Over the past few years, museums around the world have been subjected to severe tests. According to recent studies by UNESCO and the International Council of Museums (ICOM), the museum sector worldwide has been particularly hard hit by the COVID-19 pandemic: nearly 90% of the world’s museums, or more than 85,000 institutions, closed their doors for varying lengths of time during the crisis, and nearly 13% may never reopen.

In the face of this daunting reality, the mobile web is spearheading a new trend in museum development. It is reported that the coverage rate of TikTok content related to China’s first-grade and second-grade museums reached 98.64% in May 2022. Museum-based video content on TikTok gained more than 1.2 billion likes and 39.4 billion views, equivalent to 70 times the annual number of visitors received by museums in China. In this context, the traditional path of museum development needs to be re-evaluated. 

“Empirical constants” become less reliable

The process of bringing a museum into service can be lengthy, due in large part to the fact that construction costs account for a disproportionate share of upfront investment. This explains why museums are classified as an asset-intensive industry.

According to the museum regulations issued by the State Council of the PRC in 2015, museums in China can be divided in two categories: state-owned museums and non-state-owned museums. Normal operating expenses of state-owned museums are included in the local fiscal budget; sponsors of non-state-owned museums must ensure funding for the normal operation of the museums. The Chinese government encourages the establishment of public welfare funds to provide funding for museums, and museums are encouraged to raise funds through multiple channels in order to promote their own development. 

Regardless of the nature of a museum, conventional museum construction tends to focus on the so-called “experience constants,” using museums of the same type as a frame of reference and budgeting for potential premiums. This is based on the “long tail” assumption that demand is concentrated in a small number of popular products or services, while cumulative effect is negligible.

In the era of the mobile web, curators and museum investors must reflect on the revolutionary changes brought to the museum sector. Tail-end demand can be huge and sustained, and may even accumulate to reach a “sky-high” level. In this case, “empirical constants” can be unreliable. Prior to the opening of a museum, a number of issues should be discussed, such as the updating and maintenance of post-production digital products, and the sustainability of the attention economy. The feasibility and cost-effectiveness of projects should be analyzed in an exhaustive manner so as to achieve appropriate allocation of funding, the sustainable development of museums, and ultimately, a win-win situation for social and economic benefits. 

Technology support is not a sunk cost

Museums in the digital age cannot avoid considering the cost of technology. Digital resources have become an integral component of museum development, and the transformation of digital resources into assets reflects the economic nature of museum collections. Therefore, the preservation and utilization of cultural relics should go hand in hand.

Today, technological means are advancing at an ever-increasing rate. Blockchains are a double-edged sword that decentralizes museums while giving them all a chance to better develop. AI technology imparts “life” to museum collections and allows audiences to “travel” through time and space in an instant. Facilitated by the combination of computer technology, artificial intelligence, human-computer interaction, bionics and many other technologies, virtual reality can rapidly enable collections to go from static to dynamic and transition from ancient to modern times. The digitization of collections also makes it possible to exhibit all collected items in a suitable space. Technological progress has paid dividends to museums; input into technology upgrades, initially deemed a sunk cost, has instead become the “cost of opportunities.” 

That being said, heavy upfront technology investment is not a must for all museums. According to standards set by the ICOM, there are 15 types of museums, including aquarium, zoo, archaeological museum, art museum, botanical garden, museum of natural history, museum of science and technology, etc. Which types of museums require intensive technology inputs to better serve their audiences and gain market recognition? Which types of museums can achieve collection sharing and enrich the contextual experience of their audiences through technological means? These questions need to be further explored.

“Peripheral products” bring marginal benefits

People naturally expect to generate output from input. Decision-makers must always consider how to balance revenue with expenses in order to ensure sustainable operations. The primary sources of revenue for museums are ticket sales and revenues from licensed collections. Expanding revenue sources thus becomes an imperative for museum operation.

Proper development and utilization of museum collections can yield long-term marginal benefits. In economics, marginal benefit refers to the increase in revenue from selling one more unit of a good or service. Museum collections usually enjoy exclusivity, which ensures long-term market relevance of their “peripheral products.” It can be anticipated that the regular marketing strategy for cultural and creative products will be aimed at a steady and constant stream of sales, rather than pursuing the path of best-sellers. 

Survival is the precondition for development and it requires the consideration of economic cost. In the age of the digital economy, the mobile web has created opportunities for museums. The best way to seize these opportunities is to adopt a new vision for development. Museums will have a better chance to thrive if they are put to the test in the market and run in accordance with their unique laws of development.

Liu Hairuo is from the College of Economic and Business Administration at Heilongjiang University.