By Bernard F. Reilly, Jr.

This article was published in Museum News, January/February 2001.

If there is to be a truly new museum for the 21st century, the Web is where it will be built. Unlike the old model, it will not be a single collecting institution, but a partnership of several cultural organizations with very different missions. This new model will boast the ability to reach a vastly expanded audience of visitors, students, teachers, and consumers from all parts of the globe, offering them an array of new or enhanced services and products. We may even be witnessing an evolutionary phase in the mission of the museum. If so, we will not have to wait long to see the results. The new model already exists.

As if signaled by the turn of the millennial clock, two major new e-business initiatives to be undertaken by U.S. and U.K. cultural institutions were announced last year. The most ambitious museum Web ventures to date, the two are Fathom Knowledge Network, Inc.—which partners several major American and British cultural organizations—and an as-yet unnamed organization jointly formed by New York’s Museum of Modern Art (MoMA) and London’s Tate galleries.

Fathom, reportedly an $80-million undertaking, is currently in the planning stages. The founding American partners, announced in the firm’s April 3, 2000, press release, are Columbia University, the New York Public Library, and the Smithsonian’s National Museum of Natural History, which, at this writing, was still evaluating the partnership and had not yet signed a contract. They are to join forces with British founding partners Cambridge University Press, the British Library, and the London School of Economics and Political Science. Fathom has announced plans to launch, sometime in 2001, “the premier site for knowledge and education on the Web . . . present[ing] the best public content and courses of universities, libraries, and museums on a wide variety of professional, cultural, and academic subjects.” Additional member institutions include Britain’s Natural History Museum, Victoria and Albert Museum, and Science Museum, as well as the University of Chicago, American Film Institute, research-and-development think tank RAND, Woods Hole Oceanographic Institution, and the University of Michigan. A preview site for Fathom is currently online at www.fathom.com.

Within days of Fathom’s announcement, MoMA and the Tate announced the formation of a partnership to create another online learning environment and product source for modern art and design. This will be, in the words of MoMA’s press release, “the premier destination on the Internet for individuals to access, understand, and purchase the best in modern art, design, and culture.”

Something new is emerging here. Though many of the operational details and “product lines” of these initiatives are still to be defined, it is already clear that Fathom and Tate-MoMA move far beyond the business models created by and for museums in the past, and even beyond those formed in the recent, early years of the Web’s existence. Both efforts will attempt to use the almost encyclopedic breadth of knowledge and intellectual capital that people associate with these prestigious partner institutions to create outlets for distance education, travel, cultural products, and other learning opportunities. Both enterprises represent more aggressive attempts by museums and libraries to convert into revenue streams not only the contents of their collections but their curatorial expertise as well. They also present, as recent events suggest, legal and other policy and operational challenges that might test museums’ commitments to their core missions.

Existing museum business models

Over the past two decades, as federal support for American museums has steadily waned, many institutions have become increasingly reliant on commercial revenue streams. The emergence of the World Wide Web has coincided with this trend, and many museums have embraced the Web as a powerful tool for direct marketing of their merchandise and collections to a global audience. Some museums have partnered with commercial, for-profit organizations to help them achieve this kind of outreach. By hosting e-commerce sites for museums that lack the means to create and maintain these sites themselves, commercial firms such as Yahoo, MuseumShop.com, and others have helped to provide their museum clients with an avenue to wider retail sales.

The World Wide Web also has become an important arena for collection licensing activities. Stock image houses, like Microsoft affiliate Corbis, Getty Images, and, on a lesser scale, Bridgeman Art Limited, function as cyber-age Bettmann Archives. These firms market the use of images of art and other cultural materials to editors, art directors, publishers of books and other media, and film producers, exploiting the demand for high-quality visual “content” generated by the Web and by the explosion in cable television and electronic publishing. These models, which emerged in the mid-1990s, were the first to recognize the potential for the Web’s global presentation and sale of products.

Nonprofit consortia also have been set up to exploit the market for high-quality images delivered in digital format, and to provide an outlet for museums that is more consistent with their educational and scholarly missions. AMICO (Art Museum Image Consortium) is a collective of museums established in 1997 by the Association of Art Museum Directors to bring the power and economies of collective marketing to bear on the licensing of museum materials for educational uses.

