When Business Makes its way Into Public Cultural Institutions – Interview With Julie Molloy
The Artian is happy to host Christelle Roubaud as a guest interviewer on the topic of Business in Art. We want to thank both Christelle and Julie for an interesting interview!
While studying Art & Business in London last year, I attended a lecture by Julie Molloy, Managing Director of the National Gallery Company Ltd [the ‘Company’]. As she explained at the time, the Company is the commercial arm of the National Gallery [the ‘Gallery’], in the sense that its objective is to generate commercial income and donate its profits to the Gallery as a source of funding. This was set up in the 1980’s and was a far-reaching model at the time. Julie very nicely accepted to receive me and tell The Artian readers a bit more about a model that is even more relevant today under the threat of grant-in-aid cuts, but also about her experience of transitioning from working for a high-street retailer to the cultural industry, and her vision for the future of the art sector.
The Artian: Julie, thank you for accepting this interview for the Artian. Could you please start by telling us more about what your team does and what your relation with the Gallery is?
Julie Molloy: The National Gallery Company Ltd is a stand-alone limited company whose shareholders are the National Gallery Trust. Originally the Company was focused on publishing, but in the last fifteen years we have been able to extend the scope of the portfolio from venue hire right through to renting audio guides, catering (2 cafés and 1 award-winning restaurant) and retail (3 shops). Our focus is to provide the best experience to the Gallery visitors, as well as to generate profit to support its activities. Therefore, even though we have separate status, our relationship with the Gallery is a really strong one and we work in pursuit of their strategy.
The Company turned over £8.6m in 2014, and generated a profit of £2m which contributed to approximately 5.55% of the total annual expenditures of the Gallery. It is hard to make comparisons – for example, Tate and the Royal Academy have very different commercial models. . I would say that we are good value: small turnover, but good net profitability. And ultimately that’s our objective, controlling our costs and achieving a good margin.
TA: Do you think it has become essential for any public cultural institution to develop a sustainable commercial strategy?
JM: I personally believe very strongly in that. The acceleration towards improving commercially raised income has been recently driven by a fear of greater public funding cuts. But I think the more exciting challenge today is to develop a long-term strategy for the Gallery, its aspirations in terms of new exhibition spaces and capital development, and then set out fundraising and commercial objectives to support that. Therefore it stops being about how we just fill a funding gap and it’s more about how we can grow, without relying on the support of grant-in-aid so greatly in the future.
These organisations are all about public enjoyment and we should all be entrepreneurial enough to try and model a financial structure that is sustainable. Some organisations have done that very well already: the Royal Academy, for example, has no public funding. So we know that it’s possible, and with 6 million visitors a year we should be able to drive a robust business model!
TA: From your experience of moving from the corporate world to the cultural industry, what are the main advantages of working for a public cultural institution?
JM: One of the good things about working in the cultural industry, and at the Company in particular, is the passion people have. More and more you see people who are real specialists in their field making the step over to these organizations, and if they don’t cut it it’s not because they haven’t got the necessary skill set, it’s often because they don’t get under the skin of what makes this organization work. People who work here are absolutely motivated by what we deliver to the Gallery. It is not about building a successful business for ourselves, it is about generating money for a particular organisation and what it stands for.
What makes it also very interesting, from my perspective, is that it’s a really varied business, with around ten business strands: publishing, retail, catering, digital etc. Outside of the museums or heritage sector it is quite hard to find brands that operate across so many sorts of different business areas.
TA: Is there anything you are missing from working in business?
JM: Even if the Gallery is the fourth most visited museum in the world with 6.4 million people, the Company is a small enterprise. All the things you rely on being in a big structure become things that you have to put in for yourself, and a lot of people who come from large organisations find that a really difficult environment in which to operate.
Also, from an entrepreneurial perspective, the fact that it is such a programme-driven business can be very challenging. This year we will probably generate around £1.5m profit while last year we generated £2m, which is unlike any other business model because most people would expect continued growth. One year you might have a programme of significant scholarly exhibitions, but which may not attract hundreds of thousands of visitors, and the next year you might have really high footfall exhibitions like Rembrandt or Leonardo – and this makes it difficult to try to establish solid business growth. It is disconcerting but it is what you need to work with in the cultural sector. The key thing for the team here is to ensure that we can generate growth in other business areas so we are not overly dependent on exhibitions.
TA: You have been in the art sector for 20 years now, what is the most significant trend you have seen shaping the industry to what it is today?
JM: From a commercial point of view, one of the things that I have seen over the last few years is that the competition is stronger. When I first started at the Royal Academy and looked at the competition, it might be the V&A, the National Portrait Gallery or the Tate. Now when I look at the competitive marketplace, it’s effectively everything in London that is a visitor attraction, it doesn’t matter what sector you’re in. And the market has become global as well, 63% of our visitors are not UK residents, so we are also monitoring what might be going on in Europe, or even in the States – you can fly to New York for four days and relatively inexpensively!
TA: Where do you see it going?
JM: There is a physical limitation in terms of visitor capacity. At the Gallery we could attract up to seven million people in future years, but it could be quite an unpleasant experience, especially in the height of the summer period. So to extend our reach to the global audience we need to be thinking about developing a real digital experience. You can see that everyone has started to explore the same field, whether it’s the British Museum or Tate. It’s a way to attract the new generation as well. We are behind in terms of our web presence, but our social media following is really terrific for an organisation of this size, so we need to work from there and find ways to engage and inspire people from all over the world.
The other big long-term question for us is how to deepen the engagement with Old Master painting, in a world where younger segments are more interested in contemporary art and culture. This is a big challenge for us in the future.