This article was downloaded by: [Macquarie University] On: 11 September 2014, At: 23:26 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK International Journal of Cultural Policy Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/gcul20 New technologies in cultural institutions: theory, evidence and policy implications Hasan Bakhshi a & David Throsby b a National Endowment for Science, Technology and the Arts , 1 Plough Place, London , EC4A 1DE , UK b Faculty of Business and Economics, Macquarie University , Sydney , NSW 2109 , Australia Published online: 27 Jun 2011. To cite this article: Hasan Bakhshi & David Throsby (2012) New technologies in cultural institutions: theory, evidence and policy implications, International Journal of Cultural Policy, 18:2, 205-222, DOI: 10.1080/10286632.2011.587878 To link to this article: http://dx.doi.org/10.1080/10286632.2011.587878 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms- and-conditions
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This article was downloaded by: [Macquarie University]On: 11 September 2014, At: 23:26Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
International Journal of Cultural PolicyPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/gcul20
New technologies in culturalinstitutions: theory, evidence andpolicy implicationsHasan Bakhshi a & David Throsby ba National Endowment for Science, Technology and the Arts , 1Plough Place, London , EC4A 1DE , UKb Faculty of Business and Economics, Macquarie University ,Sydney , NSW 2109 , AustraliaPublished online: 27 Jun 2011.
To cite this article: Hasan Bakhshi & David Throsby (2012) New technologies in cultural institutions:theory, evidence and policy implications, International Journal of Cultural Policy, 18:2, 205-222,DOI: 10.1080/10286632.2011.587878
To link to this article: http://dx.doi.org/10.1080/10286632.2011.587878
PLEASE SCROLL DOWN FOR ARTICLE
Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.
This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions
New technologies in cultural institutions: theory, evidence andpolicy implications
Hasan Bakhshia and David Throsbyb*
aNational Endowment for Science, Technology and the Arts, 1 Plough Place, London, EC4A1DE, UK; bFaculty of Business and Economics, Macquarie University, Sydney,
NSW 2109, Australia
Publicly-funded cultural institutions such as theatre companies, symphonyorchestras, museums, libraries and so on are increasingly engaging with newtechnologies as a means of improving their operational efficiency and extendingthe range of ways in which they pursue their cultural missions. For example,opera companies are broadcasting performances by satellite to cinemas, and artmuseums are using the Internet to show virtual exhibitions. These developmentshave implications for funding authorities who need to update their policyapproaches to encompass a range of new technological phenomena. This paperprovides a framework for assessing technological innovation in cultural institu-tions, and discusses the ramifications of such a framework for cultural policy.The paper is illustrated using the results of a recent research project that evalu-ated the UK National Theatre’s NT Live experiment and the Tate Gallery’s useof a web-based exhibition as strategies to expand their audience reach.
Keywords: cultural policy; innovation; new technologies; theatres; art galleries;cultural value
Introduction
The emergence of the creative industries as a central element in cultural policy for-mation over recent years has been importantly driven by the application of newtechnologies in cultural production, distribution and consumption. Attention hasfocused particularly on the ways in which the digital environment has enhanced theeconomic potential of the cultural sector through the creation of new cultural prod-ucts and new modalities for the distribution and reception of cultural experiences.Further benefits may be reaped from knowledge transfers and other spillovers froma technologically dynamic creative economy.
The arts sector is an important component of the creative industries1. It rangesfrom small one-person artistic firms to large-scale cultural organisations operating inboth the commercial and non-profit sectors. Policymakers increasingly recognisethat these enterprises are a key part of the creative industries, both in their ownright and as a source of ideas and talent feeding the wider creative industries andbeyond (Andari et al. 2007, KEA European Affairs 2006, Throsby 2008b, 2010).
In this paper, we consider the role of new technologies in the arts, with particu-lar reference to publicly-funded cultural institutions such as theatres, opera and bal-let companies, orchestras, museums, galleries, libraries and so on. Such institutionscomprise a substantial sub-group within the arts and the wider creative sector, nur-turing and advancing art and culture at local, national and international levels andcreating significant public value. For much of the post-war period these organisa-tions have operated in a reasonably benign climate, with stable consumer demandand relatively secure public funding. But this is changing. Cultural consumptionpatterns are being radically re-shaped by the digital revolution, obliging arts organi-sations to re-think how they relate to their audiences. Financially, they face greateraccountability for government funding, with increased emphasis on public valueand efficiency, as well as growing pressure to find new ways to exploit theirearnings potential. The economic crisis has also made it more difficult to attractsponsorship and philanthropic donations.
We focus in this paper on digital technologies for several reasons. First, thesetechnologies are primary drivers of change in consumer behaviour; thus, strategiesfor innovation in cultural institutions are likely to look particularly to the use ofnew technologies in dealing with their audiences. Second, digital technologies havethe potential to allow arts and cultural organisations to achieve a step increase inthe audiences for their art and, in some cases, become major distributors of publicservice content in their own right. Third, since many creative products are easy toreproduce, store and transmit through digital means, digitisation has created unprec-edented uncertainties for many creative enterprises, making it imperative that theyfind ways to reinvent their business models to capitalise on the opportunities andavoid the threats that the new environment brings.
