Project
MOSAICProject number : 45527
MOSAIC Consortium
Market Plan Summary
Issue : 1/0
WP 1200
Table of Contents
1. Executive Summary
2. Applied Methodology
3. Main Results
Definitions, Acronyms and Abbreviations
This section should provide the definitions of all terms, acronyms and abbreviations.
Acronyms and Abbreviations:
ABC Activity Based Costing
EEA: European Economic Area
EFTA: European Free Trade Association
IPR: Intellectual Property Right
NII: National Infrastructure Information
READI: Rights for Electronic Access and Delivery of Information
TRIPS : Trade-Related Aspects of Intellectual Property Rights
VLmp: Virtual Library museum page
WIPO: Intellectual Property Right
WTO : World Trade Association
The document target is to integrate the result of the project into an overall plan and demonstrate the commercial and financial viability (internal rate of return).
In the document is identified the impact of telecommunications costs (as well as other critical business factors such as property rights, regulatory issues, availability of basic networks or generic services) and it is described how the overall project is planned to be financed.
Using statistical inputs about cultural wealth fruition the business forecast is built. The main info source input is the experience of Partners involved in the Mosaic project.
The contents of the following chapters are:
Chapter 2 - Applied Methodology : a synthesis of main ideas used to produce the financial forecast
Chapter 3 - Main Results : to illustrate the summary data of the market and the MOSAIC financial plan
Chapter 4 - Recommendations and Guide-lines: it indicates the elements discovered during the trial phase useful to continue the project
A methodology is a technique to quantitatively measure the cost and performance of activities, resources and cost objects, including when appropriate, overhead.
Most current established accounting systems normally capture and distribute resource costs by one of the following methods:
Each of these methodologies has advantages and disadvantages which have met the past needs of the organization. Yet, every one of them fails to meet the full requirement for management information that occurs as the result of a redesign of the organization or any part of the organization.
For example: ABC is a more representative distribution of resource use since the cost allocations are based on the direct cost drivers inherent in each of the work activities that make up the organisational structure.
In our analysis a similar approach has been applied.
The decision-maker is always faced with difficult choices and multiple alternatives. Though decisions can be made with feelings and intuition, this is not the predominant situation. For this reason we have identified and quantified activity cost and performance data into a format which stratifies decision variables into a configuration of different CSC typologies which makes the decision clearer and easier to make.
To produce a consistent costs/revenues forecast an analysis of available data about Cultural Heritage fruition has been performed. The used data are from heterogeneous sources (see Market Plan WP1200, http://mosaic.infobyte.it/project/projects) and they allows to estimate some significative parameters (number of peoples that access in museum, percentage of services fruition …).
3. Main ResultsWhy MOSAIC
MOSAIC structure
Users
A |
B |
C |
D |
E |
|
openness and inter-operability of access systems
|
|||||
widest possible access, through data communication over switched telephony as well as over high-speed cable and fibre networks |
|||||
museums, galleries and libraries could charge modest fees for access and reproduction of information and images, but the possibility to offer free access from schools and universities |
|||||
proper protection of intellectual property rights and copyright, with operational mechanisms for controlling and charging for commercial re-use of material |
|||||
balanced between scientific and academic interest in museum/gallery collections or libraries and generic public interest. |
|||||
accesses information both from the museum and directly from home
|
|||||
create a trans-European network of "Cultural Wealth Information Providers" in order to sell high quality documents (high quality colour prints, 3D digital or solid models) |
|||||
obtain a geographical or historical path or map related to an author or movement
|
|||||
offer not only 2D low and high resolution images but also movie-maps, 3D models, VR experiences, digital animation and reconstruction (archaeology, not yet completed, totally or partially destroyed work of art) |
|||||
tutorial tours in digital museums
|
|||||
hyper-media navigation and surfing trough different kind of work of art and information (architecture, sculpture, paintings, frescos etc.) |
|||||
creation of 'virtual' exhibitions not related to the real one (collection of disseminated works of art, etc)
|
|
|
|
|
Users A |
Users B |
Users C |
Uses D |
Users E |
|
The market
Risks
Employment plan for CSC
Concrete Examples
The implementation of Mosaic foresees a set of services like:
The MOSAIC services are supplied by three types of CSC:
To have more details about each service refer to Architectural Document WP1700 http://mosaic.infobyte.it/project/project.html.
