Should Museums Charge for Admission?

Should Museums charge for admission?

One of the most difficult challenges for museums is defining a charging structure that offers value for money, promotes long-term growth, meets fundraising objectives and encourages engagement from both local and tourist populations.

We were lucky enough to catch a seminar given by DC research on their AIM commissioned study at the Museums & Heritage show in May this year on the “Impact of Charging or Not for Admissions on Museums”. In this slightly longer than usual blog-post, I’ll be giving you an overview of their findings.

Association of Independent Museums Credit Credit to DC Research

Full credit to AIM & DC Research for their report “Impact of charging or not for Admissions on Museums.

The Study

Their research stems from interviews with over 300 museums across the UK, of which the majority were independent museums. They found most (67%) of independent museums charge some kind of admission, whereas the same percentage of local authorities did not.

percentage of museums who charge admission

Most of the respondents were Independent museums due to AIM’s existing connections with the sector

Interestingly, when questioned about the effect of charging or not charging, 55% of free museums felt their structure had a definite positive effect on visitor numbers, whereas of those who charged admission, only a small minority felt their fees had a negative impact.

Based on the testimony of venues who had recently changed their pricing structure, going from free to chargeable often meant a drop in visitor numbers, but increasing fees seemed to have little effect. Those who did charge admission generally felt there was an understanding with their guests that the fees were to a good cause and offered value for money.

It was noted that not all visits of free venues were necessarily of value, as a number of guests would use the venue simply for restroom facilities, as a meeting spot, or even respite from the rain. This belief is reinforced by the statistics that show that in general, visitors of paid attractions tended to stay longer, indicating a desire to get their money’s’ worth. Similarly, when free venues began charging, they found that local traffic saw the most significant drops.

effect of charging admissions on donations, secondary spend and dwell time

Respondents felt that charging admission generally had a positive impact on dwell time and secondary spend, while opinions were split on spontaneous donations

The findings became more interesting when looking at the effect of charging admission on donations in general. While a small majority viewed admissions as detrimental to receiving additional donations, 56% of respondents felt that charging admissions had a neutral or positive effect. In addition, those who charged admission also reported longer dwell times, though they were less confident than free museums of the impact of this on secondary spend.

Qualitative Observations

From DC Research’s qualitative assessment, the researchers found that in general, whether or not a venue charged had little to do with visitor spend. As they put it, if you want to buy a tea and cake, you won’t be put off because you’ve already spent £5 to enter. Instead, visitors were actually more likely to visit the shop or on-site catering as part of their paid-for experience.

In terms of creating a visitor experience, museums charging admissions generally had the edge over their free counterparts, in that they offered a formal welcome to the establishment. This forms an integral part of delivering value, and it was DC Research’s recommendation that otherwise free venues should still have an alternate welcoming process.

Who charges what?

Of the participants interviewed, the median price for a ticket was £5 for an adult, £2 for a child, £16 for a family and £4.05 for concessions. The mean was slightly higher, indicating a skew for ‘key attractions’ who charged up to £24 for an adult ticket.

trends for museum pricing

While independent museums charged more than local authorities, average prices had less to do with sector and more to do with significance of the attraction itself

The lowest price recorded was just £0.50, which raised concerns from the research team. Not only do such low priced attractions suffer from the footfall drop of charging, but they also don’t benefit from the otherwise flat price elasticity. As the speaker put it, such venues have “suspiciously low” pricing, wherein the value of the experience is downplayed to the point of being a deterrent.

While there was no real correlation between admission rates and the type of museum, the more expensive museums generally saw over 100,000 annual visits, and operated in the South-East & London.

How does charging admissions affect fundraising?

Of the participants who increased pricing in the last 3 years, 70% reported that it had no impact on spontaneous donations. For those who transitioned from free to charging, donations were commonly claimed to have decreased. In both instances, overall revenues were reported to have improved.

Despite the general trends, It’s important to know the local demographic when planning any price increases. The case study below highlights difficulties faced by Cannon Hall, which attempted to charge admission to its’ grounds after years of free admission for guests to its’ grounds.

Cannon hall admission fees case study

The cannon hall case study, a local attraction for us here at Merlinsoft is a great example of needing to understand your audience. In this case, Cannon Hall arguably forgot the colloquial Barnsley motto: “how much!?”

