Mobile Business Models in a 2.0 Economy [1]

Nancy Proctor

Mobile is changing the way museums do business—whether they are aware of it or not. As “the people formerly known as the audience” [2] increasingly expect information and experiences on demand, wherever and whenever they are, the market is growing for mobile products and services for and about museums. At the same time, museums are beginning to think of audiences in a more granular way, recognizing more variation in needs and interests among their visitors, partners and collaborators, both online and on-site. As a result, museums aspire to create mobile products and service that better suit specific audience groups and contexts. In response, a wide range of new players has entered the mobile scene, loosening the grip of the handful of audio tour companies who dominated the field for over 50 years. Start-up app companies and smartphone manufacturers, mobile network providers and social media gurus, students, freelance content developers, open data protagonists, “citizen curators,” new alliances among cultural organizations to co-create content—it seems that nearly every day new forces are emerging to radically reconfigure both the museum mobile landscape and its business models. [3]

A review of the business strategies developed over the 60-year history of the audio tour [4] shows that some persist in this Mobile 2.0 economy; others are the result of new functions possible on handheld computing platforms and the new business interests that are bringing them to market. What hasn’t changed is that whether “free” or “paid for” by the end-user, there is always a cost to the museum to develop a mobile program. Following is a brief discussion of some of the main models museums are adopting to pay for their new mobile products and services, while also achieving their educational, outreach, and interpretive goals.

Omnibus: One way museums have struck a balance between their missions and the need for revenue has been to tie less popular mobile programs—usually the permanent collection audio tours—to the more profitable blockbuster exhibition audio or multimedia tours in “omnibus” contracts with (generally larger) tour companies. In this kind of deal, mobile interpretation of the permanent collection is effectively subsidized by the higher revenues from temporary exhibition tours, which “sell” better. The blockbuster tours are rented to visitors at a relatively high take-up rate (usually over 15% of visitors take the tour, up to 85% or more in the most successful tours), and some percentage of the profit from the temporary exhibition tour sales is plowed back in to creating permanent exhibition tours: in effect, the audio tour vendor is incentivized to produce the less profitable permanent collection audio tour in exchange for the opportunity to manage the more lucrative and PR-worthy blockbuster exhibition contracts. Some economies of scale can be achieved by using the same hardware and distribution infrastructure for both, but profit margins are reduced by piggybacking the permanent collection program on the more mass-market blockbuster tours. For the app incarnation of this business model, see “Freemium.”

Freemium: The new “freemium” model of the Web 2.0 economy has been greeted with enthusiasm by many cultural professionals (see, for example, DaPonte 2010), but so far there are very few examples in the museum market. The National Constitution Center’s app has basic visiting information, the Constitution, and links to current political news; it is free to download, but then charges $0.99 for each themed tour within the app, offering free sample stops for each one. MoMA has just introduced its “MoMA Books” app for the iPad, which is free to download but then requires an in-app purchase to download a complete book from the MoMA library. A variant on the omnibus model, freemium combines the concepts of the “free” and “premium” content in one digital product: educational, outreach and revenue imperatives are balanced by providing the app with some amount of free “loss-leader” content (e.g., from the permanent collection, or, as in the case of the MoMA Books app, sample chapter content), with the possibility to make an “in-app purchase” to add more content at a fee (e.g., for the special exhibition; the full book).

Subscription: In February 2011, iTunes introduced a subscription model for its app-based content. Launched with The Daily news iPad app from News Corporation, this model enables publishers to sell an app that will be updated periodically with new content at a recurring fee to the end-user. This suggests interesting new possibilities for museums to offer not just digital magazines through iTunes, but also subscriptions to apps and digital catalogues or other “ePubs” that are regularly updated. There are two catches: Apple takes 30% of subscription revenue (the same amount they garner from every app sale through iTunes), and perhaps more significantly for museums, these new products may require a new workflow to support the process of updating content. In the typical print production model, once a product has been published, only new editions and print runs permit content changes. Will museum book and catalogue teams be willing and able to adopt a magazine-style process in order to attract additional revenues beyond the initial product sale? Only time will tell, but it is certain that periodical publishers everywhere will be looking for alternatives to iTunes for distributing their digital products so they can cash in on the recurring revenues of the subscription model without having to pay such a hefty commission to Apple. As a result, museums can expect the number of online distribution channels for their downloadable digital products to increase in future.

