Research & Development EN blog
Where’s the money? Finding value in reuse of heritage materials
Is it possible to stimulate the economy with the creative re-use of cultural heritage? It’s a question that has often been asked by funding institutions, such as the European Commission, to justify the millions of Euros spent on digitization and accessibility projects. Is the commercial exploitation of digital heritage a viable solution, and if yes, what’s the best method? The Netherlands Institute for Sound and Vision has played a role in numerous projects that explore this challenge, the most recent of which was the Europeana Space project.
The Europeana Space project was a 3 year project that sought to stimulate the creative re-use of cultural heritage material and catalyze job creation and business development around this re-use. The project aimed to do this through creating 3 'spaces': the Technical, Content and Innovation Space. In this blog, Europeana Space Work Package 5 leader, Gregory Markus reflects on the lessons learned from the project’s Innovation Space: where we focused on the development of services and products around cultural heritage. The trajectory for this task was as follows:
- Organize six hackathons around the pilots Interactive TV, Games, Dance, Hybrid publishing, Museums and Photography
- Organize subsequent business modelling workshops for the 3-winners of each hackathon
- Put the winning teams through a 3-month incubation phase
We look back on these activities to argue to which extent this has been conducive to stimulating economic growth and job creation.
Heritage, a financial rock
There is no doubt that cultural heritage generates economic impact. This has been most recently investigated by the Cultural Heritage Counts For Europe project which specifically and thoroughly researched “to demonstrate the value and potential of cultural heritage as a strategic resource for a sustainable Europe; to raise public awareness of this resource; and to present strategic recommendations to European decision makers.” Their entire 297-page report can be found at here. However, the report also identifies there is a strong need for crossover and cross-sectoral collaborations in order for heritage to unlock its full socio-economic potential. Ultimately though the report still solidifies public funding as the investment bedrock for sustaining cultural heritage. Even spill-over jobs such a restoration, construction and the cross-sectoral collaborations are dependent on public funding.
The Europeana Space project, at the behest of the European Commission, sought to investigate how new business models centered around creative re-use could free heritage institutions from their dependency on public funding. Furthermore the project explored if these spillover, cross-sectoral collaborations between heritage institution and the creative industries can be self-sustaining on the free market.
Building upon the past: Europeana Creative, a strong foundation
Since 2013 Europeana Foundation has explored economic value of cultural heritage re-use as well. The Europeana Creative project raised numerous concerns about data quality and content quality on Europeana, the restrictiveness of certain licenses, and necessary improvements for browsing and search.
The project's outcomes were a first glimpse at how difficult creating market viable products specifically focused on creative reuse of cultural heritage can be. VanGoYourself, the project’s most visible product, started a crowdfunding initiative in order to sustain itself after the project was over which succeeded in reaching their minimum target goal. However the service has not shown any online activity since September 2016, nor have any of the other Challenge winners, as far as we can tell. The most active incubated project, Ajapaik, an Estonian project went on to receive public funding. Public Domain City equally received funding from the Lithuanian Cultural Council's Stipend to introduce open culture to creative industries in Lithuania in 2016. So whilst some of the project outputs have been able to argue their value to public institutions, the question of whether these outputs have value for the creative industries is still unclear.
The Europeana Creative project built an extremely strong foundation of research and use cases from which the Europeana Space project could build upon. Most notably the Europeana Creative Pilot and Infrastructure Evaluation Report and the Final Report on Europeana Labs Network Sustainability Plan and Generic Business Models showed areas that require attention, like improving the communication strategy of cultural heritage institutions and, better enticing entrepreneurs in the production of cultural heritage products and services. Furthermore, there is a stark difference between the way cultural heritage institutes communicate and operate versus that of the creative industries that needs to be addressed to improve collaboration. Additionally, reflecting on hackathons and co-creation events, colleague Maarten Brinkerink argues here that the value of these activities is of a social nature, and foster creativity and innovative thinking but calls for more thorough incubation support and business development efforts. Lastly, Europeana further reflected upon Europeana Creative a year later in their Creative Industries Reach Report where they recommended to increase the number of applicants for challenges and hackathons, to focus on attracting high quality entrants, to be realistic about the quality of cultural data, and to create realistic incubation timelines.
All of these reports from both Europeana Creative and the Europeana Foundation stress the importance of fostering creativity and innovation, and facilitating connections between cultural institutions and the creative industries. The challenges that these earlier projects have identified have provided valuable lessons that the Europeana Space project has built upon.
The Europeana Space Innovation Space
Europeana Space’s Work Package 5 also known as the Innovation Space, sourced 7 new, innovative projects that re-used cultural heritage material. The projects were sourced via 6 hackathons. From each hackathon 3 winning teams were chosen to move on to a business modeling workshop. From there, the team with the strongest idea won a 3-month intensive business development track led by London based REMIX, which is a creative hub focused on the cultural sector. These 7 projects, Nora, StoryPix, WeMakeKnown, PostArt, Picasso’s Cat, Vivlio and Nous all approached creative re-use in new ways and presented business models that showed potential for job creation and economic stimulus.
Hackathons, a misnomer
The first lesson learned is that the term “hackathon” is unconducive for business development. The prefix “hack” has become reverential for cultural heritage institutions wishing to explore new avenues of re-use and development. It is synonymous with new ideas and short spurts of creativity but not necessarily new sustainable businesses. To better serve the objective of creating economic value with cultural heritage, we propose a few tweaks:
- Avoid the word “hack”. For example, The Future Museum Hackathon or Hack the Museum can simply be changed to The Future Museum Challenge or Museum of the Future Festival. This immediately alters perception from preconceived notions of hackathons to something more substantial.
