Insights from FT Strategies & Substrakt’s Roundtable
On 7 September, FT Strategies in partnership with Substrakt convened senior stakeholders from leading UK arts and culture organisations for a discussion around the most pressing topics in the industry today: business model sustainability and digital strategy. Below we have summarised why these topics are more important than ever as well as the key highlights that stood out to FT Strategies.
Changes in the environment such as the Arts Council England (ACE) funding, rising inflation, the cost of living crisis and Brexit are impacting traditional business models, creating a need to innovate beyond the strides the industry took during the pandemic. Many organisations are now grappling with how to re-think their business models to address the short-term impacts and ensure long-term financial sustainability. However, defining a route to action has proved challenging so far. Identifying the key opportunities and inviting a fresh perspective on the industry will help to continue the transformation needed to create a sustainable future.
1. Striving for Financial Sustainability
There was an overall optimism around achieving financial sustainability in the next three years and a heightened interest to diversify away from the dependency on funding in order to do so. The pandemic brought a willingness to trial new initiatives focused on diversifying revenue streams, which has enabled organisations to be more nimble than ever before. Nonetheless, challenges in monetising these initiatives limit their ability to have a lasting impact.
Organisations should focus on identifying creative partnerships and ancillary digital programming as they have the potential to introduce new revenue streams and reach new audiences. This was supported by a first-hand example from one of the roundtable participants collaborating with the gaming industry on multiple projects. Thus, instilling a culture of experimentation and collaboration can play a critical role in identifying new revenue streams and future-proofing business models.
2. Leveraging Audience Insights
Engagement emerged as a central theme during the discussion, recognised as the linchpin for fostering loyalty among cultural organisations’ audiences. Many shared their triumphs with membership propositions and loyalty schemes, highlighting their effectiveness. However, the challenges of demographic diversification were also acknowledged, in particular, catering to younger audiences with distinct behavioural tendencies, consumption habits and motivations.
Unlocking customer data was seen as pivotal in gaining a deeper understanding into audience needs and habits. Nevertheless, obstacles remained due to restricted visibility caused by third-party agreements and the limitations of existing ticket systems. Overcoming these hurdles was deemed essential for adapting and thriving in the digital age.
3. Navigating Digital Transformation
Digital can be approached from multiple angles when discussing it within the context of an organisation, whether it is internal capabilities or external programming, the key is to consider it as an enabler across the business. An interesting discussion arose around structural changes to organisations in order to best coordinate digital efforts and accelerate transformation. Historically digital was often considered one team, but participants noted that there is a shift occurring as teams experiment with different internal structures.
Generally speaking, the pandemic accelerated digital transformation and brought it to the forefront of many organisations’ strategies. However, the risk appetite has diminished as further investment is now required with limited insight on the returns. The biggest challenge for many organisations at the roundtable is that the transition to digital has not yet substantially translated to improved bottom-line results. By looking outward rather than inward, inspiration may be found from other industries that have prevailed when faced with similar circumstances.
Ultimately, the consensus was that change is needed and though this transition can be arduous, this sharing of ideas and experiences brought a sense of confidence that collectively these challenges will and can be overcome to ensure long-term success.
If you are interested in joining future events regarding the Arts and Culture industry, please contact us.
About the Author
Devon is a Senior Consultant at FT Strategies with over 6 years of experience in media. Previously with the FT in New York, Devon was the Head of Luxury Advertising for the arts, travel and spirits verticals. Focused on growing the FT’s presence in the US market, she drove revenue by introducing multi-faceted advertising programs. She holds an MBA from London Business School.