This paper is structured as follows. In the following section, we propose a con-ceptual framework within which to interpret and analyse the adoption and use ofnew technologies by publicly-funded cultural institutions. The framework drawsupon the theory of the non-profit firm and theories of organisational innovation toconstruct a characteristic set of institutional objectives and to develop a workingdefinition of innovation applying to cultural institutions across the creative artswithin which new technologies can be placed. In the context of this theoreticalframework we then proceed to look at some empirical evidence, asking how tech-nologies are being used by cultural institutions in the contemporary world. Our dis-cussion is illustrated by reference to case studies of technological innovation in twoleading UK cultural institutions, the National Theatre and the Tate Gallery. Finally,the paper considers some policy implications. Are there lessons to be learned byinstitutions in dealing with the rapidly evolving technological and financial environ-ment in which they now operate, and how might public funding authoritiesre-calibrate their arts support strategies to keep abreast of these changes?
Conceptual framework
In order to analyse the ways in which new technologies are adopted and utilised bycultural institutions, we need to construct a conceptual framework within whichtechnological innovation in such institutions can be understood. Since the greatmajority of publicly-funded arts and cultural institutions operate as non-profit firms,we can begin by referring to the economic theory of non-profit behaviour. Some ofthis theory is concerned to explain why such firms arise in a market economy
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(Hansmann 1987, Rose-Ackerman 1996, Weisbrod 1977), whilst other writers havepaid attention to the structure and mode of operation of non-profit firms, especiallythose producing arts and cultural services (Hansmann 1981, Luksetich and Lange1995, Netzer 2003, Throsby and Withers 1979).
A concern of non-profit theory has been to articulate the objectives of organisa-tions in the non-profit sector, given that they do not conform to the conventionaltheory of the firm which assumes that businesses aim to maximise profit. For ourpresent purposes, we propose a generalised model of the behaviour of a non-profitcultural institution that specifies the following five dimensions to the objectivefunction:
� objectives relating to artistic or curatorial quality or standards, sometimesdescribed as pursuit of ‘excellence’
� objectives relating to access – making their output available to as many andas wide a range of consumers as possible
� objectives relating to educational services, often through specific programmesto engage and educate young people or to enhance the learning experience oftheir consumers more generally
� objectives relating to knowledge – for museums, galleries and libraries thistypically refers to a range of research and informational functions in the fieldsof archaeology, history, cultural and social theory, anthropology and conserva-tion practice; for performing arts companies it usually relates to developmen-tal work on repertoire or performance practice
� objectives relating to social goals, for example, community-based organisa-tions with a mission to promote social inclusion and participation, or organi-sations devoted to arts in health care.
Within this generalised model, the pursuit of these multiple objectives – however,they are weighted in terms of overall decision-making – must still be seen to besubject to a set of financial constraints that ultimately require revenue from allsources over a given period to be equal to or greater than expenditure. In otherwords, there is an overriding requirement that an organisation must aim at financialsustainability if it is to remain in business.
The pursuit of all of the above objectives can be enhanced in one way oranother by technological innovation. But how is innovation as a process to beunderstood? Historically, the discourse on innovation has assumed it to be of afunctional, scientific or technological nature, reflected in indicators such as invest-ment in formal R&D or the number of patents awarded (NESTA 2007). But it isnow widely acknowledged that innovation is much broader than this, and that tradi-tional measures ignore innovations in sectors such as services which account for adominant and growing share of overall economic activity (Abreu et al. 2008,Department of Trade and Industry (DTI) 2007). Nevertheless, whilst an increasingnumber of studies point to distinctive innovative behaviours in the creative indus-tries (Handke 2008, Miles and Green 2008, Potts et al. 2008), there is little focusspecifically on organisations in the arts and cultural sector.
For our purposes in analysing new technologies as innovative practice in cul-tural organisations, we identify four broad categories of innovation that are commonto cultural institutions across the creative arts:
� Innovation in audience reach: this relates to the generation of new audiences,including through use of digital technologies such as live high-definition(HD) broadcasts in the case of theatre and opera companies, and providingonline access to collections in the case of art galleries and museums. Culturalinstitutions may also innovate in the depth of their engagement with audi-ences, for example, by using knowledge resources online to inform and edu-cate their consumers, by interacting with audiences on social networks, or byproviding opportunities presented by digital technology for audiences to getinvolved in artistic creation itself.
� Innovation in artform development: one of the most significant innovativecontributions cultural institutions can make is to the development of the art-form in which they operate, through the encouragement of new and experi-mental work in their programming.
� Innovation in value creation: cultural institutions are searching for new waysto measure the economic and cultural value they create for audiences andtheir wider group of stakeholders, and to translate these into terms that poli-cymakers, funding agencies, donors and private investors can relate to.
� Innovation in business management and governance: cultural organisationsface challenges in strategic management that are peculiar to the artistic or cul-tural area in which they operate; dealing with these challenges requires a con-stant review of the organisation’s business model and a search for innovativefinancing strategies in response to a changing funding environment.
We take these categories as definitive of the concept of innovation in cultural institu-tions, and use them in conjunction with the non-profit objective structures outlinedabove as a framework for considering some empirical evidence in the next section.
Evidence: how are new technologies being applied?
