revenue through educational products and services? Look at the model for Strayer University, Elderhostel (esp. in the beginning), University of Phoenix, continuing education certificate programs, summer camps for children & adults--on the Mall & off the Mall, educational games--single user & multi-user, etc.? Smoot, 5/12]
  • New location-based ad service BipBip donates up to 50% of its profits on every ad to a charity of the consumer's choice.

Q: Most people, particularly young people believe content on Web should be free. Why don't you advertise?

  • came from Web 2.0 conference in SF. They say don't do ads because you'll become slaves to them.
    • Are we endorsing the ad's content?
    • If you can't come to the museum, offer online memberships.
    • Freemium option.
    • No advertising!
  • micro brands [Grants not Brands. R.H. 5/1/09] model - could make SI more nimble to do smaller, quick projects. Help send 5 kids on an archeological dig. Tap into donors - invite them to be supporters of the SI for very clearly defined, obvious initiatives.
  • (93): was going to say the same thing, but our accounting system doesn't allow for it at our unit. Setup for big donations. Small donations - they throw up their hands. We have a long tail to tap into. No mechanism to do this - huge lost opportunity.
  • [While in theory I love the idea of these small, tangible projects to raise funds online, I question of how much of an impact those could make. I don't think we (either as an Institution or as a unit) have tried raising funds online in an organized way. Why go for funding small, indivdual, highly-restricted projects when we haven't even put together a general strategy and message to see if it will work? We have a lot of needs that we aren't communicating to the average person and it seems, based even on comments in these strategy sessions, that a lot of people in the public would be surprised to hear about. VH, 4/30/09]
  • [I submitted a recommendation to the / In the section regarding the back of the shop I try to leave a trail of bread crumbs which states similar concerns to the items from VH dated 4/30/09. I'll reprise in this comment something I mentioned there. Currently our online fundraising strategy at SI -- "Right now, to my limited knowledge, there is no single online fundraising system in use at SI that can distinguish between a gift to NASM and a gift to NZP. To get this specificity, each unit—that can afford it—has its own system that is separate from every other system. I think this may be the case for online purchasing as well—but I’ll leave the joys of looking into that to someone else." I will try to upload the full document for perusal in this forum. R.H. 5/1/09]
  • revenue generation team asked for others to post ideas online. Will provide URL later. [ and]
  • create experiences online that can't exist in the real world. If you want to touch the ruby slippers - do it.
    • Let Web be the platform for those who can't get here.
  • Carl Malamud tweets "You can do ads for yourself. Ads for magazine, high-quality photos, lunch with Secretary. All worth big bucks, put to use."
  • [Yes, why can't we create internal communication streams that allow us to work more closely together to cross-promote unit products & services with our own Smithsonian ads? As an example, shouldn't every Web site in some way be promoting SI membership of some form or another? Unfortunately, there is no reward structure in place to encourage this. With data hording by individual units and no pan-Institutional CRM database, there is little opportunity to build synergies. Smoot, 4/28]
  • [We need to develop common e-commerce solutions that multiple units can leverage. We can then promote related e-commerce offerrings on our own websites and in SI search results in a non-intrusive and helpful manner. PSmith 5/5]

Q: There's a cost to create online experiences. Can there be a charge, like iMax?

  • 39: SI gets more public visitors to websites than the physical museum. [Consider the SI web sites to be loss leaders to attract the public to the physical museums. If people paid, given the cost of running the physical museums how much of the revenue stream would be allocated back to the SI Web? How much of the $180 million in revenue generated by SE has been allocated to enhancing and enriching As in a gaming environment, take World of Warcraft for example, would our public pay $12.95 a month for a subscription to the Smithsonian web site and how much would it cost the SI to develop the infrastructure produce and maintain this level of innovative web-based content? Wouldn't we be closer to our core mission to consider if school systems would pay a minimal fee, i.e., 25 cents per student/per year, for access to great on-line educational materials and curators to interpret ideas via web and video conferencing? 39]
  • look at the virtual world for each museum, collection. Revenue generating - by having an avator that can "buy the ruby slippers" and wear them around. Jump up on dinosaur and pretend to ride it. Problem finding ways for others to pay us to do that.
    • Latino Center launched the Latino Virtual Museum with a lot of folkways music.
    • Still not a fixed money maker.
    • Go into virtual world for free, but then in the stores they charge for virtual goods.