3.2 CSC Technological Configuration
The following table allows technological configuration for a CSC: for each service all the hardware/software components are listed. The first column individuate the component and the CSC to which belong (Excellence, Technological, Exhibition). For more detail Ref. Architectural Document WP 1700. http://mosaic.infobyte.it/project/project.html
Component |
Excellence CSC |
Technological CSC |
Exhibition CSC |
Network Infrastructure & Interoperability Gateway |
X |
X |
X |
Distributed Database, Metadatabase, Search Engine & Agent, Multilingual Interoperability |
X |
X |
X |
Cultural on-line browser |
X |
X |
X |
CSC Organisation, Publishing Team, Promotion & Advertising |
X |
X |
X |
Basic Services & Thematic Forum |
X |
X |
|
Archiving Tool |
X |
X |
X |
Application & Market Products |
X |
X |
X |
Virtual Exhibitor |
X |
X |
|
Authoring Tool |
X |
X |
X |
Training Room |
X |
X |
|
Video Conference |
X |
X |
|
Virtual Theatre |
X |
||
Multimedia Room |
X |
||
CyberCafé |
X |
||
Marketing Area |
X |
||
Playroom |
X |
The financial plan
CSC costs
Personnel Salaries |
|||||
Area and Professional skill |
|
1999 |
2000 |
2001 |
Notes |
Total Employees |
|
19 |
19 |
19 |
|
Total Salaries |
|
891800 |
891800 |
891800 |
|
All figures are in ECUs
Expences Table |
||||
|
|
|
|
|
Expences Items |
Cost |
1999 |
2000 |
2001 |
Infrastructures |
|
|
|
|
Distributed Database |
52500 |
52500 |
0 |
0 |
Basic Services & Thematic Forum |
61700 |
61700 |
0 |
0 |
Archiving Tool |
13600 |
0 |
13600 |
0 |
Application & Marketing Product |
46500 |
0 |
46500 |
0 |
Virtual Exhibitor |
13000 |
0 |
13000 |
0 |
Authoring Tool |
6500 |
0 |
6500 |
0 |
Training Room |
32700 |
32700 |
0 |
0 |
Video Conference renting |
21000 |
21000 |
0 |
0 |
Multimedia Room |
21600 |
21600 |
0 |
0 |
Playroom |
10600 |
0 |
10600 |
0 |
Virtual Theatre |
373167 |
0 |
373167 |
0 |
Workshops |
21600 |
0 |
21600 |
0 |
CyberCafé & Marketing Area |
21600 |
0 |
21600 |
0 |
Network Infrastructure |
31400 |
31400 |
0 |
0 |
Total Infrastructure Maintenance |
72747 |
22090 |
72747 |
72747 |
Total Infrastructure Costs |
800214 |
242990 |
579314 |
72747 |
|
|
|||
Upgrading H/W-S/W |
|
|||
HW/SW tools upgrading |
Type |
15000 |
10000 |
5000 |
|
|
|||
Fixed costs |
|
|||
CSC Rooms Renting |
Total |
50000 |
50000 |
50000 |
Communication |
Telephone |
3000 |
6000 |
10000 |
|
Internet |
10000 |
15000 |
20000 |
Utilities |
Electric Power |
8000 |
17000 |
26000 |
|
Air Conditioning |
5500 |
5500 |
5500 |
|
Cleaning |
27500 |
27500 |
27500 |
|
Security |
2600 |
2600 |
2600 |
|
Others |
5000 |
5000 |
5000 |
|
|
|
|
|
Annual Fixed cost |
|
111600 |
128600 |
146600 |
|
|
|||
Tax |
|
|||
Total Tax |
40 |
n.a |
n.a |
600267 |
|
|
|||
Personnel |
|
|||
Production |
|
390000 |
390000 |
390000 |
Marketing |
|
369200 |
369200 |
369200 |
Direction |
132600 |
132600 |
132600 |
|
Total Salaries |
|
891800 |
891800 |
891800 |
|
|
|
|
|
Personnel extra cost |
Extra |
89180 |
89180 |
89180 |
|
|
|
|
|
Annual Personnel Costs |
|
980980 |
980980 |
980980 |
|
|
|
|
|
Total Annual Costs |
|
1350570 |
1698894 |
1805593 |
n.a = not applicable - All figures are in ECUs
The main formulated hypothesis are the following:
As regards the derived products it is useful to underline the following:
Production costs of these objects must be put in relation to the probable revenue of the entire communication action.
If on one side the maximum involvement and communication can be obtained with the use of a strongly involving virtual reality, the profitable fall on a number of objects, to produce with greater simplicity and lesser technological impact, is obvious. Those participating in an experience of great fascination will tend to not only pay to view (tickets, groups, booking, as demonstrated by experience so far) but also take back with them something which may be a logical continuance such as a video, CD-ROM or simply a gadget (T-shirt, cap) with the logo of the experience.