Although the term ‘new technologies’ in the cultural field could be used to describeany form of technical advance affecting cultural production from the invention ofthe printing press onwards, it is used nowadays as shorthand for new informationand communication technologies arising from two related late twentieth centurysources: the explosion in computational speed and capacity that has transformedday-to-day life in countless ways, and the advent of the Internet. These technologi-cal revolutions have affected the operations of cultural organisations in a number ofways. In this section, we consider these effects in terms of our above innovationclassification.
Audience reach
Apart from standard applications that have been adopted by businesses across theboard such as word processing, computerised accounting methods, etc. the first andmost obvious use of new technologies in cultural institutions has been the develop-ment of websites as a means of providing information for consumers and, whereappropriate, online booking and ticket handling facilities. For example, nationalmuseums in the UK have used their websites effectively to increase access (Loran2005), and a recent report by the Arts Council England (2009) indicates that 94%
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of the Council’s 869 Regularly Funded Organisations (RFOs) have websites witheither basic or ‘rich’ marketing functionality.
However, the more profound innovations come through the far-reaching poten-tial of new communications technologies that are constantly being introduced. Wecan interpret these developments in the first instance as relating to the first of ourinnovation categories – expanding the audience reach. There are three dimensionsto this sort of innovation (McCarthy and Jinnett 2001):
� audience broadening – capturing a larger share of the population alreadyknown to be audiences
� audience diversifying – attracting new groups of consumers that do not cur-rently attend
� audience deepening – increasing and/or intensifying the engagement of audi-ences. The latter may be achieved through enhanced interactivity between artsorganisations and audiences on social networks and creative websites on theone hand, and technological convergence, which is allowing audiences toaccess cultural experiences any time, any place and in any form on the other.
Looking specifically at the performing arts, we can see that one of the most signifi-cant forms of innovation in extending audience reach is the recent move towardsthe live broadcast2 of productions to audiences viewing the performance on televi-sion, in a cinema or online. Whilst the audiovisual recording of theatre productionshas been around for some time, enabling the selling of videos or DVDs of produc-tions, or their broadcast on television, the emphasis on live transmission direct fromtheatres is more recent. It has evolved as technology itself has evolved, enablinghigh-definition high-fidelity transmission via satellite or the web to audiences.Examples include the National Theatre’s NT Live project discussed further below,the Metropolitan Opera’s transmission of its performances to cinemas, and theBerlin Philharmonic Orchestra’s Digital Concert Hall project, whereby concerts arestreamed live or made available as video-on-demand on the web.
In museums and galleries, an important line of innovation to increase audiencereach has evolved through the services provided to visitors, for example, throughthe conversion of standardised interpretation materials such as wall texts into per-sonalised presentations using mobile hand-held devices. The technology for convey-ing such information has advanced rapidly with the introduction of specialisedaudio functions, speech-activated devices, and so on (Rocchi et al. 2004, Stock andZancanaro 2002). More widely, the web is being increasingly used as a means toextend access to collections and special exhibitions. A recent example is the GoogleArt project, a website enabling the visitor to take a virtual tour of some major artmuseums in Europe and the US and to view high-resolution images of works intheir collections. These developments lead to concepts such as the ‘museum withoutwalls’ (Hooper-Greenhill 2000, pp. 152–153) and indeed to the idea of an entirelyvirtual museum, which visitors attend only in cyberspace (Styliani et al. 2009).
Artform development
New technologies also contribute to innovation in artform development in variousbranches of the performing and visual arts. In the theatre, for example, directorsand designers mounting plays for the live stage are employing a variety of
audiovisual technologies to expand the expressive potential of their work. Sometheatre companies and groups have been using video and other audiovisual methodsin performances for some time. More experimental developments are exploring theuse of virtual realities and other technologies in theatre production. For example,the Pilot Theatre company based at York Theatre Royal has built a production of aplay on MySpace, and has a theatre hub in Second Life. Another example is the‘Adding Machine’ project at Bradley University in Illinois, which in March 2007merged real-time performances with the virtual to put actors from Florida andCanada on the stage in Illinois without their having to leave their university cam-puses. The production also involved virtual scenery, broadcast and recorded video,and avatar performers.3 Clearly, there is a great deal of potential for new technologyapplications in the theatre, although many such innovations are still very much intheir infancy.
The influence of new technologies in advancing an artform is particularlymarked in the field of music and audio production; innovation in both compositionand practice has been significant across all genres in recent years as a result of thearrival of new means for musical expression. Composers in classical, jazz, film androck/pop music genres use digital devices such as synthesisers, samplers, virtualrecorders and computer software such as MaxMSP to create complex and multilay-ered textures and to manipulate sounds from a variety of sources in their composi-tions. The availability of these technologies has extended musical boundaries,leading to the emergence of new genres and sub-genres, cross-cultural musicalforms and new modes of performance.
In the visual arts, new technologies have had a profound effect on an entire gen-eration of artists who practise in digital media and who have used a range of newforms of expression to transform visual culture. Although traditional modes ofdrawing, painting and sculpture are still widely pursued, visual artists have increas-ingly turned to the creative opportunities offered by video, sound, image manipula-tion and other technologies to produce works in forms and in media far removedfrom past practice. This has posed a challenge to which contemporary art museumshave responded, making them primary vehicles for conveying this aspect of artforminnovation to the public. Coping with these new modalities for contemporary arthas also required a reorientation of galleries’ functions as collecting and archivinginstitutions.