AMICO differs from its for-profit counterparts. It serves in effect as the agent for member museums, which pay an annual fee for membership and agree to contribute a certain number of images of works, with cataloguing data, from their collections each year. In return AMICO digitizes the images and mounts the materials on a site. Revenue comes from the sale of subscription access, usually to colleges, universities, museums, and research libraries. The site is an educational provider, and commercial licensing of individual museum works is handled by the owning institution. Revenues earned are used to cover expenses for maintaining and growing the system. According to Maxwell Anderson, one of the founders of AMICO and director of New York’s Whitney Museum of American Art, AMICO will run in the black for the first time in 2000 and will begin to return excess revenue to the participating museums.

The inordinately high cost of attracting new customers in the intensely competitive environment of the Web has led many e-commerce providers like Corbis and Getty to expand the range of products and services they offer. This represents an effort to retain and even cultivate broader and stronger relationships with museums and other existing customers. In 1999 Corbis began to offer online shopping for ancillary products, including framed reproductions of artwork, note cards, and other derivatives from the images they license. Similarly Getty Images acquired the online art mail-order house Art.com as an outlet for framed reproductions of images in its holdings and an online auction site to boot.

The new models

But Fathom and Tate-MoMA move beyond these earlier models. They are structured as online “destinations” or portals in which the virtual experience figures prominently among the services and products offered. These sites are envisioned as “online learning environments” that combine free content—digital collections, virtual exhibitions, lectures, recordings, and so forth—with content and products that are available for a price. The companies themselves are in effect “aggregators” that gather and assemble, from the various participating libraries, museums, archives, and other repositories, images, texts, recordings, and even performances, then re-purpose and re-package them for new audiences and uses.

As means of generating revenue, these sites will be to earlier models what amusement parks are to retail stores. They attract users and ultimately consumers not just with products but with a range of educational and intellectual experiences as well. Some of the items Fathom might offer include:

They also will deliver more interactive products and services: virtual tours and lectures, and even online synchronous and asynchronous interactions with curators and scientists. According to the April 3 press release, “Fathom users will have the opportunity to interact and collaborate with the leading experts in their field. Fathom’s unique architecture will provide a powerful ‘search and explore capability’ that will allow users to follow their interests, independently or with expert guidance, across the widest possible range of subjects.”

Tate-MoMA promises to offer “an accessible, personalized, visually striking environment.” Visitors to this environment will be able to enjoy virtual tours of collections and exhibitions, and Webcasts of lectures, symposia, concerts, and performances, as well as the opportunity to purchase design objects, furniture, books, and media.

The products and services will not be distinct, separate transactions, but rather a series of linked opportunities. Both organizations aim to create a synergy between the various levels and types of content, and between free and priced materials. According to John Ashworth, chairman of the British Library’s board of trustees, an online course might be taught by a member of the London School’s faculty and the course readings provided, for a fee, by the British Library’s Document Supply Center. Fathom, explains Robert Sullivan, associate director for public programs at the Smithsonian’s National Museum of Natural History, could offer consumers a range of “learning journeys linked thematically” that might, for instance, present for free an online version of the Smithsonian’s successful “Vikings” exhibition, linked to a 20-minute lecture by curator William Fitzhugh. Then, in a sidebar, the visitor might be tempted to purchase Fitzhugh’s book, or enroll in a related two-and-a-half hour “course-let” or video symposium.

These undertakings will draw heavily not just upon the collections of the partner institutions but on the resources, competencies, and creativity of the staffs as well. Fathom’s Ann Kirschner sees the partner institutions not as mere repositories but as “distributed networks of knowledge and entrepreneurship,” with technology offering the opportunity to “capture something of the daily life of the institutions . . . curators and librarians caught in the act of thinking.”

In its endeavor, Tate-MoMA will draw upon the “editorial and retail competencies” as well as the “intellectual resources” of both institutions. (With the recent opening of the Tate Modern, the Tate is now actually four museums—Tate Britain, Tate Modern, Tate Liverpool, and Tate St. Ives—and considers its Web presence its “fifth building.”) It will call upon outside scholars, critics, artists, filmmakers, photographers, and performers. But the Web effort could potentially involve a larger cast of players at the participating institutions than would traditional licensing activities.

