The consequences of the pandemic on museums were visible: closed and without public for months, they had to adapt to survive in this environment. How did they do so financially wise? Here is the leading theme of this interview. For this subject, we are pleased to interview Marek Prokůpek, a researcher who focuses on museum economics.
You can find the article in French here.
J. B. Could you present your research and what you focus on?
M. P : I am a researcher and lecturer in arts management and culture economics but my research focus has always been on museums. I am interested in museum management and finance and funding strategies. When I was a PhD student, my research was focused on performance measurements and evaluation in museums. Later, I have focused on fundraising and funding in museums. I did my post-doctorate in Paris with research focused on ethical aspects of fundraising in museums. I’m also interested in innovative business models of museums.
Lately, I have been focusing my research on new fundings strategies of museums, new entrepreneurial activities to see how the sector reacted due to the loss of subsidies and what kind of activities museums developed to cover losses from decreasing public funding.
My supervisor in Paris was François Mairesse and I have been inspired by his works.
J. B. Considering we are still in the pandemic; how did the first waves of COVID-19 affect the financing strategies of museums?
Generally, what this pandemic showed is the importance of public funding for museums and culture in general. Especially in continental Europe, the public funding for museums and other cultural sectors is quite strong, even though it has been decreasing even before the pandemic, as I also think it has been decreasing due to the global financial crisis in 2008 but still, public funding is quite strong in Europe. Compared to the USA where all museums are non-governmental institutions, they receive zero public funding or a very small amount. They must rely on earned incomes and private contributions from sponsors and philanthropists.
Here, in Europe, the situation is different, and the first wave of the pandemic has shown that the pressure for museums to be more entrepreneurial and to increase their earned income is not a good strategy when it comes to a crisis. Museums that have been dependent on ticket sales, renting spaces, merchandising, were the most impacted. The ones that had the “luxury” of public funding didn’t have to fire many employees. They were also in financial difficulties because they lost other revenues, but they had at least some public funding. Public funding will in my opinion continue to decrease in the following years.
J. B. Which lessons can be learned from the recent crisis (covid-19, the financial crisis of 2008..) for museums? As you underlined, the importance of public funding is a lesson, are there other lessons?
The lesson is also that museums should focus more on communication and keeping strong relationships with their communities. I use communities in the terms of local relationships or maybe stakeholders including the government and individuals who support the museum. I think that if they are aware of the benefits and value, they will be willing to help and contribute to museums during a crisis.
In my opinion, it’s a lesson learned that museums need to clearly advocate and demonstrate the value they bring to society as a whole and to individuals. It means to show their works; what museums do because many activities are hidden, and the general public isn’t really aware of these activities. From my point of view, it is important.
Another lesson learned is to be flexible, which can be difficult due to legal barriers; a public institution is funded by a government, or a region and it can be difficult to implement innovations and decisions
Another thing may be to think out of the box, to dare, to try new things, sometimes even fail but to try innovative things museums would not think about doing before.
J.B. At a time where the definition of a museum is reconsidered (ICOM, etc.), in what ways did the pandemic compel museums to change their models? As museums were bound to adapt, what can be the museum of the future?
I think that museums will and should still focus on their fundamental functions: to document our evolution as a society, evolution of art, to acquire, to collect artefacts and artworks and to make them accessible to a wider audience. They should also innovate and adapt to new environments.
They can focus even more on well-being, on being more inclusive. I believe museums can improve the lives of people and our well-being. They can focus on programs dedicated to public afield from museums or people with diseases. I’m always happy to see programs dedicated to seniors or orphans. This is the future of museums concerning their programming.
When it comes to management and finance, I think the trend all around the world – even before the pandemic but it emphasized it – is that governments will invest less in culture, therefore in museums as well, and there is the risk that it will push museums to be independent, to be entrepreneurial. Therefore, there is a risk that museums will be more market-oriented and will develop activities that are more focused on the market and on income generation, which was seen in the sector.
If this kind of transition appears, governments should at least develop fundamental tools and support for museums. For example, if they want museums to be more entrepreneurial, they should develop courses and education for museum professionals on how to do this transition and not to harm the main purpose and values of museums.
I have attended several webinars and discussions about museums and the COVID-19 pandemic. In many of them, they said that this pandemic has shown the importance and relevance of art and museums for our society, but I am not so sure about that. Of course, it is important for me, and I must say that during the lockdown I have missed going to museums and seeing exhibitions, but I am not sure if it is the same impression for the general public. I don’t think it had such a strong impact.
What I think museums can do is they can be even more engaged in education and societal issues. When it comes to financial activities, again even the museum directors are worried, because the national debts have been increasing so there will be more cuts. Culture will be one of the sectors where governments all around the world will make significant cuts in public spending. It can have strong consequences. I think now is an urgent time to be ready, prepared, and resilient to these external factors and difficulties. How to do it? From my point of view, there is not one recipe that will work for all museums. They must find their own strategies, their own ways to be successful and to thrive in these difficult environments.
For me, what is important is a strong connection to communities. For local authority museums that are smaller, I don’t think developing huge entrepreneurial activities is the way to succeed. From my point of view, they need to have efficient management and to involve the communities of the city they live in, to have a good relationship with the government. And then, if the museums have a strong relationship with their communities, then these communities can be willing to help through crowdfunding campaigns. For smaller museums, it may be difficult to find sponsors because they are more interested in the PR & marketing they receive as a reward for their contributions. The ability to clearly demonstrate the value and benefits of museums is the key aspect and will become even more important in the following years.
J. B. Synchronously with the changes made during the pandemic, blockchain technology is making its way through the museum world (NFT for example). What will be the balance between museums, towards the general public and the financial sphere?