Value creation
Have new technologies contributed to innovation in value creation in cultural insti-tutions? Addressing this question is difficult because of ambiguities in defining howvalue is to be interpreted in this context. Cultural institutions create value in manyways and for many beneficiaries. The standard approach to interpreting such valuewithin economics is to distinguish between the private-good benefits that consumersderive from their own consumption of the goods and services produced and thepublic-good benefits that cultural institutions provide for the community and societyat large (Van der Ploeg 2006). But the interpretation of the value created by culturalenterprises has been placed into a wider context more recently as a result of thepromulgation of the concept of public value as a means of representing the value ofpublicly accountable organisations (Keaney 2006). It is clear that such organisationscreate value for the community through the aggregation of the individual cultural
experiences they provide for consumers, and this could be taken as one dimensionto the public value they create. Another dimension to their public value that hasattracted attention has been their role as agents of social inclusion; pressure hasmounted on museums, galleries and performing companies to demonstrate theirimpacts on a range of social indicators in the communities that they serve (Belfiore2004).
Yet, despite the clear role that cultural facilities play in building social capital,disquiet has been expressed that emphasis on the instrumental functions of arts andcultural organisations tends to overshadow their fundamental purpose – the creationof cultural value. Debate stimulated by John Holden’s and Robert Hewison’s workon the value of culture for Demos (Hewison 2006; Holden 2004) raised questionsabout the growing prominence of instrumental criteria for public-funding alloca-tions, at the expense of the essential artistic objectives of organisations seeking sup-port. This discussion was also raised in the context of cultural policy in the UnitedStates in the RAND Corporation’s report on public funding for the arts in America(McCarthy et al. 2004). In this study, the authors identified the intrinsic value ofthe arts as the missing link in assessing the value of artistic activities.
Hewison and Holden use the term ‘cultural value’ to describe all the types ofvalue generated by cultural activities including their economic benefits. A more pre-cise approach is to make an explicit distinction between economic and culturalvalue (Throsby 2001). Economic value is defined in this approach as the benefitthat can be measured in financial terms by the methods of economic analysis; itincludes both the private benefits enjoyed by cultural consumers that they pay forthrough the market, and the public-good benefits or positive externalities that areenjoyed by the community at large and that can be measured as aggregate willing-ness to pay (O’Brien 2010). Cultural value on the other hand refers to those aspectsof cultural life and experience that are important to people, but whose value to themcannot be expressed in monetary terms. The distinction between economic and cul-tural value thus defined is one that has been recognised in one way or another in anumber of disciplines in the humanities and social sciences concerned with the con-trast between the aesthetic and the commercial dimensions of art and culture (Hutterand Throsby 2008).
New technologies applied by a cultural organisation may open up new ways inwhich both the economic and the cultural value yielded by the organisation can bepresented to the funding agencies and the public at large. If such new technologiesenable the development of new revenue streams, the added value of the technolo-gies might be seen in an improvement in the organisation’s financial sustainability.More importantly, the technological innovation might itself generate new forms ofcultural value, providing wholly new cultural experiences to consumers. We shallsee an example of this in the case studies discussed below.
Business models
The changing environment in which cultural institutions operate has led to thedevelopment of new business models – the ways in which cultural institutions iden-tify their customers and their products, generate value, attract and keep their con-sumers, and define the services they perform (Falk and Sheppard 2006). Greffe(2008) points to digitisation, new consumption spaces and changes in the means ofcultural production as leading to the emergence of very different business models
from those that were characteristic of traditional forms of artistic organisation.These developments parallel the ways in which new business models are being putforward and adopted in the wider spheres of commerce and industry (Johnson et al.2008).
In the cultural arena, impetus towards the search for new business models arisesfrom both the demand and the supply side. With demand, the shift from anorganisation-centred to a more customer-centred orientation in business strategy(Andreasen and Kotler 2002, McNichol 2005) leads to new ways of interpretingvalue within the business model, promoting an approach that engages the consumermore. This move parallels a trend in cultural organisations towards audience devel-opment rather than product development in directing their resource allocation deci-sions (Rentschler et al. 2002). Such a move has been described by Weil (1999) as ashift from being about something to being about somebody.
On the supply side, it is primarily the advent of new technologies that hasprompted the growth of interest in restructuring traditional business models. In thecase of museums, for example, Minghetti et al. (2001) discuss the re-engineering ofthe role of museums in the cultural value chain; the engagement of such organisa-tions with new technologies has evolved from the provision simply of an electronicbrochure to their functioning as a multi-media platform serving a much wider com-munity of potential visitors. Indeed, the use of the value chain as an appropriateconcept for interpreting business models of cultural organisations may itself bechanging in the digital environment. Keeble (2008), for example, suggests that inthis environment, the idea of a value network is a more appropriate representationof the interrelationships between firms and individuals involved in the supply ofcultural goods and services.
The need for arts and cultural organisations to experiment with new businessmodels requires new funding streams with an appetite for risk (Smith 2010). Incases where there is a strong commercial prospect this may involve arts organisa-tions working out new project finance structures which compensate private investorsfor the risk they take. Where the risks are too great to attract private financiers, butthe sector stands to gain from the experiment (through wider lessons, for example),cultural organisations need to negotiate new funding streams with arts funders(Bakhshi et al. 2009). Bolton and Carrington (2007) argue that arts and culturalorganisations should import innovative debt and equity instruments, such as patientloans, quasi-equity and venture philanthropy, all of which are increasingly commonin the social enterprise sector. In order to do so, organisations will need to over-come problems caused by lack of financial planning skills and the paucity of data(Bolton and Cooper 2010).