On the other hand all those who will be attracted to Internet and to the presence of documents and objects of great cultural, technological or tourist interest will find on the server the reasons to continue their visit and even purchase objects (previously mentioned) or images concerning the archeological sites. This may bring revenue as demonstrated by the experience of large distribution and entertainment chains where a considerable part of the economic returns is thanks to the use of Internet even from a commercial point of view.
Furthermore the installation of necessary infrastructures to support the applications and the initiatives generates a permanent connection network of international interest which may be exploited even after also for different reasons compared to the initial ones. There would be the possibility of creating a flow of hotel information and booking, restaurant booking, organized tours, visits to archeological areas and natural parks. In synthesis the revenue figures are:
Revenues Table |
||||||||
|
||||||||
Estimated number of users/visitors for year = |
|
15000 |
|
30000 |
|
60000 |
||
|
|
|
|
|
|
|
|
|
|
Revenue Items |
Unitary Cost |
% Fruition |
Number Rentings/ Sales 1999 |
1999 Revenue |
% Fruition or Number Rentings/ Sales 2000 |
2000 Revenue |
% Fruition or Number Rentings/ Sales 2001 |
2001 Revenue |
|
Content Driven |
|
|
|
|
|
|
|
|
Multimedia CD-ROMs |
25 |
0 |
|
0 |
20 |
150000 |
35 |
525000 |
Electronic Documentation |
20 |
0 |
|
0 |
4 |
24000 |
8 |
96000 |
High quality electronic images |
20 |
0 |
|
0 |
30 |
180000 |
40 |
480000 |
Funny Electronic |
2 |
0 |
|
0 |
3 |
1800 |
5 |
6000 |
Markup on fees/Rights from other CSC |
10 |
0 |
|
0 |
0 |
0 |
0 |
0 |
Sales of souvenirs (gadgets, T-shirts, books, posters, photos & slides, video cartridges) |
5 |
0 |
|
0 |
20 |
30000 |
40 |
120000 |
Service Driven |
|
|
|
|
|
|
|
|
Training Courses |
1250 |
0 |
|
0 |
1 |
375000 |
1 |
750000 |
Video Conference renting |
500 |
|
0 |
0 |
5 |
2500 |
10 |
5000 |
Multimedia Room access |
2 |
0 |
|
0 |
3 |
1800 |
3 |
3600 |
Multimedia Room renting |
90 |
|
0 |
0 |
10 |
900 |
24 |
2160 |
Playroom |
0 |
|
0 |
|
|
0 |
2 |
0 |
Virtual Theatre access |
6 |
0 |
|
0 |
20 |
36000 |
80 |
288000 |
Virtual Theatre renting |
1500 |
|
0 |
0 |
4 |
6000 |
10 |
15000 |
Workshops |
20000 |
|
0 |
0 |
2 |
40000 |
2 |
40000 |
CyberCafé & Marketing Area |
2 |
0 |
|
0 |
25 |
15000 |
50 |
60000 |
CSC network services subscription |
50 |
0 |
|
0 |
15 |
225000 |
30 |
900000 |
Advertising on Events |
|
|
|
|
|
|
|
|
Sponsoring subscriptions |
1500 |
|
0 |
0 |
6 |
9000 |
10 |
15000 |
Advertising of the cultural events |
0 |
|
0 |
0 |
0 |
0 |
0 |
0 |
Advertising of the cultural institutions |
0 |
|
0 |
0 |
0 |
0 |
0 |
0 |
Tourist information |
50 |
|
0 |
0 |
5 |
250 |
10 |
500 |
Total Annual Revenues |
|
|
|
0 |
|
1097250 |
|
3306260 |
All the figures are in ECUs
In the next table the summary of financial projection and the break even point is presented.
|
Revenues/Expenses |
||||
|
|
1999 |
2000 |
2001 |
|
Total Annual Revenues |
|
0 |
1097250 |
3306260 |
|
Total Annual Costs |
|
1350570 |
1698894 |
1805593 |
|
Profit |
|
-1350570 |
-601644 |
1500667 |
|
|
|
|
|

The following table illustrates a breakdown of the revenue item referred to the project planning phases. Some items are linked to the country cultural organisation and can involve funding from sponsors. At this time we limit our analysis only on the basic and generic services that will be provided starting from the 2nd year.