- Make your goals explicit. If the end goal is to create market viable products, make that clear. Use terms like “business development”, “entrepreneurial”, “audience engagement”, “business models”, “sustainable products” instead of words like “experiment” and “prototype”. Repeat this in event texts, social media and regularly throughout the event to keep focus on the desired end goals.
- Pitch, pitch, pitch. One way to constructively focus attention on business development during the event is to hold periodic pitching sessions. These pitching sessions will encourage and motivate participants to strengthen their value proposition, having them convey it to a panel. Normal hackathon procedure encourages marathon work sessions that concentrate on development. By incorporating pitch sessions, a part of their focus will shift to business development. Equally, these pitch sessions will offer participants an opportunity for feedback and guidance from experts.
Utilizing these simple tactics will positively impact the event’s and project’s success if indeed the desired outcomes include new businesses. It is important that the emphasis on business development is communicated clearly leading up to the event, to avoid attracting participants that join simply for the sake of experiment.
The realities of entrepreneurship
Successful businesses don’t just appear out of thin air nor do they come to fruition in a matter of months. The road to success and solvency is long and riddled with failed attempts. It is important to remember that most enterprises fail, and that successful, financially sustainable cultural enterprises are even rarer to accomplish. According to a recent EU report the 5-year survival rate of new enterprises is below 44%. In a typical Venture Capital portfolio, which itself has relatively high entry requirements, more than half the companies will at best return only the original investment and at worst be total losses. Only 10% to 20% of the companies funded need to succeed to achieve the targeted return rate of 25% to 30%. One or two good investments will often be sufficient to create the reputation of a firm.
With that in mind, the Europeana Space project set its sights on providing the incubated projects with the best possible skill sets and business models to provide them with a strong foundation to move forward. Incubation support does not necessarily mean financial investment or contribution and the E-Space project was not allocated resources to fund the 7 incubated projects. However, by collaboratively constructing a comprehensive and solid business model, the 7 teams have a stronger opportunity to pursue venture capital or outside commercial investment in many different ways including public/private partnerships, advertisement revenue, public funding and numerous tech, R&D subsidies etc.
These teams’ successes, like any new business’s’ success is dependent not just on money but on commitment and dedication. This is why team strength and commitment were such key jury criteria during the hackathon and business modeling workshop assessment rounds.
However, in suport of how beneficial finnancial support can be for such projects, the recent Europeana Labs Europeana Challenge program offers 10 to 20,000 Euro in capital for creative re-use projects. It thereby supplements team commitment and dedication with valuable initial capital. The Europeana Space incubated project StoryPix was awarded 15,000 euro in funding as part of the Europeana Labs Challenge following the Photography Hackathon held in Leuven. As evidence that financial support can only add to initial development, StoryPix grew faster during its E-Space incubation process. The funding allowed for technical development and a functional prototype. This, along with a strong business model and concept formulated with E-Space incubation catalyzed StoryPix’s development. Therefore a case can be made that funding for incubated projects should be made available to support purchasing of necessary hardware or software, hiring external development partners and commissioning promotional materials from professional PR firms.
On the other hand, the incubated project NORA is an editorial platform which requires very little technical development. NORA has been able to maintain a constant flow of editorial material which is necessary for them to grow their audience and in turn entice advertisements or sponsored content later on. If funding is made available for technical development, purchasing hardware and hiring developers for projects that require such then the case can then be made that NORA or more editorial / curatorial projects would benefit from funding to help commission staff writers. This would also allow the team to commit themselves fully to growing the platform instead of it being a free-time hobby.
How to assess value
Is cultural heritage’s importance value more than financial? Simply: yes. The aforementioned Cultural Heritage Counts for Europe makes that explicit and anyone visiting Amsterdam, London or Paris can witness the visible masses swarming around the Rijksmuseum, Tate or Louvre. However, this report looks more specifically at heritage institutions as valuable real-estate which affect their direct surroundings and not paying much heed to the digital realm of cultural heritage.
Europeana has taken great efforts to cement its undeniable financial and societal value. In 2013 they commissioned a SEO Report which concluded that Europeana provides more financial benefits for society than it receives in funding. More recently in 2016 Europeana launched the Europeana Impact Assessment Framework. The first case study, “Workers Underground: An impact assessment case study - Europeana1914-1918” looked at the impact of Europeana through different lenses in order to find out how much intangible impact Europeana has on daily European life. The assessment concludes that the Europeana 1914 - 1918 project contributes greatly to a feeling of European-ness and a shared European identity.
When it comes to economics the assessment uncovered that for every 1 Euro invested in the 1914 - 1918 project there is a perceived 1.93 euro social value created. When extrapolated and measured against total service costs of keeping Europeana 1914 - 1918 operational, Europeana exhibits a theoretical 193% return of investment. The report ends with an Oscar Wilde quote, “nowadays people know the price of everything and the value of nothing”. The sentiment of the quote rings true. The presentation and re-use of digitized cultural heritage content serves a larger purpose just like a museum or public library serves a bigger purpose than the art on its walls or books on its shelves.
But this should not be used as an excuse for forgoing the development of products that have strong business models and market viability. The Europeana Space project’s 7 incubated teams show potential for providing both financial and societal value. But like any startup, success is difficult. In true entrepreneurial spirit we will all continue to work hard, experiment and focus on providing value for society.