The general consensus was that admission charges were of minimal importance to the donations received. More critical factors were things such as how the donation boxes were presented, whereabouts in the museum they were positioned, and the messages associated with them.

Final word

After reading this article, it seems apparent there is much goodwill towards museums, and audiences are generally tolerant of price increases. It is worth noting that the majority of museums who increased prices, did so with the addition of a new offering, with full disclosure of the reasons for increasing charging, and/or with sound evidence about their audiences’ preferences.

In truth, good fundraising comes from understanding your audience and sharing a mutual vision which lets them share in your cause. For some, free admissions were a way to build a sense of community, while others flourished and grew their offerings year on year through paid admissions. Ultimately, it comes down to your museums identity, and that of your visitors.

Article source: https://www.aim-museums.co.uk/wp-content/uploads/2017/04/Final-Report-Taking-Charge-%E2%80%93-Evaluating-the-Evidence-The-Impact-of-Charging-or-Not-for-Admissions-on-Museums.pdf

Digital Strategies for Attractions in 2018

In 2016 the UK soared past Mexico and Germany to become the 6th most visited tourist destination on the planet. Competition has never been fiercer among thousands of historic sites and visitor centres across the country to tap into the growing market of domestic and international visitors.

While national theme parks have always benefited from economies of scale in marketing from newspapers to cereal boxes, smaller less established venues have often had to be more creative in their outreach initiatives. For such attractions, the rise of digital media has been indispensable as a route to market.

Pictured: available offers could be a prerequisite or the last push that leads consumers to visit an attraction.

Evolving over the years from text to photo to virtual reality, digital media has continued to offer innovative means of engaging with an audience. In a 2014 report into the effect of high-quality listings on consumer perceptions, Google found that on average those sites which offered ‘rich’ media listings generated as much as twice the interest as those without.

As we enter 2018, some of the biggest names in tech are now primed to escort us to a new age of experiential marketing. Samsung, Google, Facebook, Playstation and HTC each have their own virtual reality headsets, with Apple rumoured for a 2018 announcement, and there is no shortage of content with bloggers, advertisers and TV shows keen to explore 360 video as a new medium.

Looking to the future, Mark Zuckerberg is aiming for 1 billion users of Facebook’s Oculus, with the intention to create a full virtual reality for users to experience concerts and galleries from the comfort of their own homes. This is all part of his eventual ambition to create an augmented reality where users can share in simulated experiences.

The Cutter & Cutter gallery in L.A has a virtual tour online, which includes exhibit information.

As a more immediate stepping stone, Google has been building a network of thousands of media producers to accelerate the introduction of their virtual tours, an extension of street view. With notable adopters such as English Heritage and National Trust in 2017, virtual tours are poised to help attractions turn interest into excitement as a highly engaging means of conversion.

Such introductions of new technology have a two-fold impact on the way we consume rich information. On the top-side, early adopters can benefit from a first-mover advantage, gaining widespread recognition over their competitors, new technological shifts are always driven by a small number of facilitators and an expanding audience

 

In addition to technological driven changes, changes in social attitudes have also lead to the emergence of new platforms to promote great experiences. Confidence in online reviews has continued to increase in recent years, with 19% of respondents reporting that they always trust online reviews, and a further 45% having confidence where reviews are corroborated, up from 8% and 40% respectively in 2015.

High numbers of positive visitor reviews indicate a great user experience and demonstrates the venue is reputable and trustworthy.

This increasing reliance and trust is immediately apparent when looking at Trip Advisor’s growth rate. In 2006, Trip Advisor had around 10 million total venue reviews, of which around 34,000 venues were visitor attractions. Ten years and one smartphone boom later, there are now 760,000 visitor attractions listed and 465 million total reviews, with more than 20% year on year growth. This meteoric rise is symptomatic of an increasing reliance on technology to help consumers research and book new experiences.

A similar trend can be seen in the use of voucher codes. Whereas coupons for visitor attractions were once in the form of wrappers and newspaper cut-outs, savvy consumers now scour the web to decide between similar experiences, or reduce the costs of those they would prefer. On average, searches for coupons in the UK have increased 38% year on year for the past 10 years, with search volumes now over 20 times in 2017 what they were in 2007.

