Project  MOSAIC

Project number : 45527

MOSAIC Consortium

Market Plan Summary

Issue : 1/0

WP 1200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

1. Executive Summary
2. Applied Methodology

3. Main Results

3.1 Mosaic services
3.2 CSC Technological Configuration
3.3 CSC Revenues
3.4 Projections
3.5 MOSAIC Legal Framework
3.5.1 Mosaic I. O. mission

3.5.2 Strategic Planning Framework

3.5.3 Mosaic International Organisation plan

3.6 The IPR Problem

4. Recommendations and Guide-lines
4.1 Necessary conditions to continue
4.2 Strategy
4.3 Prospectives
4.4 Conclusion:
5. Annex 1 – French Technological CSC
6. Annex 2 – UK Excellence CSC

7. Annex 3 – Market Plan Document

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

1. Executive Summary

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

2. Applied Methodology

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 Results

Why 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

  • Museums, Universities, Professors, Researchers, Students, Scholars
  • Art Restorators
  • Cultural Associations, Local Entities for the Protection of the Community, Linguistic Reasons, Thematic Museums
  • Photographers, Scenographers, Directors and/or TV Producers
  • Curators, Authors, Scenographers, etc
  • Manufacturing Companies, Advertising Agencies, Sponsors, Public Relations
  • Children of ages 3-5
  • Toddlers and Teenagers
  • Artists, Technicians, Advertisements
  • Sponsors
  • Image Agencies
  • Merchandise Producers
  • Art Brokers
  • Archive Managers (Libraries, Museums, Music-tech, Historical Register Office, State Archives)
  • Cultural Tourist
  • Disabled Cultural Tourists
  • Tourist Operators/Agencies
  • Interpol
  • Police Force
  •  

    The market

    Risks

    Employment plan for CSC

    Concrete Examples

    3.1 Mosaic services

    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

     

    3.3 CSC Revenues

    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

    3.4 Projections

    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:

    1. Technology information Services, including "best practice" guide-lines, "frequently asked questions", standards for data capture, advice on hardware and software application guide-lines, training and research and liaison with developing standards
    2. Data Enhancement Services, including data value standardization, the addition of unique identifiers and watermarking of images, subject indexing, metadata augmentation, thesaurus explosion of terms in controlled vocabularies, markup of text to SGML and mapping institutional data to export standards
    3. Catalogue Management Services, including creating and integrated, publicity accessible directory with many access points and different interfaces for different users which enables educators to identify works which they have licensed and may use through MOSAIC and allows the public to seek further rights including commercial use rights from the individual museum members
    4. Rights Management Services, including defining the minimum rights management data requirement, creating searchable rights metadata systems, negotiating rights with individual rights holder and their collectives, writing model licensing agreements, providing a forum for and developing terms of licenses for schools and schools district, museum education departments and public libraries and developing and disseminating end-user responsibility training materials
    5. Customers Services, including monitoring and analyzing uses and users, conducting focus groups to identify users needs and promoting innovative educational uses of museum digital content
    6. Collaborative Partnering, including with technology firms, funding sources, standards organisations, telecommunication providers and others
    3.5.2 Strategic Planning Framework

    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.

    1. Shared Assumptions
    2. 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.

    3. Operational Framework

    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.

    1. Estimating Costs to Members

      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.

    2. Estimating CSC Costs

    The budget for the year prior to the first year of operational services should support all staff required for the services and its marketing .

    Operations costs include :

    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 plan

    Considering 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 Problem

    Using 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

    4.2 Strategy

    4.3 Prospectives

    4.4 Conclusion:

    5. Annex 1 – French Technological CSC

    Technological CSC - all figures are in KF

    Projet MOSAIC - Museum 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