Case studies
In a recent research project, the present authors examined the use of digital technol-ogies in two leading publicly-funded cultural institutions in the UK, the NationalTheatre and the Tate Gallery (Bakhshi and Throsby 2010). One was the NT Liveexperiment at the National Theatre, in which live performances are transmitted bysatellite to multiple cinema screens in the UK and Europe. The other was the use ofthe web by the Tate to provide access to a virtual presentation of an exhibition run-ning in one of its four galleries. Specifically, we studied the showing of a perfor-mance of the Racine play Phèdre by the National Theatre on 29 June 2009, and the
Tate’s web-based exhibition accompanying the Colour Chart show that ran at TateLiverpool for four months in the second half of 2009. In our research we undertookcomparative surveys of audiences at the showing of Phèdre both in the theatre andin cinemas, and of visitors to Colour Chart both in the gallery and online. Theresults of this research provide a case study of the way in which these new technol-ogies are contributing to innovation in these institutions. In the following, weoutline our findings under the four headings corresponding to our innovation classi-fication put forward above.
Innovation in audience reach
NT Live most obviously expanded the audience reach of the National Theatreby expanding its ‘virtual capacity’. The total audience for Phèdre in theNational’s Lyttelton Theatre on London’s Southbank over the play’s whole run –around 50,000 – was doubled in a single night through the screening of the per-formance on 29 June 2009 in cinemas throughout the UK and Europe. Almostone-third of cinema audiences in the UK gave the National Theatre’s locationbeing too far away as the main reason for why they had not seen Phèdre at thetheatre. A further 13% suggested that they had tried but been unable to get the-atre tickets.
That this expanded reach was achieved through audience broadening is sup-ported by the fact that only 41% of cinema audiences had been to the National The-atre in the previous 12 months, even though 91% had been to the theatre duringthis period, as indicated in Table 1. This compared with the vast majority of the in-theatre audience who had already visited the National in the previous year. But NTLive also allowed the National Theatre to diversify its audiences in several ways. Itis known, for example, that audiences for live theatre tend to be concentrated in themiddle range of the age distribution; young people are more likely to go to moviesor other entertainments, whilst older age groups may find it more difficult to accesstheatres in central-city locations. In the case of the NT Live experiment, the datashown in Table 1 indicate a marginal increase in the proportion of under-25s in the
Table 1. Audience characteristics for Phèdre production in theatre and cinema.
In-theatre audience(%)
In-cinema audience(%)
Proportion of audience who haveBeen to the theatre in last 12 months 96.4 91.3Been to the National Theatre in last 12months
94.1 41.3
Proportion of audience in age groupLess than 25 years 2.4 3.525–44 years 21.3 19.545–64 years 56.9 51.665 years or more 19.5 25.4Proportion of audience in income groupLess than £20,000 p.a. 21.4 33.2£20,000–49,000 p.a. 44.1 49.4£50,000 p.a. or more 34.6 17.5
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cinema compared to the theatre audience, and the proximity of cinemas to homeundoubtedly played a part in leading to a substantially greater representation ofolder people in the cinemas.
A more striking aspect of the audience diversification generated by NT Live isseen in its effect in drawing lower income individuals: one-third of cinema audi-ences had incomes of lower than £20,000 per year, compared with one-fifth in thecase of the theatre. No doubt the competitively priced £10 cinema tickets – signifi-cantly lower than tickets at the National Theatre – played a role here.4 Whilst mostof the cinema audiences had some experience of theatre-going, a small but signifi-cant minority – almost 10% – had not been to any theatre in the previous year.
The Tate’s online operations also allow it to broaden and diversify its audiencereach. Like NT Live, the Tate’s website increases its four galleries’ virtual capacity,allowing the public – as long as they have access to an Internet connection – toengage with the Tate’s cultural offer regardless of where they live. Over ColourChart’s four-month run at Tate Liverpool the website attracted 66,190 unique visitsfrom visitors throughout the world, compared with just more than 19,000 visitors atTate Liverpool.
Most of the expanded audience for Colour Chart was drawn from regular visi-tors to art galleries – over 87% of online visitors had attended a free exhibition at agallery somewhere in the previous 12 months, although only one in five had beento Tate Liverpool (Table 2). Nevertheless, almost two-thirds of the online audiencehad been to one or other of the Tate’s four galleries, indicating that visitors access-ing the website were significantly drawn from the gallery’s existing clientele. Mostof the online audience was derived from the young to middle-age range (25–44 yearolds); the youngest age group (less than 25 years) is well represented in the galleryaudience because of the attendance by school groups at the exhibition.
Echoing NT Live, probably the most striking example of audience diversifica-tion in the online audience for Colour Chart is evident in the proportion of lowerincome individuals amongst visitors to the website. The online offer attracted a sig-nificantly larger proportion of visitors earning less than £20,000 per year than didthe gallery exhibition (37% compared with 27%) and a correspondingly much lower
Table 2. Audience characteristics for Colour Chart exhibition in gallery and online.