What we have and are continuing to see is a veritable explosion in routes to market. Though the mobile boom has passed us, our consumers are still learning and trusting in new methods to plan and research days out. The use of online booking facilities, for example has risen from 10% of museums in 2010, to nearly 30% today.

The sum of these shifts means that Museums and attractions now more than ever must have their finger on the pulse of digital media trends. With each surge in a platforms’ popularity comes a fresh new audience to market to, and the more engaging the content, the more likely this can be translated to footfall from excited new visitors, each keen to share their experiences.

Sources

  1. http://www.e-unwto.org/doi/book/10.18111/9789284419029
  2. https://www.theverge.com/2017/10/11/16459636/mark-zuckerberg-oculus-rift-connect
  3. https://www.statista.com/statistics/315755/online-custmer-review-trust/
  4. https://trends.google.com/trends/explore?date=all&geo=GB&q=discount%20code,groupon,wowcher,voucher%20codes,hot%20uk%20deals
  5. https://www.visitbritain.org/sites/default/files/vb-corporate/Documents-Library/documents/England-documents/finalversionofreport2009_tcm30-19612.pdf
  6. https://www.visitbritain.org/sites/default/files/vb-corporate/Documents-Library/documents/England-documents/annual_attractions_trend_report_2016.pdf

 

Surfing the 6th Wave

Most of us will have been happy this past week to see rising pressure from Elon Musk and others to the UN to  ensure that we never make Terminator a reality by weaponising artificial intelligence. Personally, If Microsoft’s Twitter bot has had any impact I think we should keep it away from the internet too!

Have no doubt, robots are already here. In 1996, Deep Blue was able to beat a grandmaster chess champion by thinking further ahead than could be possible from a human. Just last year, Google’s Alpha Go beat the world champion at Go. The reason behind the 20 year gap comes down to Moore’s law and a little bit of science fiction.

 

Moore’s Law

In 1965, Gordon Moore predicted that computing power would continue to increase two-fold roughly every two years. Since that point it has proven its accuracy. A clear example can be found in memory cards which have rapidly progressed from Kilobytes to Gigabytes over the last 20 years.

In chess, there can be an average of 35 possible moves per turn, in Go this increases to around 250. This means in contrast, thinking 5 moves ahead would take over 18,000 times more processing power for Go than for Chess. At 20 moves, this increases to nearly 120 Quadrillion times. This meant that to have any kind of foresight would take massive amounts of computational power, but even with Moore’s law, the same Brute-force method used for chess would be unattainable in Go for decades.

 

A little bit of Sci-Fi

Aside from exponential computing power, we have also started to use that computing power to develop machine learning algorithms. By setting objectives for programs, we are essentially able to write programs that write themselves. For Alpha Go, this meant playing itself to narrow down it’s options to the most appropriate moves in each situation – in effect, it programmed itself with the required experience to beat grandmasters.

This is just one example, Google has been training their machine learning algorithms to deal with a range of scenarios based on set parameters. This objective rather than hard-coded approach to robotics means that the applications are limitless. Combine this with the development of neural networks and soon we will be looking at robots which can identify their environments and act accordingly, acting in an office as self-driving cars do on the road.

 

Robotics

In terms of real world applications, Boston Dynamics is as close as they come. Their quadrupedal robots have proven themselves durable enough to work in the field capable of overcoming both rough terrain and a swift boot to the side. More recent developments are capable of lifting and jumping unaided while balancing on two wheels.

Other developments within robotics have seen robots which can work as a hive-mind to solve problems, spider-bots which can learn to walk again after having limbs disabled and robots which can demonstrate “hand-eye” co-ordination superior to humans.

 

What’s Next?

Broad technological developments in this manner have always generated a wave of innovation across the board. The economist Nikolai Kondratieff recognised similar trends with the inventions of hydro power, steam and then electricity.

Schumpeter later discovered that these innovation shifts were actually increasing in frequency. Arguably as each wave precipitated the development of the next through increases in idea transmission and resources.

Industrial revolutions have always displaced labour as soon it has become economical to do so. Windmills replaced human power; looms replaced human dexterity; cars replaced Horses; electronics displaced elevator operators and vast swathes of clerical staff have been made redundant by data processing software.