These entrepreneurial activities were mostly seen until now with the superstar museums: Louvre, Tate Gallery or Van Gogh Museum in Amsterdam which was quite a pioneer. It is also related to the impact of the pandemic. The Van Gogh Museum receives only 15 per cent from public subsidies. During the pandemic, the Van Gogh Museum needed help from the government.
I think that museums more and more behave to a certain extent like companies. For example, the Van Gogh Museum and Centre Pompidou as well have developed paid consulting services for private collectors and other institutions to earn money. They are taking strategies, tools and models that have been commonly used in American museums and they adapted them in the European context such as endowment funds (the Louvre, Centre Pompidou…). They put themselves in the financial markets and invest.
As I am quite interested in the art market and I also teach about it, when I first heard about NFT, I thought it would be a bubble that would disappear quickly. My opinion changed considering how present it is. We are experiencing a bubble that will decrease in the future, but I think will remain to a certain extent. I was surprised that even the museum sector started using this strategy like Uffizi gallery, Hermitage Museum, and others. They have created NFT of masterworks of their collection as a series and sold it. I don’t think that NFT can solve the financial difficulties of museums, but they can be an additional income or a tool to communicate for their public relation or marketing, as NFT are interesting, and we can see it in mainstream media. Maybe in a few years, it will be considered completely normal to have museums that sell NFT. At the same time, they sell copies and reproductions of their masterworks as posters, so why not do it digitally? I think we still have to admit that it is in order to sell and to make money.
Maybe later we will see smaller museums adopting or following these activities, but bigger museums have more resources and better conditions to develop entrepreneurial activities. I’m a bit worried about the spread of entrepreneurial activities because the balance between what is okay and what is too much is very thin. If they invest so much energy in entrepreneurial activities, maybe they’ll shift away from their core mission? We also see a closer relationship between museums and the art market. For example,for example that the Louvre cooperates with Christie’s and Hotel Drouot.. Selling NFT to private collectors is also a strong connection with the art market.
It shows museums have been behaving more and more as commercial entities, companies. It might also send a signal to the general public and to governments that public support is not so needed. At least in my experience, politicians are not aware of cultural activities and the importance of museums. They focus on figures, on indicators on how museums contribute to the local economy. It is, for me, a very dangerous approach because it is in favour of big museums but what about smaller museums – important for their communities and our society- that don’t attract so many visitors.
This focus on entrepreneurial museums – if it’s too much – can be quite dangerous for the museum sector in my opinion.
J. B. Regarding the digital collection, we can see two strategies: open access and NFT. What can be said about the use of these two different strategies?
The Rijksmuseum in Amsterdam was quite the first to provide a digital collection for free. During the ICOM Kyoto conference, the collection director of the museum told us that they provided the collection for free – even for commercial purposes. She said that the reaction of the commercial sector was interesting. They were surprised and wanted to make sure they could use it for free. They were quite grateful and some of them became sponsors.
We have to look at this aspect from different angles. Personally, I would say to provide it for free as it is great to make it accessible but at the same time, as we discussed before, museums are having financial difficulties, so they try to increase their revenue from different activities.
Making digital collection accessible for everyone is a great thing and it increases inclusion, interest in art or other fields among the general public, in my opinion.
Thinking about it now, I think people buy NFT for ownership and not aesthetic value. If a museum decided to make an accessible digital copy of artwork on their website for free and create NFT also, I still think people would buy NFT even though it is accessible online. For example, the masterworks that Uffizi Gallery and Hermitage Museum sold can be found online. What is important for these buyers is the unique digital code and the possibility of the value increasing.
These two strategies are not going against each other, both can be developed at the same time. In my point of view, selling NFT in museums doesn’t bring any other value than money, which is understandable as museums need to find new sources of funding. It is a commercial activity. Yet, the Hermitage Museum is also developing its digital collection as there are two NFT: one for the museum and one for the buyer.
J. B. Are there any Czech museums that have integrated NFT?
I’m not aware of any museums that integrated NFT. In general, in Czech Republic, museums are not very entrepreneurial. First, they haven’t been needing it so far because they still have sources from public subsidies. They also say that they don’t have time for these entrepreneurial activities. I have been doing research about the impact of the first wave of the pandemic on Czech art and culture sectors and in museums, so I have conducted several interviews with museum directors. I tried to find out whether and how the pandemic changed the business model of these institutions and whether pandemic has been a starting point to innovate. The research showed that it wasn’t a starting point for innovation in the business model. The only thing is they have increased their online activities and museum workers have been forced to quickly learn and develop skills for digital activities.
I’m not aware of any Czech museum that would be entrepreneurial like a French museum as the Louvre or Centre Pompidou.
To discover more
BETZLER, D., LOOTS, E., PROKŮPEK, M., MARQUES, L.,GRAFENAUER, P. (2021). COVID-19 and the arts and cultural sectors: investigating countries’ contextual factors and early policy measures. International journal of cultural policy, 27(6), 796-814.
HORŇÁKOVÁ, L., PROKŮPEK, M. (2021). Acquisition Fund: An unrecognised treasure within the cultural policy of the Czech Republic. Museology & Cultural Heritage/Muzeologia a Kulturne Dedicstvo, 9(2).
PROKŮPEK, M. How Neoliberalism Shapes Contemporary Art Market: Structure, Assessment, and Scope. In : Pla, A. H. (2021). Topics on Art and Money. Vernon Press.PROKŮPEK M., GROSMAN J., The COVID-19 pandemic and cultural industries in the Czech Republic dans Salvador, E., Navarrete, T., & Srakar, A. (2021). Cultural Industries and the COVID-19 Pandemic: A European Focus (1st ed.). Routledge. https://doi.org/10.4324/9781003128274