Benefits for museums

Some of the potential benefits for museums are obvious. Retail sales of museum merchandise on these sites will generate income, possibly substantial, which will be shared with the partner institutions. Even if the revenue is modest, the museum will realize a larger share of the take than the 10 to 40 percent of licensing fees and royalties they have typically derived from their commercial partners.

More important, however, the new partnerships will enable museums to participate in the large and growing market for distance learning. Predictions that this will be a $6-billion industry in the United States by the end of 2002 have universities and colleges scrambling to stake their claims to this lucrative area of Web commerce. To thrive in this realm museums will have to master the complex and fluid new rules of marketing that e-commerce has engendered. Web marketing can entail a dizzying complexity of pricing structures and strategies for exploiting the easy versioning and personalization of products and the “micro-marketing” to smaller and smaller groups of profile-similar users whose preferences are constantly  tracked and targeted.

The speed at which business is done on the Web—and the rapidity at which global financial market forces in the post-GATT world can open new venues or close down old ones—requires many businesses to quickly shift strategies and resources to respond to new opportunities and new threats. Organizations that seek to operate in this mercurial environment require a programmatic agility that most museums lack. While the larger American museums like the Metropolitan Museum of Art, the Guggenheim, and the Art Institute of Chicago have substantial marketing resources, the pooled resources of models such as Fathom are of a scale closer to those wielded by their media competitors. Hence, in theory they could respond more quickly to market dynamics and commit major sums of money and resources to new courses of action without being bound by the nonprofit institution’s need to defer to the established mission or to such enfranchised parties as local communities and civic, state, or federal authorities. Again, Ann Kirschner: “We have to move at Internet speed, while the partners themselves can’t move rapidly, as wheels turn slowly in large cultural organizations.”

Indeed, individual museums have had to be creative about financing even their relatively modest digital endeavors. Museums are beginning to realize the enormous level of expense associated with ramping up information, service, and collection delivery on the Web. These costs do not subside after the initial investment, but live on in terms of periodic software and hardware upgrades, service contracts, and staffing costs. Stanley N. Katz of Princeton University’s Center for Arts and Cultural Policy Studies observes, “Nonprofit organizations have no access to the robust capital markets needed to finance digital endeavors on a large scale. Museums have learned lesson one: that to go digital requires more capital than any nonprofit has.” Fathom and Tate-MoMA expect to obtain these funds, either as venture capital or as publicly traded stock, from investors who would underwrite them in the hope of realizing even larger returns.

As important to museums as funding is the collective visibility on an increasingly crowded Web. Fathom and Tate-MoMA promise to deliver such visibility to their partner institutions. In the bricks-and-mortar world many cultural institutions are trying to compete with the entertainment and “infotainment” industries for the scarce leisure time of their audiences. This competition is even more intense in the digital world. The mantra of Internet gurus like Esther Dyson is that the scarcest commodity on the Web is consumer attention. Here some museums are operating in the same commercial space as large, heavily financed, and advantageously positioned media concerns such as Disney, Time-Warner, and others. Museum and university participants are betting that the visibility of collectives like Fathom and Tate-MoMA can add up to more than the sum of their individual parts.

Marketing considerations aside, the founders of Fathom and Tate-MoMA also aim to help the participating institutions achieve larger goals more closely related to their core missions. Says Kirschner: “Fathom embraces the principles upon which the great learning institutions of the world were founded—to create a community where ideas flourish, to stimulate intellectual curiosity, and to aid in professional development. Fathom will harness the power of the Internet to enhance the learning experience while upholding the highest professional and scholarly standards.” Some of Fathom’s participants also see exciting possibilities for higher education. Fathom technology will offer, they believe, an arena in which scholars, scientists, and curators can create together from the pooled collection, library, and media resources of the participating institutions.