This next development then, the start of technology capable of making rational judgement, surely spells the end for work as we know it. As with all technologies, the more it is used, the better it is funded, the greater the growth and the more applications will open up. As more variables can be understood, quantified and compensated for, artificial intelligence and its infinite simulations of logic may yet prove to surpass our own abilities.

How long then until a machine is capable of picking and packing an order in a warehouse scenario? How far are we really from completely automated marketing, which knows more about our habits and preferences than would be economical for a salesperson to know? How far are we from a machine that can supervise other machines?

 

Conclusions

It is certain that the next few decades will foresee drastic shifts in how we work. The allocation not just of resources but of human labour will surely pose the next big questions for economists of the future. It is likely that social skills will prove the last hurdle for machine learning as we emerge from the uncanny valley; until then, it can’t hurt to know how likely you are to be replaced in the next 20 years.

What

In the world of the bland, the one I.P. is king

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Industry today is a far cry away from the days of Henry Ford’s famous quote “You can have any colour you like, as long as it’s black”. Consumerism has developed to the point where every niche is catered for, every permutation explored and every conceivable service delivered.

Through the introduction of e-commerce, any product developed anywhere has the potential for a worldwide audience. The result for some of our old brick and mortar institutions has been devastating. Woolworths, Blockbuster and HMV all suffered cataclysmic failures because their respective markets evolved around them. But what does that say of the competitors that are left?

At the dawn of trading, commerce depended on what Aristotle called a coincidence of wants. For the efficient allocation of resources, there was a degree of chance that the leatherworker required grains as the farmer required shoes. Even once banknotes were introduced as a low-weight commodity surrogate, inefficiencies were still harboured as the perceived credit risk of the banks would impact their trading value.

Today, we have no such issues, and as of 2018, even card payment fees are to be removed. Truly, we are entering a period of legitimately free trade, at least on our own shores. This means less inefficiency throughout the market mechanism, which is driving us further towards exponential growth.

If not then on convenience and pricing, where do businesses now compete? How is value added to a service to effectively differentiate one provider from the next? To put it simply, there are two paths to follow: Novelty or Nostalgia.

Novelty for years has been achieved through technological advances. Elon Musk has made waves in backing for Tesla, Space X and the Hyperloop. Kickstarter.com has shown us that even unknown and inexperienced entrepreneurs can encourage punters to part with their hard-earned cash on the promise of a new idea.

Nostalgia is arguably much more selectively available. While many UK caravan parks and smaller attractions benefit from the annual family trip, this pales in comparison to the huge draw of intellectual property from the likes of Disney, Universal Studios and Legoland.

Effect of IP on Merch 2016

Source: James Kennard & Natalia Bakhlina, IAAPA,  September 2016 

Whilst TV and film are excellent mediums for storytelling and building emotional connections, there are missing steps between viewership and merchandise sales. As any NLP practitioner will say, there must be a change to a kinesthetic mindset before a customer is willing to make a purchase.

According to a report by PWC, one of the latest trends for the attractions sector is the forging of partnerships with intellectual property owners. Peppa Pig, Sonic the Hedgehog, Angry Birds and Thomas the Tank Engine all appear in theme parks across the UK, with Wallace and Gromit creators Aardman Animations currently negotiating IP agreements in Kent.

By reinforcing the immersive worlds of the IP developers, attractions are able to embolden their own offerings through emotional resonance – leading to gains in trust, perceived value and market penetration. For the IP owners, this is a great way to see their creations come to life, to reinforce their own fan-base and to make  the next step towards merchandise sales.

It’s no coincidence of wants that in the last decade Disney has bought both Star Wars and Marvel, while Netflix has produced Marvel TV shows and another Star Trek reboot. Nor is it any wonder why Angry Birds, who have arguably mastered the microtransaction have branched out into theme parks, film and TV for further exposure. Keen to gain renown, Halifax has even eschewed its own star Howard Brown in favour of Hanna Barbera classics Top Cat and The Flintstones; while Howard Brown himself recently starred in a cameo for Hotels.com.

We’re certainly entering strange times in terms of intellectual property, and it seems unlikely that Skeletor and He-Man will be the last classic characters to be reemployed in vastly different roles to which they are accustomed. Collaboration these days is every bit as important as technological advancement. To return to Henry Ford, “If everyone is moving forward together, then success takes care of itself”.