Open Data: In response to an earlier essay on which this one is based and which was published as part of the proceedings for Museums and the Web 2011, Glen Barnes from app company MyTours suggested an additional new business model: making the museum’s data and content available to third parties to develop mobile apps and other products “for” the museum and its audiences. [5] While museums might justifiably keep their physical collections under lock and key for their own and the longer-term public good, they are being asked with increasing frequency to open their data and digital collections for use by others. The White House’s Open.Gov initiative calls for greater openness and transparency by the Federal Government in the United States, and includes a directive to federal agencies, which includes federally-funded museums, to publish data online, [6] as well as a strategy for making data more accessible, and more data available. [7]

Barnes argues that the benefits outweigh the loss of control for museums, and offers these examples of possible outcomes of museums opening their data:

  • A company with an existing tour app could aggregate tours from various museums into one app that allows users to find all of the nearby museum tours. This could open the possibility of your content being found by people who might not otherwise know about your museum.
  • Nokia fans/hackers are annoyed that none of the apps for museums are coming out for the Symbian platform… They develop an app that makes the content available on their device.
  • Of course it can’t all be roses… A content farm scrapes the content, republishes it and wraps a bunch of [ads] around the content.

In his essay in this volume, Koven Smith argues that museums have more control than they may think in the “Open Data” model: by controlling what data they release and in what format—and through a judicious use of creative commons copyrights—museums can influence to a large extent the kind of mobile products that are created with their content. [8] The Brooklyn Museum conducted an early experiment with this model, enabling Iconoclash Media to develop an app for the collection with the Museum’s Open Collection API. [9] By inspiring new kinds of partnership and revenue streams, this model offers perhaps the most potential for business innovation in the mobile sector.

Sponsorship: Another traditional model is sponsorship, which covers part or all of the cost of the mobile program’s creation and distribution, allowing the museum to offer the product or service to visitors without charge or at a reduced fee. This model may also free up the mobile content for broader distribution without being in conflict with a revenue source for the museum. In the case of museum tours, the usage rate for the sponsored tour is significantly higher than those without subsidy. For example, when MoMA’s audio program was offered for free after the museum reopened in 2004, courtesy of a grant from Bloomberg, the tour usage rate went from 5–8% of visitors to 31%, and now reaches more than 45% with the broader distribution through MoMA Wi Fi and other channels. Similarly, for several years, AT&T sponsored SFMOMA Artcasts, the museum’s podcast series (though that sponsorship was eventually transferred to a higher ticket funding opportunity). (Burnette, 2011)

Advertising-Supported: Until now, sponsorship has been the limit of the introduction of commercial brands into museum settings, unlike symphonies, theater, and ballet, which distribute programs where advertising is plentiful. One example of an early experiment with in-app advertising is the Indianapolis Museum of Art’s 100 Acres tour. The museum agreed to a “media-swap” with the local Sunday paper: in exchange for publicity for the mobile website in the newspaper, a “disappearing” banner ad is seen briefly at the bottom of the map each time the map is accessed in the app.

Outside the museum world, some app and mobile website publishing platforms that are free to the publishers and/or users include the platform owner’s logo, advertising, or the possibility of selling advertising as an indirect way of paying the platform authors/owners for the use of their service (e.g., WireNode, Mobify; many Twitter apps are free to end-users but include advertising banners). But so far this funding source has not been fully explored by the museum community.

Membership Benefit: Some museums use audio tours, provided at a fee to most visitors, as a membership benefit. The Royal Academy in London, for example, provides free audio tours along with free entry to their exhibitions for members, enabling them to skip the line to get into blockbuster shows, as well. This is a good example of leveraging a mobile product for its “network effects”: in addition to its direct revenue potential, the audio tour adds an incentive to join the museum and thereby drives an additional revenue stream above and beyond tour rental fees.

Donations: Mobile giving got its biggest boost in public awareness from the Red Cross’s text donations to Haiti campaign: in less than 10 days, over $30 million had been donated in $10 increments from 3 million unique donors, with additional donor development benefits for the non-profit: 95% of the text-message donors were “first-time donors to the American Red Cross,” and “20,000 opted in to receive ongoing email communications from the nonprofit organization.” (Mobilemarketer, 2010) These spectacular results attracted many museums to try mobile giving, but, as Megan Weintraub, new media manager for Oxfam, said to the NonProfit Times, “Not everybody is the Red Cross. You don’t have Michelle Obama telling you to text with other organizations.” The decidedly more modest results from mobile giving at cultural organizations have yielded the most with event-driven campaigns that make extensive use of traditional marketing and advertising outlets to publicize the cause and its donation short code. The Philips Collection solicited text message donations of $5 and $10 to help restore the museum after the September 2010 fire. (ArtInfo, 2010) Anyone contemplating mobile giving campaigns must also take into account the marketing overheads required to make them successful: signage, traditional media publicity for the campaign, and staff time are all costs to be weighed against new donation revenues. Nonetheless, mobile giving offers benefits beyond just money: increases in new donors, members and opt-ins to the museum’s mailing list should also be factored in as potential additional “network effects” that can result from a well-designed campaign.