In-gallery audience(%)
Online audience(%)
Proportion of audience who haveBeen to an art gallery in last 12 months 86.5 87.3Visited the Tate Liverpool in last 12 months 63.8 21.1Visited another Tate Gallery in last 12months
62.5 64.8
Proportion of audience in age groupLess than 25 years 15.6 6.825–44 years 36.1 47.145–64 years 40.0 40.665 years or more 7.7 5.6Proportion of audience in income groupLess than £20,000 p.a. 26.6 36.6£20,000–49,000 p.a. 50.0 49.5£50,000 p.a. or more 23.4 13.9
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share of highest income earners (14% of online visitors earning more than £50,000compared with 23% at the gallery).
Innovation in artform development
Both the National Theatre and the Tate are in the forefront of their respective fieldsin advancing their artforms. In the case of the National, its commitment to extend-ing the boundaries of contemporary theatre is evident in its programming decisions– between 2003 and 2008, 56% of all the plays it produced were written after theyear 2000, and around 45% of its productions were of plays by lesser-known con-temporary playwrights.5 Moreover, the National is able to apply innovative designand staging methods, especially through the work of its NT Studio operation whichacts as a development laboratory not just for the National but for the arts morewidely. Work at the cutting edge is encouraged, including exploration of the use ofnew technologies in sound, film and video in live drama.
Of course, setting the pace in artform development can be a risky business.Plays by ‘innovative’ writers are likely to be less popular amongst theatre audiencesthan is conventional drama, and revenues from staging such work will be moreuncertain. The National’s capacity to produce new work is facilitated by its size,which enables it to operate a repertory system with up to seven or eight productionsrunning in its three spaces at a given time. Commercial companies rarely stageinnovative drama by unknown writers; thus, advancing the theatrical artformremains by and large a responsibility to be shouldered by the subsidised sector, inwhich the National Theatre is a leading player.
Turning to the visual arts, we note that the Tate extends the boundaries of con-temporary art through the showing of work by innovative artists who are constantlyexploring new forms of artistic expression. The Turner Prize is one highly visibleprocess for a critical public assessment of current trends. New technologies used asinnovative means of artistic expression figure prominently in these trends – a num-ber of artists shown in exhibitions or acquired for the collection work with video,sound and mixed media, moving beyond traditional modes of practice in the direc-tions noted earlier.
More generally, the Tate’s commitment to extending the artform can be seen inthe extent to which it programmes exhibitions of contemporary art in its twoLondon and two regional galleries. As in the case of theatre, the showing of inno-vative work is a riskier proposition with lower revenue potential than is the case formore traditional programming. Nevertheless, 44% of the special exhibitions6
mounted at its two London galleries between 2003 and 2007 were classified as con-temporary, i.e. showing work produced since the 1970s.7
Innovation in value creation
We pointed out above that the analysis of value creation in cultural institutions canbe clarified if a distinction is maintained between economic value and culturalvalue. Our case studies illustrate how new technologies have contributed to innova-tion in both of these value formations. We discuss new sources of economic valuein the section below dealing with business model innovation. Here, we consider thegeneration of new forms of cultural value through the broadcasting of live theatreto cinemas or through online art exhibitions.
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Turning first to NT Live, we find that live broadcasts appear to have evolvedthe theatrical experience and to have created cultural value in ways that werenot anticipated by the National Theatre. In our surveys, we asked both theatreand cinema audiences a range of questions about their expectations of the pro-duction and compared these with what they actually experienced. Table 3 com-pares the proportions of the two audiences who had certain expectations and thecorresponding proportions who actually experienced these outcomes. As might beexpected, theatre audiences were significantly more likely than cinema audiencesto have expectations of an emotional or uplifting experience, to be absorbed inthe production and escape from the everyday. Yet, along all these dimensions itwas cinema audiences that more frequently claimed to have actually had theseexperiences.
Table 4 documents the corresponding results for the Tate case study. Here, theexpectations are not very strong for the gallery attendees and even weaker for theonline visitors. Of the three expectations listed in the table, only the hope of learn-ing more about art figured at all prominently. For both audiences, the actual experi-ence turned out to be more positive.
The results from this part of the surveys can be probed more deeply in terms ofthe theory of cultural value (Connor 1992, O’Brien 2010). Given the multi-facetednature of the value of culture, whether to individuals or to the society as a whole,Throsby (2001) has suggested disaggregating it into its constituent elements, includ-ing aesthetic, symbolic, spiritual and social components. If this is done it may bepossible, for a given cultural phenomenon experienced by a particular individual orgroup, to attribute a value to the experience under each of these dimensions. In thepresent study, audiences were asked about their agreement or disagreement with aseries of statements describing the experience they had in seeing the play or the artexhibition. Some of these statements can be taken as broadly congruent with differ-
Table 3. Expectations and actual outcomes: audiences for Phèdre.
To have an immersive experience 12.2 28.2 5.6 18.3To have an emotional experience 10.9 52.6 2.4 39.6To improve knowledge ofcontemporary art
45.7 50.3 19.0 34.9
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ent dimensions of cultural value. For example, if aesthetic appreciation and enjoy-ment is seen as an emotional experience, the statement ‘I had an emotionalresponse’ could be interpreted as a reaction to the broadly defined aesthetic contentof the relevant show. Likewise, the statements ‘I found new ways of seeing things’and ‘I was transported’ could be linked to symbolic and spiritual aspects of value,respectively, whilst social value is reflected in the benefit derived from experiencingart in the company of others.