|
CSC |
1st year (feasibility study) |
2nd year (trial and validation phase) |
3rd year – 5th year (deployment) |
|
Feasibility study cost |
1612 KECU |
0 |
|
|
EU funding |
844 |
||
|
Partner funding |
768 |
||
|
Sponsor funding |
0 |
||
|
Pilot network implementation cost |
4570 KECU |
||
|
EU funding |
2544 |
||
|
Partner funding |
2026 |
||
|
Sponsor funding |
0 |
||
|
Application deployment cost (10 CSC) |
26172 KECU |
||
|
EU funding |
0 |
||
|
Partner funding |
23555 KECU |
||
|
Sponsor funding |
2617 KECU |
||
|
Revenue |
33060 KECU |
||
|
Profit & Lost |
- 1612 KECU |
- 4570 KECU |
+ 6888 KECU |
The MOSAIC project forecast is based on 10 CSC that have to be established during the next year
Franch forecast example technological CSC:
see Annex 1 for detailed summary
UK forecast example Excellence CSC: (see Annex 2 for detailed summary)
|
KECU |
Forecast 1st Six Months |
Forecast Year 1 |
Forecast Year 2 |
Forecast Year 3 |
|
Revenue |
80 |
840 |
1.781 |
3.239 |
|
Gross Profit |
36 |
423 |
843 |
1.380 |
|
Net Profit Before Tax |
5 |
32 |
162 |
330 |
|
NPBT Percent |
6% |
4% |
9% |
10% |
|
Taxation Percentage |
31% |
31% |
31% |
31% |
|
Profit After Tax |
n/a |
24 |
112 |
227 |
|
Value at 20:1 |
n/a |
477 |
2.242 |
4.548 |
|
|
|
|
|

3.5 MOSAIC Legal Framework
A logic schema of the MOSAIC International Organisation is illustrated in the following figure:

3.5.1 Mosaic I. O. mission
Services which it is envisioned that MOSAIC I.O. will deliver to its CSC include:
This document identifies assumption fundamental to establishing the Mosaic I. O. and outlines a framework for within which the CSC will define a fully operational organization, that offers works for license and services to members.
A common understanding of the a shared benefits that derive from collaboration will govern Mosaic I. O. activities.
Schemes for calculating and collecting fees should be designed to control the level of overhead associated with income collection. An efficient and cost effective system is a goal.
Fixed service cost subscription that encourage use should be offered instead of pay-by-use options.
MOSAIC licenses will be priced based on the size of the Mosaic Catalogue and the number of users. The per student price will be low enough to encourage licensing and use.
MOSAIC benefits from having many members and a broadly representative Library. Museums should be encouraged to contribute to the MOSAIC Catalogue even if they use other avenues to distribute digital images and license use.
MOSAIC I. O. should make efforts from the outset to build partnerships with similar non-profit consortia of art
museums in other countries and to create reciprocity arrangements of benefit to all. Reciprocal agreements to administer rights should be sought.
A complete plan, based on sound market analysis and concrete corporate financing opportunities, will be developed by MOSAIC’s CSC. The following is a framework for this plan. It will need to be supported by detailed local market analysis and local user needs study.
MOSAIC Members will pay dues, not only to cover the Mosaic I. O. administrative costs of the organization but to ensure that participants recognize its value.
Time and travel to enable participation in working groups on topics such as Standards and Technologies, Products and Licensing, as well as the time devoted by members to serving on the board and in other governance roles should be recognized as member contributions to MOSAIC.
The budget for the year prior to the first year of operational services should support all staff required for the services and its marketing .
CSC should develop a budget that aims for self-sufficiency in a reasonable period.
CSC should seek financing from sources willing to provide no cost loans (including by assessing its members dues during the early years).
CSC should allocate income in a reasonable balance towards covering costs incurred in creating and distributing the MOSAIC Catalogue, and towards the provision of Services,
CSC will establish how MOSAIC will need to grow ad be structured in order to become self-supporting. CSC will have to consider such question as : Numbers of users, size of catalogue, ….
3.5.3 Mosaic International Organisation planConsidering the fact that so far perspectives and expectations have been created in a large number of potential partners, we believe that there is a need of predisposing to strengthen the consistency of the project in a better defined contractual framework (trial agreement phase).
The commercial diffused and distributed agreements are the basic element in the construction of the MOSAIC network as well as being the motor capable of stimulating and increasing the energies around the valorization of cultural heritage.