The Value Is in the Network

In the summer of 2010, Fast Company blogger Aaron Shapiro wrote:

Apple CEO Steve Jobs has said, the App Store has generated more than $1 billion in revenue for developers. That sounds like a big number. But… [o]ne billion dollars in revenue for the approximately 225,000 apps is $4,444 per app—significantly less than an app costs to develop… A typical iPhone app costs $35,000 to develop. The median paid app earns $682 per year after Apple takes its cut. With these calculations for the typical paid app, it takes 51 years to break even. It’s not any better for free apps. A free app also costs about $35,000 to develop. But there are so many free iPhone apps that at a rate of 2 seconds per app, it would take approximately 34 hours for someone to check out each one. That’s not great odds for a revenue model based on advertising. (Fast Company, 2010)

It is becoming clear that museums are as unlikely as any other developer to “get rich quick” on mobile apps. But scant financial returns on mobile products are really nothing new to the museum field: with a few exceptions among the most visited cultural attractions, revenues have not been the most significant benefits to the museum from its audio tours and their progeny. Nonetheless, museums have been early adopters and innovators on the mobile space for some 60 years. The investment required for mobile programs has commonly been justified because of mobile’s unique ability to meet other needs of the museum’s mission: offering greater possibilities for extending outreach, improving the quality and accessibility of interpretation and education, and supporting other revenue initiatives and connecting platforms to create a whole greater than the sum of its parts.

The metrics of success for mobile, like its goals, are therefore not just the number of downloads and dollars received, but also the extent to which the mobile program is able to engage audiences and support other museum programs, activities and revenue streams. These outcomes are clearly much more difficult to quantify, but devising metrics, measuring tools, and a management culture that evaluates and values them should be a focus of effort by the museum community as we experiment with new mobile business models. As Max Anderson has indicated, the “network effects” possible when mission-driven initiatives are connected in a healthy eco-system show that there is more than just “red ink” to the business of mobiles in museums. (Anderson, 2007)


  1. This chapter is an updated and expanded version of a portion of the essay, “Getting On (not under) the Mobile 2.0 Bus: Emerging issues in the mobile business model” co-written with Allegra Burnette, Peter Samis and Rich Cherry and published in J. Trant and D. Bearman (eds). Museums and the Web 2011: Proceedings. Toronto: Archives & Museum Informatics, March 31, 2011. The author would like to thank her collaborators for their contribution to this current version.
  2. Comment by Bill Thompson of the BBC during his interview by David Rowan of Wired Magazine as part of the conference, “Mobile for the Cultural Sector,” London, 8 March 2011, consulted 28 March, 2011.
  3. In this volume, Peter Samis (“Models and Misnomers for Mobile Production”) discusses how these new entrants to the field have exploded the traditional mobile content production model for museums.
  4. Loic Tallon found what may be the earliest audio tour in a museum, the 1952 multilingual audio tour of an exhibition “Vermeer: Real or Fake” at the Stedelijke Museum in Amsterdam: Gescheidenis (History), “Draadloze rondleiding in het Amsterdamse Stedelijke Museum,” film clip from Polygoon Hollands Nieuws, July 28, 1952. Details at Consulted January 30, 2011. Tallon blogged about this discovery at (Tallon 2009).
  5. Glen Barnes, comment on the online paper, “Getting On (not Under) the Mobile 2.0 Bus: Emerging Issues in the Mobile Business Model |”,
  6. White House, “Open Government Policy”, Open Government Initiative, consulted 28 March 2011.
  7. Office of E-Government and IT, Office of Management and Budget, “Data.Gov Concept of Operations”, consulted 28 March 2011.
  8. Koven Smith, “Mobile Experience Design: What’s Your Roll-Out Strategy?” in this volume.
  9. The trajectory of this partnership, including the branding issues that arose when the museum released its own app and the subsequent decision to temporarily remove the Iconoclash app (pending re-release under a different developer name and branding) has been charted through the Brooklyn Museum’s blog; see especially: “Brooklyn Museum API: the iPhone app” 17 April 2009 and “App Store Confusion Necessitates API Changes” 1 December 2010 Consulted 28 March 2011.


  • Anderson, Maxwell L. “Prescriptions for Art Museums in the Decade Ahead,” CURATOR: The Museum Journal, Volume 50, Number 1, January 2007.
  • Samis, Peter, “Models and Misnomers for Mobile Production” in Proctor, Nancy, ed., Mobile Apps for Museums: The AAM Guide to Planning and Strategy, Washington, DC: 2011, The AAM Press, American Association of Museums.
  • Smith, Koven, “Mobile Experience Design: What’s Your Roll-Out Strategy?” in Proctor, Nancy, ed., Mobile Apps for Museums: The AAM Guide to Planning and Strategy, Washington, DC: 2011, The AAM Press, American Association of Museums.

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