Q: In a normal business plan you calculate the Return On Investment (ROI) or articulate some other measurable objectives! You're not using this process, or a standard business-planning process, so how do you determine what to make investments in?

  • technology changes so often, we need to be able to shift with the Web patterns. i.e. virtual worlds, Facebook - trends that stand test of time?
    [What do we mean by stand the test of time? For example I am not sure there is any reason to assume that virtual worlds or facebook will be here this time next year. I think the best thing is keeping our content/collection flexible enough to publish to any existing format and exstensible to allow for new and different formats as they are invented. RM 4/28/09]
  • NASA uses virtual world. Can attend classes and get credit for it in virtual world.
  • from employee who's been here 15 years, making money here is a pretty new idea to us. Putting things on the Web are never easy or cheap. Learn how to make tough decisions during planning phase - it might cost more to use federal funding to do X project.
    • [There are some fundamental conflicts here: federal vs trust;
  • Advertising isn't necessarily all bad, i.e. public radio. More like a sponsorship model that's more palatable to institutions with public funding.
    • Advertising and SI content can co-exist.
    • Sponsorship is a problem at times because it gets viewed as SI endorsing a specific product. Audience in this room is debating this point.
    • If we make a sponsorship deal with a vendor [like in return for an in-kind donation] other vendors want the same deal.
There are basic web practice ideas that SI is not doing, like robust e-commerce site.
  • I'm Not a fan of centralization, but it's an opportunity to use collective bargaining power to get basic web practices out there.
  • we don't have a central marketing team. Each museum - every man for themselves regarding sponsors. Central team would know who is sponsoring what, and help organize people. [There is a Central Office of Development that does exactly that for corporate, foundation, and individual giving across the Institution. VH, 4/30/09]
  • regarding robust e-commerce site, you need to have promotion, which is non-existent currently. Promotion is part of the game.
  • [It is more than e-commerce (accepting online payments). Agree, promotion is very much a part of the game and you need a CRM database to keep track of what to promote to whom and to be able to monitor the results. Smoot, 4/28]
  • [Everyone in these sessions keeps saying "e-commerce" and I don't know if that is meant to encompass philanthropic "payment" as well as online stores, ticket sales, etc. I agree with Dennis that it goes beyond just accepting the payment online. There has to be a strategy and a way to track and measure results. Promotion is definitely key - you can't want to hide your Donate button somewhere at the bottom of your website because we're worried it might turn some people off. VH, 4/30/09] [Also need a way to track and fairly distribute the proceeds. PSmith 5/5]

  • [We need some more discussion about "robust e-commerce." What do people mean by that? What products or services do units want to sell online--those that don't have access to e-commerce now? Smoot, 4/30]