Transformation of qualitative data into quantitative form is a common problemin research in the social sciences when attitudinal data are involved. A standard pro-cedure is to attach numerical values to responses to questions that have beendesigned using a Likert scale, assuming equidistance between items in the scale.Applying this approach to our statements relating to cultural value, we assign scoresof 2, 1, 0, �1, �2, respectively, to responses ranging from ‘strongly agree’ to‘strongly disagree’ for each statement and calculate the mean score for that state-ment. The results of this exercise for several representative statements are shown inTable 5.
For the National Theatre these results confirm the observation made above con-cerning the capacity of cinema transmission to generate new forms of cultural valuefor audiences, or at least to intensify existing forms of value creation. The aestheticvalue experienced by cinema audiences was especially strong; this appears to bedue in part to the fact that close-ups in the screened version of the play enabled amore immediate impact on audiences in all parts of the house, a degree of proxim-ity to the performers that is not available in the live theatre. This aspect of thescreened performance probably helps to explain the fact that a stronger emotionalimpact was felt by the cinema audience than by those in the theatre (Table 5); sucha result does not altogether undermine the view that being in the physical presenceof the actors is essential to the theatrical experience, since apparently the livenessand immediacy of the transmission made it seem to cinema audiences that theywere indeed in the same space as the performers on the stage. Not surprisingly, thesocial value derived from attending the respective performances was closely alignedbetween the two audiences.
By contrast, accessing an art exhibition on the web does not appear to openup such opportunities for the generation of cultural value, emphasising the factthat in the case of visual art, being in the actual presence of the art object isan overwhelmingly important aspect to the experience of it, and seeing the work
Table 5. Indicators of cultural value: audiences for Phèdre and Colour Chart(a).
Statement Culturalvalueindicated
National theatre Tate Gallery
In-theatreaudience
In-cinemaaudience
In-galleryaudience
Onlineaudience
Emotional response Aesthetic 0.85⁄⁄⁄ 1.29⁄⁄⁄ 0.31⁄⁄ 0.11⁄⁄New ways of seeing Symbolic 0.11⁄⁄⁄ 0.54⁄⁄⁄ 0.65 0.56Transported Spiritual 0.31⁄⁄⁄ 0.74⁄⁄⁄ �0.23 �0.34Seeing with others Social 0.50⁄ 0.58⁄ 0.66 –
Notes: (a) For calculation of scores, see text. The levels of significance of the differences between thepairs of means are indicated by ⁄p < 0.05; ⁄⁄p < 0.01; ⁄⁄⁄p < 0.001.
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on a computer screen is no substitute for the real thing. As Table 5 shows,imputed aesthetic value created by the online show was significantly smallerthan that for the viewers in the gallery. Note, however, that online visitors toColour Chart had access to, and made use of, a much wider range of informa-tion and services than was available to gallery-goers; for example, they couldfollow links to other artworks or access information about the artists, downloador stream multimedia content, upload their own photographs on Flickr, or play arelated game. These opportunities offered new forms of cultural experience tothese consumers.
Innovation in business models
For the theatre, the capacity of new technologies to create new sources of economicvalue is clear from our results. The ticket prices that cinema audiences were happyto pay for the theatre broadcasts, and their assertion that they would be willing topay more – in some cases substantially more – is a testament to the economic valuecreated through the National Theatre’s NT Live broadcasts. But it is too early tosay whether live screenings can be a sustainable, self-financing component of theNational’s business model. Nevertheless, the signs are good. Management hopesNT Live will break even by the end of its second season. Following the first seasonof five broadcasts, the NT Live initiative is going from strength to strength, withthe National announcing a second season of broadcasts for 2011. In due course, itis likely that these transmissions will provide a secure revenue stream for theTheatre.
The potential for art galleries to generate direct revenues from their onlineoperations over and above online ticket sales and shop purchases is less certain atthis point in time. It is true that online operations do create indirect revenues inso-far as they draw in visitors to the galleries, something we found evidence of inour Colour Chart case study. Moreover, they provide scope for raising revenuethrough sale of advertising, and at a broader level they promote the gallery brandwith possible commercial payoff in the longer run. But no major art gallery in theworld is charging online visitors to access the sort of content offered by the Tatein its Colour Chart exhibition. Consistent with this, the great majority of onlinevisitors to Colour Chart did not think it appropriate to pay to visit this or anyother exhibition website. However, an invitation to online visitors to make a dona-tion to the gallery presents a different picture: around one-half of online visitorssaid they would in principle be willing to make a donation to the Tate after seeingan exhibition website. Yet, despite this apparent willingness, when given theoption on the Colour Chart website to make an actual donation online, no visitorsdid so. Understanding this sharp difference between what online visitors say theyare willing to do and what they do in fact do should be a high priority for furtherresearch.
Notwithstanding the apparent differences that currently exist between the theatreand the visual arts in the potential for new technologies to generate new revenues,in both cases the pursuit of innovation in the production and distribution of theirproduct will require re-calibration of organisations’ business models to enable inte-gration of the new initiatives into existing business planning and to maximise thepotential for taking up new technological developments as they arise.
