When merchants enter the temple

Apr 19th 2001 | NEW YORK AND LONDON
From The Economist print edition

The Guggenheim is changing the rules about how to market a museum. Traditional museums in America and Europe don’t like the change, but many will have to go along with it if they want to thrive

MUSEUMS have never had it so good. New ones are being built all over the place, and existing ones are expanding; fund-raising campaigns have never been so successful, and visitor numbers have never been higher. Last year, for the first time ever, American museums attracted more than a billion visitors.

As they have become more marketable properties, some museums have begun to behave in more commercial ways. And to the consternation of many old-school curators, it is a business strategy that seems to be working. The Tate Modern in London and the Guggenheim Museum in New York, two of the most openly commercial big museums, are doing particularly well.

This has forced the directors of all museums into a bout of existential questioning. How far can the commercialisation of an art museum go? Which marketing techniques are permissible, and which are off limits? Will there in future be two kinds of museum: the temples of high culture devoted to scholarly pursuits, and the entertainment centres catering to more popular taste?

Although government subsidies to most of Europe’s museums are less generous than they once were, the museums remain public institutions largely financed by taxpayers. Most of them charge only a low entry fee, or none. The collections of art on display are considered to “belong” to each citizen. It still runs against France’s Napoleonic instincts to name a wing or a room after a generous donor. The British are less squeamish on that point: there is, for instance, a Sainsbury wing at the National Gallery and a Sackler wing at London’s Royal Academy of Arts—named, respectively, after a retailing and a pharmaceutical family. But a bigger difference appears on the other side of the Atlantic.

American art museums cannot rely on much direct financial help from government (although their donors enjoy tax relief). Even American museum directors of the old school are obliged to pay attention to the market, and to accommodate sponsors and donors. Just how accommodating they should be has been the subject of fierce debate in New York, a debate that threatens to spill over into Europe.

Guggenheim à gogo

The controversy is over the marketing methods of Thomas Krens, the head of the Guggenheim Museum. When the Guggenheim was founded in 1939, it was to be a museum of “non-objective painting” (museum jargon for abstract art). Figurative paintings were added in the subsequent decades as the museum became more “curatorially flexible”. Mr Krens has been testing flexibility to the limits. He is pioneering a trend towards marketing museums as places of entertainment rather than as depositories of crusty “accepted” works of art.

His methods are aggressive, even by New York standards. Three years ago, he put on an exhibition of motorcycles sponsored by BMW, a German car maker. But it was a retrospective exhibition last autumn of dresses by Giorgio Armani, an Italian fashion designer, that put Mr Krens well outside the bounds of what was generally considered acceptable. The exhibit was sponsored by In Style, a fashion magazine, but Mr Armani is said to have donated $15m to the museum—dubbed a “rental” fee by critics.

The Guggenheim is under particular pressure to become more commercial. Its endowment equals just about one year of its operating expenses—compared with almost 11 years at the Metropolitan Museum. Moreover, the museum needs more money because it is in the midst of an unprecedented expansion, for which Mr Krens tours the world tirelessly in search of donations. It is, in effect, being transformed into a global brand. In addition to the original museum on Fifth Avenue and the one in New York’s SoHo, there is a Guggenheim in Bilbao (designed, in famously avant garde architecture, by Frank Gehry), another in Berlin (a joint venture with Deutsche Bank), and yet another in Venice.

Mr Krens may be controversial, but he is pulling the crowds. The New York, Berlin, Bilbao and Venice Guggenheims together had almost 3m visitors last year. And once the Guggenheims-under-construction [in Venice and Las Vegas] are finished, their total visitor numbers could reach 6m, as much as the Louvre in Paris and more than the mighty Met.

Call this a museum?

Mr Krens’s peers in New York remain stubbornly unimpressed. [] Philippe de Montebello, the director of New York’s venerable Metropolitan Museum, is one of the leading advocates of the traditional way of running museums. “Our purpose is not to pull the crowds,” he says grandly. “Museums will lose,” he says. “They do not do Disney that well.” Mr de Montebello categorically denies being in the “entertainment” business. [] In his view, the job of curators is to explore and reinterpret the art collections that were the reason for the establishment of the museum in the first place.