Tate Director Nicholas Serota asserts that the Tate-MoMA partnership will lead to greater availability of modern art: “The 21st century is all about access. This new venture will promote deeper access to the best of visual culture around the world to the benefit of all those who are interested and engaged with art.” 

Despite early dreams of an information highway that would democratize knowledge and create a global learning community, the Web has not lived up to its educational potential. The disappointing performance of search engines as research tools, and the ubiquity of unsourced and unreliable information, have limited the Web’s value for primary and secondary, let alone higher, education. Fathom and Tate-MoMA promise to provide a commodity that is generally acknowledged to be scarce on the Web: “authenticated, high-quality content.” Fathom’s standards of academic and editorial integrity are to be monitored by the Fathom Academic Council, a panel of senior faculty and curators from participating institutions, which will be chaired by Columbia University Provost and Dean of Faculties Jonathan Cole. The Academic Council also is designed to afford the institutions more control of their product and better terms. Unlike Corbis and Getty Images, Fathom aims to put the museums in the driver’s seat. According to Columbia University Executive Vice Provost Michael M. Crow, the creation of Fathom was a way to ensure the quality of distance education material created under the university’s name. “This way we don’t have to negotiate with McDonald’s University,” he says. “It’s a way of maintaining control.”

Financial models and governance

The most novel aspect of Fathom and Tate-MoMA will be their status as for-profit corporations, legally and financially separate from the nonprofit partner institutions that are to provide much of the content. There are few precedents for these models in the museum world. Smithsonian Business Ventures (SBV) was established in 1999 to foster commercial initiatives that draw upon that large complex’s assets. SBV, however, is still under the auspices of the nonprofit and its net revenues are returned to the institution. Tate Gallery Publishing, on the other hand, is a for-profit corporation that operates the Tate’s retail, publishing, and collection licensing activities. After-tax profits made by Tate Publishing are donated to the museum. But it is wholly owned by the trustees of the Tate.

After initial investments by the founding partner institutions, Fathom and Tate-MoMA will both be funded by venture capital and/or a public stock offering. Fathom’s Kirschner was unwilling to disclose the amount of the corporation’s initial capitalization, although the April 5, 2000, issue of London’s The Independent reported that it was £50.6 million, or about $80 million. The initial capital must be substantial, however, as Kirschner reported in July 2000 that Fathom then had a staff of 45 employees. According to sources at Columbia, the university provided $20 million of the start-up capital. But it is uncertain how much was contributed by the other founding partners. “Suffice it to say,” states Kirschner, “that money is coming from some of the partners but we have to be flexible now because of the varying abilities and situations of the partners.”

Not all of the partners are investing directly. There are in fact two kinds of partners in Fathom: “equity partners,” which invest financially, and “content” partners, which do not contribute actual funds. Both equity and content partners, however, are asked to provide a liaison staff member and office space in their museums for the Fathom producers and researchers. The firm expects to raise sustaining funding from investors, with the initial public offering sometime in 2001.

Initially, prior to announcement of the endeavor, the six founding Fathom partners signed a general memorandum of understanding. It indicated their intent to create an educational portal that would offer a combination of free and fee-based content and be controlled by the partner institutions. This allowed the endeavor to be announced, with the details to be worked out later, a common practice with e-businesses. More precise, binding agreements are at various stages of development. (In November 2000, Karen Fitzgerald, spokesperson for SBV head Gary Beer, stated that the Smithsonian had not yet signed the agreement and that it was still “under consideration.”) But the agreements spelling out the terms of participation are expected to be completed prior to the IPO.

Fathom’s board of directors will consist of members of the international business community, including former Goldman Sachs chairman Stephen Friedman; National Basketball Association commissioner David Stern; chairman of Enterprise LSE (the London School of Economics’s commercial arm) and former director of Shell International Keith Mackrell; chairman of MBNA Corporation Alfred Lerner; and Columbia University executive vice provost Michael M. Crow. Also on the board is Kirschner, who went to Fathom from NFL Interactive.

Speaking in early July, Liz Addison, deputy director for marketing and communications at MoMA, said that the new Tate-MoMA organization had been incorporated but had not yet hired staff or appointed officers, although a CEO was expected to be appointed soon. Since April, MoMA and Tate have been working with Scient, a San Francisco-based e-business strategy firm to shape the new technological and corporate entity that will unite the two institutions.