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Policy conclusions
The link between new communications technologies and cultural policy has beenacknowledged for some time. It formed the basis for the cultural policy put forwardby the Australian Government in its manifesto Creative Nation in 1994, for exam-ple, and underpinned the definition of the creative industries that was adopted bythe UK in 1997. Since then, cultural policies all over the world have movedincreasingly to recognise the potential of digital technologies in the creative econ-omy. For cultural institutions, as we have shown, new technologies open up possi-bilities for more effective pursuit of organisational goals. To the extent that theobjectives of arts funding bodies are congruent with those of cultural institutions –expanded audience reach, continued development of the artform, the creation ofpublic value and novel business models – there is scope for co-opting innovationinto the policy agenda.
Although cultural institutions require a somewhat different understanding ofinnovation from that which has evolved in scientific discourse, the innovationdilemma facing policymakers in all fields is the same: they want to know whichinnovations are worthy of their support, but the only sure way they can do this isto establish which ones are most likely to be successful. However, by the time suc-cess is assured, the innovations by definition do not need policy support to come tofruition. Policymakers have historically responded to this dilemma by enabling, andin some cases making, direct investments in innovation, accepting that some ofthese investments will fail. Intellectual property rights like patents and copyright areawarded to provide an incentive for the creation of new ideas, not all of which willbe commercially exploited. Tax credits are offered in many countries as a way ofencouraging scientific and technological research and development (R&D), and pub-lic agencies like the Technology Strategy Board in the UK work with universitiesand industry in conducting collaborative experimental R&D. Such policies are argu-ably part of a wider approach to innovation policy where the state works withgroups such as business and civil society to identify bottlenecks and barriers toinnovation and, where needed, makes financial contributions to enable experimenta-tion. But whilst this approach may be adopted in the economy at large, it is nothow public funders have traditionally seen their responsibility to the cultural sector.
In our view, funders such as the Department for Culture, Media and Sport andthe several Arts Councils in the UK, and the equivalent cultural funding agencies inother countries, should actively develop a learning culture where institutions areencouraged to publicise the findings of experiments which address questions ofinterest to the wider sector. This requires investment in the capacity of cultural insti-tutions to engage in what has been described as arts R&D (Bakhshi et al. 2009).
In order to encourage the pursuit of innovation in the arts along the lines dis-cussed in this paper, new public funding approaches will be required, such as theestablishment of an innovation fund specifically targeted at innovative projects tobe undertaken by cultural institutions. There are avenues for the inauguration ofsuch a fund in most developed countries, whether the initiative were to come fromthe arts and culture ministries or agencies, or through broader innovation and indus-try development mechanisms that typically exist in different parts of governmentadministration. In England, for example, such a fund could be set up by Arts Coun-cil, England, for this purpose, in partnership with the research councils; in this con-text, the knowledge transfer arms of the Arts and Humanities Research Council and
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the Economic and Social Research Council have particularly important roles to playin connecting cultural institutions and researchers and in building research capacityin the cultural sector more generally. Mindful of the constrained financing environ-ment in which most funders are currently operating around the world, targetedinvestment in R&D is also a cost-effective way that public funders can invest in thelong-term health of the cultural sector, supporting the sector’s capacity to innovatethrough investing in open prototypes and trials of the sort we have investigated inthe UK with the National Theatre and the Tate.
But to achieve this, arts funders need to adapt their own cultures too. First, theyneed to accept that some of the projects they invest in will appear to have ‘failed’when research questions are answered in the negative. Second, they must elevatethe status of research to a core function of their funding operations, rather thanregarding it as an ex post evaluation tool as at present. And third, funders must rec-ognise the processes of convergence that are leading institutions like the NationalTheatre to work closely with the likes of digital cinemas, and the Tate with produc-ers of multimedia content. These shifts will require traditional boundaries betweenfunders of different artforms to be broken down.
AcknowledgementsThe research on which this paper is based was financed by a grant from the NationalEndowment for Science, Technology and the Arts. The authors express their gratitude to theNational Theatre and the Tate Gallery for their cooperation in enabling this research toproceed. We also thank Melanie Pitkin, Nick Vanderkooi and Anita Zednik for researchassistance, and Mark Evans, Nobuko Kawashima, Juan Mateos-Garcia and two referees forcomments on earlier versions of this paper. The views expressed in this paper are solelythose of the authors and do not necessarily reflect those of any other individual ororganisation.
Notes1. There has been considerable debate in cultural policy circles as to the appropriate way
to conceptualise the role and function of the creative arts in the cultural economy; seefor example Garnham (2001), Hesmondhalgh (2007) and Throsby (2008a).
2. The term ‘broadcast’ to describe satellite transmissions of live performances to cinemasis commonly used, but strictly speaking such transmissions are not broadcast but nar-row-cast, since only intended recipients are able to receive them.
3. For further details, see http://addingmachine.bradley.edu4. Note that tickets to some National Theatre shows are priced at £10 when offered
through the Travelex scheme; however, this scheme did not apply to performances ofPhèdre.
5. More detailed data are contained in Bakhshi and Throsby (2010).6. That is, for which an entry fee was charged.7. See further in Bakhshi and Throsby (2010). It may be noted that in the visual arts,
unlike in the theatre, the promotion of contemporary work is not undertaken only orprimarily in the subsidised sector; commercial galleries and events such as art fairs areprominent in presenting work by innovative artists.
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