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Cover image for Mini Report #2: Market Research - Reviewing the GLAM & open knowledge spaces for monetization methods.

Mini Report #2: Market Research - Reviewing the GLAM & open knowledge spaces for monetization methods.

brandon_mhzcurationist profile image Brandon J. Roy Updated on ・6 min read

Brief Summary of the Sustainable Contributor Payment Study Goals

MHz Curationist received a three-year grant from the MHz Foundation to cover initial platform development and three years of operating costs, at which point they will consider continued funding to some level. By the end of that period, the MHz Foundation hopes to find a low baseline cost for Curationist that can be covered by its endowment, with an understanding that this will not cover iterative product enhancements, programming, or payment to contributors to the platform. At the end of the three-year period, which ends August 2022, a technical platform will exist that MHz Foundation will be in a position to sustain the baseline ongoing costs of; covering additional costs will be necessary for the site to flourish. If a sustainable funding source cannot be developed, the site, and all of the work that has gone into creating it, will cease to maximize its potential.

It is important to note that in the Curationist platform’s existing beta state, all site contributions are done by paid staff. This hourly payment rate is certainly not sustainable at scale. There are many ways that platforms choose to incentivize their users’ production of content. Some choose not to monetarily incentivize users, and to find non-monetary methods. We know that for our site to reach a level of content production that will make it viable, this issue needs to be addressed clearly and carefully, and with the utmost respect for those dedicating their time and talents.

MHz Curationist is seeking partners who can contribute donations, sponsorship, in-kind technical support, along with a case study and demo development. Moreover, it is seeking a pathway to determining the proper mix of donation, sponsorship, in-kind donations, and micropayment contributions that will allow it to maximize its potential after launch.

Brief summary of MHz Curationist

MHz Curationist is a mission-driven, not-for-profit arts and culture platform online. MHz Curationist offers an open access space for contributors to collaboratively curate arts and cultural content. The MHz Curationist platform is intended to be clear, easy to use, and entertaining.

MHz Curationist is poised to become an important contributor to, and next-generation platform and publisher of, open access cultural content. The site is contributed to, and managed by, a collaborative team of freelancers enthusiastic about sharing arts and culture in dialogue with others.

Ideally, digital organizations like MHz Curationist receive micro-donations from site users to financially support operations. However, it is important to consider the entire ecosystem necessary to maintain the platform. Operating costs are ongoing and include expenditures for hosting, design, development, and administrative management.

In addition to costs for overhead, there are the costs affiliated with content creation.

Financial sustainability for MHz Curationist requires funding that will cover both overhead and content creation.

We set out to understand funding models employed by like-kind open-access platforms currently in operation. Specifically, we sought answers to the following questions:

  • How are the organizations funded? Grants and/or corporate funding?
  • How are staff and other operating expenses covered?
  • How do the organizations incentivize people to produce content?
  • Do the organizations provide paid services?
  • Do the organizations accept micropayments and do these payments only go to the content producers?

To gain a better understanding of funding options available, and how our peers are finding the proper balance, we took a close look at how six like-minded open-access organizations sustain their operations.

Specifically, we studied two organizations from the GLAM sector (galleries, libraries, archives, and museums): Free Music Archive (an organization that provides free and royalty-free music from independent artists) and Internet Archive (a nonprofit library of millions of free books, movies, software, music, websites, and more .

Additionally, we included two open-knowledge websites in our study: Smarthistory (an organization that makes the history of art accessible and engaging to more people in more places than any other publisher) and Khan Academy (a nonprofit with the mission to provide a free, world-class education for anyone, anywhere).

Lastly, we studied the Wikimedia Foundation (providing the essential infrastructure for free knowledge) and WikiArt (a visual art encyclopedia, formerly known as WikiPaintings, with the primary goal of making the world’s art accessible to anyone, anywhere). WikiArt is unaffiliated with the Wikimedia Foundation, though they are both part of the wiki movement. The Wikimedia Foundation organization and its websites stand apart from the other four organizations in our study in terms of scope and marketplace recognition, not to mention funding. Nevertheless, the underlying principles that form its foundation are in alignment with those governing MHz Curationist, thus we included the Wikimedia Foundation in our study.

To gather financial data on these six organizations, we examined the most recent IRS Form 990 that is available for each organization that is based out of the United States. Free Music Archive is headquartered in the Netherlands, and WikiArt in the Ukraine.

Of the six organizations studied, only one (Free Music Archive) accepts micropayments as a source of funding. Five of the six organizations (all except WikiArt) are funded by grants, with Khan Academy and Internet Archive earning supplemental funding from program service revenue. WikiArt is funded entirely through advertising revenue.

