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Hi Tehmina,

You make a good and valid point re: costings but I'm worried about your latter comment. 

I know we all hate bankers and that they are the root cause of all our woes etc, but it's wrong simply to dismiss the perspective. 

The guy *is* an international financier, specifically head of an international investment bank, and memory institution is a perfectly common formulation in Europe, where it is an attempt to reconcile museums with 'things that are a bit like museums'. 

I worry when our sector sounds self-serving, because our primary purpose is to meet the needs of everyday, normal human beings. Bankers, too, have a prime function of catering to the needs and behaviours of normal people (because that's how you generate profits), and if someone with considerable experience of what sells and what doesn't sell finds our offer baffling, then we should jolly well listen.

This whole public/private sector dichotomy is an artifice, and as we confront a period in which we can no longger rely on the Government to collect admission fees direct from taxpayers for us, we are going to have to change the rhetoric around commercialisation.

I'm sorry if it sounds like I am singling you out, but this is one of a number of dismissive comments I have received via the backchannel and it concerns me that people are letting prejudice get in the way of engaging with the very serious issue of the lack of clarity as to our core purpose among large parts of the population.

I'd welcome a really punchy debate on this one, because it's a discussion that we need to have!

All best,

Nick
Nick Poole, Chief Executive, Collections Trust

-----Original Message-----
From:         Tehmina Goskar <[log in to unmask]>
Sender:       Museums Computer Group <[log in to unmask]>
Date:         Tue, 30 Nov 2010 16:25:35 
To: <[log in to unmask]>
Reply-To:     Museums Computer Group <[log in to unmask]>
Subject: Re: Costs of Sales

This and the previous thread on open data have been excellent reading.
I would be quite interested in knowing what proportion of digitisation
(on a per item basis) is achieved through funds external to the
collecting organisations, and what proportion is funded as part of
core activities. How far does the former outweigh the latter? This is
where full economic costing will skew results when deciding how much
sales actually cost.

Anyone who calls themselves an 'international financier' and deigns to
comment on the activities of 'memory institutions' ought to have
his/her views treated accordingly.

Tehmina

On 30 November 2010 13:45, Nick Poole <[log in to unmask]> wrote:
> 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
>
> [log in to unmask]
>
>
>
> Tel: 0207 022 1889
>
> OpenCulture 2011
> UK and international Collections Management Trade Fair and Conference
> Manchester, 7th & 8th June 2011.
> Register online at http://www.openculture2011.org.uk <http://www.openculture2011.org.uk>
>
>
>
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>
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>
> http://openculture.collectionstrustblogs.org.uk
>
>
>
> Follow us on Twitter: @collectiontrust <http://www.twitter.com/collectiontrust>
>
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>
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>
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>
>
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>
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>
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-- 
Dr Tehmina Goskar, MA AMA
[log in to unmask]

http://tehmina.goskar.com/

Research Officer: ESRC History, Heritage, and Urban Regeneration: The
Global and Local Worlds of Welsh Copper
History & Classics
University of Swansea

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