The Metropolitan Museum is better placed to shun populism than many other museums. Quite apart from its generous endowment, about one-fifth of its yearly running costs are covered by the local government of New York. But the city’s other important art museums—the Whitney, the Museum of Modern Art and the Guggenheim—are more exposed to the harsh winds of the marketplace. They have to charge their visitors. The Whitney’s entry fee, for instance, is $10, more than a ticket to the cinema. Income from their endowments covers only a small percentage (20% or less) of their operating costs, and they receive hardly any funding from local or federal government. Other museums also need alternative sources of cash. According to the American Association of Museums, only about 60% of America’s 2,000-plus art museums have enough income from their endowment to cover their operating costs.

At the same time, museums are expanding. New York’s Museum of Modern Art (MOMA), like the Met, needs more space because much of its art is currently in storage and has hardly ever been exhibited. It cannot put certain favourites—like, say, Claude Monet’s waterlilies—into storage because so many visitors come specifically to see the hardy perennials. Meanwhile, true to its mission as a museum to promote modern art, it keeps adding works of contemporary artists to its existing collection. The MOMA has done well: Glenn Lowry, the director, is in the midst of an ambitious fund-raising campaign to finance an expansion that would double its gallery space. Needing a total of about $700m, he managed to raise $475m in just two years. But most museum directors feel, as does Mr Lowry, that their work is a constant tug-of-war between artistic mission and commercial consideration.

Over the past decade, corporate donations have started to dry up, and income from the museums’ own commercial activities has also stopped growing. According to the Alliance for the Arts, a not-for-profit organisation that gathers information about the arts in New York, revenue from gift-shop sales, space rentals and the like levelled off after 1992, while corporate funding declined by 30% between 1982 and 1998.

Despite their dependence on private donations, big museums still try to set limits to what they offer donors in exchange for cash. Mr Anderson, who chairs the group on museum ethics at the Association of Art Museum Directors, insists on the self-imposed rule among big museums in America that they will refuse any gifts or loans with strings attached. Collectors would often like to determine how their artworks are displayed, or demand a guarantee that “their” art will not be lent to other museums. Giving in to one of these special requests would, it is maintained, open a Pandora’s box of unacceptable demands.

However, what was off limits yesterday can become tomorrow’s norm. The Whitney has several sources of income: from its museum shops, for example, its travelling exhibitions, its membership programmes, its partnerships with corporations, and even the renting of its hallowed precincts for parties. Nowadays that is all conventional stuff, but in 1973 the Whitney was the first large American art museum to establish branches. “They called us McWhitney at the time,” says Mr Anderson. The danger is that the gap between museums and commercial galleries—or even exhibition halls—will shrink in the scramble to raise cash.

Britain in between

Museum directors in Britain are under far less commercial pressure than their colleagues in America. But although they ultimately rely on state coffers, their managers increasingly respond to the marketplace. Subsidies for museums have fallen in real terms: the government now provides 70% of the funding for the British Museum, down from 80% in 1993. The museum has to fill the gap with increased revenue from commercial activities, sponsorship and donations.

In practice, the British Museum has proved adept at the sponsorship game. The museum recently raised £100m ($144m) for the Great Court, a glass-covered courtyard designed by Sir Norman Foster that opened with great fanfare last December. This was the most successful fund-raising campaign for a museum in Britain to date. While lottery grants and a donation by the Weston family (owners of Associated British Foods) provided the bulk of the money, Walter Annenberg, a former American ambassador to Britain, was persuaded to sponsor the Annenberg Information Centre, an online museum, and Paul Hamlyn, a wealthy English publisher, paid for a new public library. The museum is now in a second round of fund-raising, and recently started to solicit sponsorship of the 3,312 glass panels in the Great Court via the Internet.

Such marketing methods are spreading. British museums are financed by a two-tier funding system, with the national government supporting 17 national galleries and museums, while local government takes care of the rest.

If they want to expand, art museums will have to persuade visitors to pay, or to pay more, perhaps for new services. And they will need ingenious new ways to attract benefactors. Inevitably, this will mean some concessions to commercialism. But, with good marketing, it should be possible to persuade more people to pay to visit exhibitions of Vermeer or Monet, or even to pop into smaller galleries. Exhibiting motorcycles is not the only way to attract a crowd—and scholarship and big audiences are not necessarily alternatives.
Copyight the economist 2002

shortened version of the following

http://www.georgetown.edu/faculty/irvinem/visualarts/museums/Economist-MuseumMarketing-Guggenheim-04-19-01.html