To supplement its grant funding, Khan Academy and Internet Archive draw 37% and 40% of their total revenue from the sale of paid services, respectively. Similarly, Free Music Archive supplements its income from paid services, however data was incomplete as to how much of their total funding consists of service fees.

When it comes to content creation, three of the six organizations in our study rely on volunteers to produce content for free: Wikimedia, WikiArt, and Smarthistory. Content creators for Khan Academy and Internet Archive are paid, whereas the musicians who produce content for Free Music Archive are paid through micropayments.

If Not Micropayments, Then How?

Finding only one of the peer organization organizations we investigated accepting micropayments, we returned to our question “How do the organizations incentivize people to produce content?”

Of the rest of the organizations, the most data existed for Wikipedia. The Wall Street Journal referenced a 2009 study on the subject in which they determined the following:

“Altruism and fact-checking are the top motivations of contributors, the study found. About 73% indicated "I like the idea of sharing knowledge and want to contribute to it," while 69% said "I saw an error I wanted to fix."

“When asked what would make them more likely to contribute to the site, the top response was if "I knew there were specific topic areas that needed my help" (41%), followed by "It was clear to me that other people would benefit from my efforts" (36%). Thirty-two percent marked "Other/don’t know/don't want to say."”

Our own explorations into micropayments will help us to determine whether it is the proper path for us, but whether it is or not, the insights on why people take the time to contribute to Wikimedia Foundation sites will prove invaluable as well.

Conclusions

Our study of like-kind organizations that are curating content on open-source platforms reveals that none of these organizations are sustaining themselves through micropayments alone. All of these organizations are funding their operations through a blend of grants, advertising, and revenue from the sale of paid services. While the two largest organizations that we studied (Wikimedia and WikiArt) have a no-cost content creation platform, three of the organizations have found it necessary to financially incentivize content creators.

It is thus reasonable to conclude that a sustainable funding model for MHz Curationist will include a blend of revenue streams, such as grants, corporate sponsorships and donations, fee-for-service, micro-payments, and advertising.

Next Steps

Next, we need to gain a better understanding of the universe of grant opportunities available to MHz Curationist. We will develop a target list of prospective corporate sponsors and corresponding donation amounts. Additionally, we need to consider our willingness to offer advertising on our platform, and what fee-for-service might look like on MHz Curationist. Lastly, we need to examine how best to incorporate micropayments into the user experience.

Ultimately, it is important to us that we stay true to our understanding of the benefits of open access platforms. It is critical that the democratization of knowledge and understanding come at the lowest cost possible. By funding our operation primarily through grants and corporate sponsorships, we will diminish any barriers to enjoyment of art and culture by all.

Article in reference:

ttp://blogs.wsj.com/digits/2009/08/31/only-13-of-wikipedia-contributors-are-women-study-says/

Discussion (6)

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Janos Farkas

Hi Brandon!

Well written, factual, and realistic assessment!

You stated in your report: "MHz Curationist is seeking partners who can contribute donations, sponsorship, in-kind technical support, along with a case study and demo development."

We would be interested in partnering and would offer in-kind technical support, case study, and demo development.

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Hilary Osborne

Hi Janos,

Thank you so much for your reply; I would love to chat about this further. Please contact me via LinkedIn: linkedin.com/in/hbosborne.

Best,

Hilary Osborne
Director of Communications and Strategic Partnerships
MHz Curationist

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Christian Dawson

Hey Janos! Thanks for your email. I'm back from holiday and received a copy of your talk with Hilary. I will drop you a line later today! Thanks so much for connecting.

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Janos Farkas

Hi Christian,

Looking forward to re-connect with you and with Hilary.

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Chris Lawrence

Good stuff. Micropayments are much newer/experimental than those other revenue models. And I agree that a healthy and sustainable non-profit will have a bouquet of funding streams. But I am curious how you all might help grow the use of micropayments. Where do those work best? What motivates users? What smaller overhead costs might it help pay? Are micropayments a potential way to raise unrestricted/operational funds? How might a fundraising campaign leverage micropayments?

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Christian Dawson

Chris, I'm so glad you asked. In our next mini-report, we plan on providing our thoughts there. The challenge we have had so far, and we'd love help from this community on this one, is finding strong analogues in this space for the use of micropayments on a nonprofit platform in ways that provide us with a clear model for the best ways to model out usage on both the operations side and the content creation incentive side. We have some pretty good examples in the for-profit world. but little in our space. At the moment, I'm forecasting that we will pursue a method that focuses on using mocropayments to incentivize content, with a percentage set aside to cover smaller overhead costs, but I'm having a tougher time finding examples that would show us a path forward on unrestricted/operational funds.