  • Use best practices from real world. [Develop multi-platform projects]
    • We have a website with our exhibit, why not allow user to see that book, poster, etc are available (for a fee) and everything else on the site is free?
  • person who worked at NPR: [we had an editorial] firewall preventing [marketing people from] interaction with news people. Marketing / branding issue is huge. Office of Development is the place that should know all financing across the institution.
    • when Air & Space museum says they're doing fundraising on X, and verify others aren't, and yet another comes in a might be doing something that's an overlap, do you see that?
    • sometimes units aren't interested in collaborating
  • (intern): You need to strengthen brand online. Let people learn about Smithson and his vision [See SI history LSF 4/24]. In marketing, people become emotionally attached to something. Before you start generating revenue, you have to start clarifying the brand.
    • SI sunburst should be as recognizable as McDonalds or Google labels
    • (Leo): SI brand was ranked low, alongside TGI Fridays in a previous study
  • Making an emotional connection is great - i.e. pandas! - people love to shop. We glossed over e-commerce and need to re-visit. MOMA is doing a good job. It's part of the experience. We're ready to "slap it on our website as soon as it's ready".
  • hard to sell brand to commercial entities, let alone within the institution.
    • It's a knowledge brand - not Disney, no Hollywood characters. Smithson is our person. We have knowledge - research to give to others.
    • Every museum wants to be their own brand. When others think of SI, they think of it holistically, not by individual museums. Civil war within institution.
      • There is no centralized Web or e-Commerce - everyone wants to do it all by themselves. No one's saying we want one business model.
  • Are there other knowledge brands that were on that brand? Google, wiki were top 1, 2. Obviously they tapped into something that works.
  • micro donations and e-Commerce are very important. We have different audiences in each museum, so you need some uniqueness and cohesiveness. Our sites are reflecting the internal dysfunction about our brand. Window to see inside ourselves. If barriers were brought down, people would participate.
    • [There are many, many, ways to donate to the Institution - various membership programs, annual gifts, events, galas, adopt-a-something programs, etc. If I were a potential donor coming to the Smithsonian homepage and I wanted to make a gift, I wouldn't be able to find the majority of these opportunities and the ones I could find are not laid out in a clear user friendly way. As the person who made the above comment stated - it's a reflection of our internal organization rather than of how the site visitor or the user wants to interact with us (and we don't know who our site visitors are...that's a whole other discussion). VH, 4/30/09]
  • we're spammers, and how green is that? There's centralization with guidelines - should control messaging to customers, i.e. how many emails a month and how is that prioritized? CRM enterprise-wide. Messaging varies - by design and technology. Templates could lock down what units can't touch. More economical.
  • [There was a discussion on the web line item in OCIO's bugdet at the end of the workshop. I just wanted to add that due to that line item the Zoo is able to host the number (average 15 at any given time) and quality (143 Kbps) of web cams that we do. No other zoo in the country can do this. We have watched as other zoos have fallen victim to their own success, specifically in the case of giant panda births, and had to diminish or end cam services because they could not afford the bandwidth generated by the demand. I think this is a good example of providing the necessary tools centrally for the units to take advantage of. Our cams corelate directly with our ability to attract people to our website. RM 4/28/09]
    • [Does that addtional traffic generate online sales or donations? Does the net income from sales & donations cover or exceed the expense of the extra bandwidth? Smoot, 4/28]
    • [The Zoo does a good job of linking specific opportunities to donate with the content of a web page, which many other units don't do, but I'll leave it to them to comment on how successful it has been. VH, 4/30/09]

Q: Licensing your content. Fee versus free. Is there a revenue opportunity licensing content? (side-stepping issues re which part of our content we could license). Is there a greater opportunity to license content or let content go free?

  • folkways- licensing is 10% of business. License content to 400+ universities. No question it's a huge area to get into. We can also license the knowledge, not just artifacts. You can give away something and license it at the same time. Low res to everyone - high res to payers.
  • Giving all our content away for free would increase our licensing revenue. Academic world - publishing online and they're selling more books! (Folkways agrees.)
  • Getting buy-in from each museum can be difficult, as well as signing on contracts. There are "rings of fire" to jump through to get licensee on board to do something.
    • Not one place a customer goes to to get an image - have to go to each unit.
    • [units are ] not likely to give it up licensing for the greater SI.
  • It's currently not giving them a lot of money, but enough to feel invested in it. So would be hard to tear them away. Could if ROI is sufficient.
    • [L. Guttenplan asserted in the 4/21/09 "Smithsonian 2.0 debate" that we probably don't make a profit on most image licensing activities at the museum/unit level. But since we don't measure/track the cost-to-market we may never know. I'd like to do a data-call and study this - - i think it's an untenable business position. M.E. 4/24/09]
  • 39: [The cost to market is] a significant amount of $$$ to [start up and maintain a profitable licensing operation]: lenses, $40,000 camera backs, repairs, renewal of equipment, scanners, the conservation of the objects to be imaged so they look great, the creation of special photo mounts so that the object can be imaginatively imaged, the touch up and color correction of images, the photographers and digital scanner technican, and the cost of storage and the digital asset management software. [A museum would not invest in this for the sake of licensing content, the opportunity to license content occurs as an offshoot of producing exhibits, educational materials, publications and other activities. By working through SE SI museums can reach markets such as Corbis, however the return on the revenue is not so great for the units. In 2008, through SE, NMAI licensed about 35 images to Corbis which generated revenue of $1634.63 of which the NMAI received $573.11. Working with SE in 2008, NMAI's licensed products generated $13,321.68 of which NMAI received $3,458.20. SE bore none of the cost of creating and maintaining the images for Corbis, yet received a significantly larger share of the revenue. On the other hand, NMAI would not have received any return if SE had not had its agreement with Corbis, so some money is better than no money but these funds would never cover actual costs. 39 4/24/09]

Q: If you could deliver one message to Secretary Clough - what is it?

see Tell the Secretary

Index of Workshops