An “internationally prominent” board of directors also is to be appointed with an undetermined number of seats reserved for representatives from MoMA and Tate. As with Fathom, representatives from the four Tate museums and MoMA will serve on an advisory board as well. This board, according to Anna Jobson, director of new business planning at the Tate, will “exert control over content, to ensure that the quality delivered by the company is equivalent in standard to that produced by the museums themselves.”

The funding for the organization thus far has come from several members of MoMA’s board of trustees, who donated the funds for the express purpose of forming the new corporation. (These contributions are purely philanthropic, and will not be viewed as investments, according to Addison.) Funds were provided by Tate Britain as well, but for most of the initial capitalization Tate-MoMA expects to draw upon additional venture capital funds and advertising revenues. Whether or not there will be an IPO has not been determined, Addison said in November. But launch of the Web site was expected in summer 2001. Like the Fathom partners, MoMA and the various Tate museums each will appoint staff members to serve as liaisons between the team of editors responsible for sourcing content and the institution’s curators.

Potential drawbacks and issues

Participation in the formation and operation of dotcoms entails a more decisive step into the commercial sector than most museums have taken thus far. Delivery of online distance education programming and alliances with for-profit organizations on this model will present nonprofits with thorny legal and policy issues. Museums will have to resolve these issues or risk damaging their privileged status in the community and their credibility as disinterested arbiters of cultural and historical worth. Museums might be guided by the experience of universities in this realm.

Intellectual property questions will loom large over these new ventures. During the 1990s, the licensing of museum collections content, particularly for the Web, has unearthed a myriad of intellectual property issues, which the museum community has begun to develop strategies to address. While traditional licensing activity is confined largely to museum rights and reproductions departments, the new models will permeate many areas of the institution. Curators, editors, designers, education specialists, and others will be enlisted to create products envisioned for the for-profit. And research materials, videos, and texts developed previously for exhibits and publications will be re-purposed for Web dissemination. While museums have come to think of their collections as intellectual “assets,” the possibilities of broadband Web delivery will encourage museums to commodify staff expertise and knowledge, as well as communication and even performance skills. 

This will require creation of a far more sophisticated policy framework for governing staff and internal resources than most museums have in place. Kirschner acknowledges that Fathom will “encourage the partners to better control their intellectual property assets and will serve as a catalyst for partner institutions to sort out the issues between the universities and faculties regarding compensation, copyright, the nature of their job.” The Smithsonian’s Robert Sullivan believes that the partnership with Fathom could create an opportunity to “gather together and more efficiently leverage the Smithsonian’s wealth of intellectual property.” Indeed the “intellectual capital” of the partner institutions is cited by spokespersons for both Fathom and Tate-MoMA as a principal asset that the partners bring to the new ventures.

Universities have been quicker than museums to embrace online learning and the other possibilities of new media. In the process, they have discovered that disputes over ownership of intellectual property come with the territory. In moving to secure their share of the fast-growing distance education market, many universities have suddenly found the intellectual property policies that govern the ownership of faculty products to be inadequate or obsolete. In the bricks-and-mortar world, for instance, lectures and writings can be exploited by faculty without interference from the university. Hence professors have not normally had to share book royalties and lecture fees with their universities. Motivated by the prospect of large tuition revenues to be had from delivering “courseware” and other products across the Web, some universities have revised their IP policies to allow them to capture some of this income, usually when the products involved are created using university facilities, labs, or student labor. This involves the university viewing scholarly research in some respects as work for hire, which in some instances has created friction between faculty and administration.

Trading on staff expertise will force those museums that have intellectual property policies to re-examine them. Those that don’t have them will have to write them. (The ownership of original writings and other works created on the job by MoMA curators and staff is specifically addressed in MoMA’s staff manual; the Smithsonian’s Office of the General Counsel has internal guidelines on copyright ownership on staff-produced works, but has not promulgated a formal policy at this time.) The exercise of committing these principles to writing might well prompt museums to a deeper consideration of the roles—and the independence—of museum curators and scholars.

