Dear all,
I have been following this discussion with considerable interest, particularly since it speaks to the hope I expressed at last Friday's UK Museums on the Web that Digital activity in the sector would at last start to make a real-terms cash contribution into museums.
The Collections Trust has been working for the past few weeks on a research project to model the Costs of Digitisation for the European Commission. We have had to take an approach based on full economic costing, which includes a reasonable apportionment of overheads and ancillary costs, plus the per-item scanning cost, plus the long-term/lifetime cost of ownership, stewardship and preservation. When you take all of these things into account, the unit cost (depending on the material and a wide range of other variables can range from as little as £25 up to hundreds if not thousands of pounds.
If you were calculating the price of a digital image in a commercial context, you would have to apportion a reasonable allocation of these 'production costs' to each transaction, on the basis of a reasonable expectation of the number of times an item is likely to be used, plus a percentage to act as a margin to enable you to do further Digitisation. I very much doubt that any of the examples we have discussed in this thread have applied full economic costing to the transactions in this way, or have priced on the basis of recovering 100% of their costs plus a margin.
The user's expectations of a reasonable license fee to use an image just doesn't match the real costs of delivering that asset. Hence image sales in the vast majority of museums are likely to be being subsidised heavily by the taxpayer. The higher the throughput of transactions, the lower the unit cost can be (because the costs are spread over a larger number of uses), which is why the market is tending towards a smaller number of higher-volume providers.
I am currently in a session at the European Commission where an international financier is giving a banker's perspective on Digitisation in 'memory institutions', and I think his comments are worth sharing:
· Investment banks and commercial investors would be sceptical of investing in Digitisation of cultural heritage as a commercial proposition for the following reasons:
· The legal status of the collections is not clear, and hence it is not clear that Digitisation produces an economic asset
· Memory institutions are not technical experts and do not always adopt appropriate technical strategies to maximise revenue
· It is not clear how the material will be used, if at all, and to what purpose
· Memory institutions feel compelled to digitise, but it is not clear that there is demand for these assets
· It is not clear what the revenue potential of digital cultural assets might be
· Technology depreciates very rapidly
· Digitisation tends to span multiple elective periods, and so is at risk of changes in Government priority
· In short, there is not a business model for Digitisation in memory institutions, which means that investors would regard this as an unacceptable investment risk
Thought you'd enjoy that!
Best regards,
Nick
Nick Poole
Chief Executive
Collections Trust
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Tel: 0207 022 1889
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