The main objectives are:
This direction cannot be omitted from structures capable of sustaining the initial payment of the system. In the second phase when the interchangeable mechanisms of information have been edited, the political system launched and the exercise tariffs have been indicated (rent, service cost, locations and fees, etc.) through a correct and concrete market plan, the system will be able to proceed on its own account. Taking into consideration the enormous contents of information, we believe that the volume of activities correlated with the cultural service centres cannot help but grow, consequently, feed itself new investments and new working opportunities.
The main step for the Mosaic International Organisation are summarised as follow:
join the Mosaic project as interest partner (Participation at the Project Mosaic (letter of agreement) – see http://mosaic.infobyte.it/partners/partners.html)
By the first semester of 1999 the structure will have to be set up at the main offices of the Banca di Roma in Brussels. All the CSCs will have to adhere with an association quota. Each CSC can designate a representative to participate in the organization's technical committee. The first task of the Organization will be to create the supervisory body: the technical scientific committee.
The committee will have to provide a plan of quality, configuration and service control.
3.6 The IPR ProblemUsing cultural materials in interactive multimedia requires acknowledgement or negotiation of new intellectual property rights. As cultural information has no geographical borders, legislation and agreements must be developed in an international context.
There are two reasons why it is important to be familiar with the basic principles of copyright law:
The works protected by Copyright are:
Source: Intellectual property law Primer for multimedia developers Copyright 1994 by J.Dianne Brinson and Mark F.Radcliffe (based on: Multimedia Law Handbook from Ladera Press)
Nowadays the different laws regarding the IPR problem, that are used in the different countries have to be considered as a barrier to the development of a multimedia market.
As everybody knows, the principal aim of a cultural institution is to disseminate the information they possess, in other words to let their collections physically and intellectually accessible to everybody.
On the other hand they must be very concerned that they should exercise a tough control over the dissemination and quality of this material and to maintain the aesthetic integrity of the original work of art they possess.
But which are the rights of the copyright owner?
The copyright owner has the right to maintain the integrity of the work of art and to protect it from piracy. He has to respect the following rights:
There is no registration system and no central clearinghouse for information of who owns or who can clear rights of a particular performance or work of art.
To what extent does a museum own the works it shows?
An institution has to consider the copyright and moral rights attached not only to the works held in the museum, but also to material of others that may be used in the collection management system .Generally speaking a copyright of a work of art belongs to the author or creator for all his/her life long and for a determined period of time to his/her heirs. The museums generally can control the physical access to the work of art but they usually don’t own the intellectual property right.
It may seemed as part of the museums task to preserve also the moral right of the works of art they have; they have to protect the integrity of the images and the identification of the author /artist .It would be useful for good working relationships for museum to take the initiative on the subject of rights agreements at the time of new acquisition, possibly by utilizing standards forms of rights agreement. This question becomes even more important when the museum wants to disseminate images via network for researches and common diffusion.
Multimedia and others applications of new media technology are not clearly covered in many traditional rights agreements.
Who are the copyright holders of the digital form?
Nowadays, institutions as museums and art galleries, artists, photographers and writers are to be considered as "subsidiary rights holders" of a new sort of products characterized by video, audio, software.
For more details on IPR specific aspect refer to Market Plan WP1200 ref. http://mosaic.infobyte.it/partners/partners.html
4. Recommendations and Guide-lines
4.1 Necessary conditions to continue
Technological CSC - all figures are in KF
|
Projet MOSAIC - M useum Over States And vIrtual Culture |
|
|
|
|
|
|
|
|
|
|||
|
Fondation Sophia-Antipolis - Institut ARENOTECH |
Données prévisionnelles |
|
|
|
|
|
|
|
||||
|
MOSAIC II |
|
|
|
MOSAIC III |
|
|
|
MOSAIC IV et V |
|||
|
COMPTE de RESULTAT (kf) |
T1 1999 |
T2 1999 |
T3 1999 |
T4 1999 |
Total 1999 |
T1 2000 |
T2 2000 |
T3 2000 |
T4 2000 |
Total 2000 |
2001 |
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Abonnés Grand Public |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
398 |
448 |
846 |
1.990 |
4.975 |
|
Abonnés Institutions/Entreprises |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
630 |
1.260 |
1.890 |
4.725 |
9.450 |
|
S/T Chiffre d'Affaires |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
1.028 |
1.708 |
2.736 |
6.715 |
14.425 |
|
Subventions EUROPE |
488 |
488 |
488 |
488 |
1.950 |
600 |
600 |
600 |
600 |
2.400 |
1.500 |
0 |
|
Subventions autres |
0 | |||||||||||