An even greater challenge for a nonprofit engaging in for-profit work will be ensuring the proper use of its other resources. The nonprofit and for-profit sectors have long been separate domains in American society and are formally recognized as such by federal and state legal and tax codes. The defining characteristic of nonprofits is that they are non-governmental organizations that serve a public good, whose earnings, if any, do not accrue to the benefit of a controlling private interest. On this basis, they are given a privileged tax-exempt status by federal, state, and local governments. In this role, they also are eligible for funds from other nonprofits and from individual and corporate philanthropies, whose donors are in turn rewarded with tax benefits.

The formation of for-profit entities by certain nonprofits has caused some in the business sector to cry foul, noting that the exemption of nonprofits from federal and local taxation gives them an unfair financial advantage over for-profit competitors in the commercial arena. In an article titled “When Non-Profits Go After Profits” (Business Week, June 26, 2000), writer Diane Brady complained, “Forays into the private sector can distract a group from its core agenda, alienate donors, or propel it into areas where it has an unfair advantage over rivals. . . . Society forgives taxes from the country’s 1.1 million nonprofit organizations because their missions achieve some social good. Why should such groups be allowed to use a brand built with taxpayer dollars to enrich shareholders?”

Some museum officials worry about the perception that these for-profit involvements might raise. Recently, the Whitney’s Maxwell Anderson speculated about the potentially negative impact of this on future philanthropy: “At a time when we are seeing the intergenerational transfer of trillions of dollars, museums risk a great deal if they do comport themselves in a way that shows that they only value the bottom line.”

Museums, libraries, and universities have in fact drawn heavily from government and foundation funds to develop the expertise and create the content now to be re-purposed by the for-profits. Likewise, philanthropic funds have helped museums build the digital infrastructure needed to digitize and deliver collection and interpretive materials to the public over the Web. Care must be taken in these new partnerships then to ensure the balance of public good and private interest. Should these investments be exploited in ways that favor profits at the expense of public interest, then the intent of the tax exemption given to philanthropic investment will be undermined.

Certainly corporations are free to benefit from the resources that have been produced at public expense. Where conflict between public and private interests enters the picture is when the interests of a private concern are served at the expense of an institution’s public-service, mission-related work. This would be comparable to, for instance, cordoning off a section of Yellowstone for the exclusive use of a private corporation.

Tate-MoMA and Fathom, as described, will inevitably have special access to the “assets” of the partner institutions’ collections, research products, and expertise of faculty and curatorial staff. But this would be compensated. Robert Sullivan says that the Smithsonian is sensitive to the dangers and has come to grips with them. “I see no conflict with publicly produced materials being used by Fathom,” he says. “Initially, most of what would be contributed by the Smithsonian is pre-existing material: articles for the [Smithsonian] magazine, books, video interviews made for exhibitions, and so forth.” These materials would be available on the free side of the Fathom site, says Sullivan, and also would be available gratis on the Smithsonian Web site. Hence the public would benefit from the investment made by Fathom to re-purpose this material for the Web.

In creating new content, some of which will be on the side of the Fathom site restricted to paying visitors, Smithsonian scientists would be involved only on a voluntary basis. According to Sullivan, scientists who choose to participate would use a portion of the time that each Smithsonian scientist allocates each year to “public service” to work with Fathom to create online lectures, interviews, exhibitions, and other products. This is similar to arrangements at universities that provide a reduced course load to professors who work for for-profit, online, distance-learning companies like Michael Milken’s UNext.com. At the Smithsonian, this staff time would be carefully tracked, says Sullivan, and compensated, as it is now for internal Smithsonian endeavors, with funds that provide support staff, equipment, and other resources that facilitate the scientist’s research work.

Clearly an effort has been made by Fathom and Tate-MoMA to craft their business plans to insulate the nonprofits from the risk of compromising their independent status and public accountability. Fathom partners can withdraw from the venture quickly and without penalty should products fall short of their standards or should their reputations otherwise be jeopardized. And in both cases the right to use works created by the partners will be licensed only temporarily and will not be permanently turned over or assigned to the commercial partner.

The Smithsonian, Columbia, Tate, and MoMA maintain that their relationship with the commercial corporation is not an exclusive one. But there may be pressures to make it so. The corporation’s need to protect the brand and to trade on the alliance with the museum and university partners means that this affiliation cannot be merely informal. Investors will want more surety. Indeed, if such alliances are seen as too weak, or if the same museum intellectual resources are made freely available to other commercial partners, the very brand equity upon which Fathom and Tate-MoMA rely upon could be diluted.

These affiliations also will involve the direct and ongoing engagement of officers and staff of the nonprofit organizations in the operations of the for-profits. Certainly museum trustees and other officers and staff have served on the boards and councils of corporations and other private, for-profit concerns, but this is normally not an ex-officio duty. Conversely, it is in the best interest of the nonprofit partners to maintain control of product quality and content decisions made by the for-profit corporation. And this may be difficult to do while keeping the corporation at sufficient arm’s length. Fathom’s Academic Council is, according to CEO Kirschner, an advisory body. The company is run, and presumably its business decisions will be made, by the board of directors. Once the company goes public, as it intends to do in 2001, the board and the CEO will be answerable ultimately to the stockholders.

The dominance of mission

Only time will tell whether these new endeavors enable museums to better fulfill or distract them from their core missions. This is a reprise of the perennial conflict in museum operations: to be driven by mission or by financial opportunity. The Metropolitan Museum of Art’s Vice President for Communications Harold Holzer says, “[Our] Web site is about the Met instead of the Met being about the Web site, which seems to be the case in a lot of museums these days. At the Met the marketing side always contributes to [advance] the mission of the museum. Every management decision is driven by curatorial imperatives.” In addition, says Holzer, “These for-profit efforts are occurring in an atmosphere in which all partnerships are being scrutinized much more carefully than before, in the wake of the Brooklyn Museum of Art and the Saatchi Collection controversy, and with good reason. This grows out of the whole tendency of some museums to fund what the funders want rather than to be driven by their mission.”

There is strong evidence to suggest that market-driven technology-transfer activity has had a pronounced effect on university core missions. In “The Kept University,” an article in the March 2000 issue of Atlantic Monthly, Eyal Press and Jennifer Washburn argue that the enormous commercial rewards for biotechnology research, and the alliances that universities have forged with private corporations to reap those rewards, have over the past 30 years drastically reduced the prominence of the humanities in the curriculum and decreased their share of university resources. The cumulative effect of this, many students and faculty argue, is the erosion of the quality of on-campus education. Emerging business models like Fathom and Tate-MoMA could have a similar transformative effect on museums, for better or worse.

These are weighty issues. The Smithsonian’s eight-month review of the contract with Fathom suggests that reservations remain. In the end, for any museum, the devil or the divine will be in the details or the terms of the contract with its for-profit cousin. Those terms,  i.e., the basis for compensation of the former by the latter, the obligations of the museum to the corporation, and the ownership of the resources created for these joint endeavors, will define the new dynamic. Will “family loyalties” cause the dotcoms to respect, if not serve, the interests—all the interests—of the museum and its community? Or will the physics of the global marketplace be allowed to govern these efforts and exert a gravitational force that pulls the museum from the orbit of public interest?

The constituencies of the Smithsonian Institution, the Tate, and the Museum of Modern Art, indeed members of the museum community in general, have a vested interest in the terms of these new relationships. 

As for the universities and the museums themselves, it would be ironic indeed if these institutions compromised their positions as disinterested arbiters of quality, authenticity, and even truth in these for-profit ventures. That would undercut the very credibility on which their “brand equity,” and hence their value to the commercial marketplace, ultimately rests.

The author would like to thank Stanley N. Katz, director of Princeton University’s Center for Arts and Cultural Policy Studies, and Raymond P. Kolak, Esq., of Eckhart, McSwain, Silliman & Sears, both of whom read and commented on this article in its draft stage. The author also is indebted to Melissa Smith Levine, legal advisor at the Library of Congress, for her advice and guidance on some of the legal issues discussed here.

Bernard F. Reilly, Jr. is director of research and access at the Chicago Historical Society.