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Inside Borderless: The Digital Museum That Banked $100m During Its First Year

The Tokyo museum outperforms many leading tourist sites.

6 Minute Read

What you need to know: 

  • People are flocking to digital museums in Asia that are utilizing proprietary technology to develop viral experiences, driving $100m in their first year.
  • Traditional museums are heavily dependent on capital-intensive assets which are proprietary due to scarcity. Digital museums flip this model on its head by building technology that can be duplicated many times over, resulting in far more attractive margins.

How you can capitalize: 

  • Opportunists can partner with digital collaboratives to create new digital experiences. The beauty of technology-based experiences is in the scalability, so the end result could be a 100,000+ square-foot space like Borderless or a much smaller digital pop-up.
  • Others can get involved with the tech, by developing interactive and responsive artwork like teamLab has, and then selling or licensing the technology to other companies.
  • Leverage the concept of interactive digital experiences to build out entirely new concepts, ranging from interactive concerts to dynamic education tools.

* * *

Earlier this year, I had the pleasure of going to Tokyo with a group of friends. There was one thing everyone wanted to experience, and it wasn’t the robot cafe or conveyor belt sushi or shopping in Shinjuku. It was teamLab Borderless, an innovative digital art museum no more than a year old.

We managed to secure tickets on one of the few days it wasn’t sold out, and my experience was borderline magical. Whether it was the responsive tea room where flowers would grow from your tea bowl and shed their petals as you drank it, the coloring room where staff would scan your digital creation directly into the screen to swim with the other visitor-generated fish, or the room where 3-dimensional objects would be moved and mapped into the digital world overhead, the line between physical and digital was blurred in an incredible way.

The entire exhibit is built not just for sight, but also for interaction. (To get a glimpse of my experience, check out this Twitter thread.) The experience sparked a question for me: “Why is this the first time I’m experiencing something like this?”

Digital museums are not entirely new, but this model is. Most digital museums to date are not so distinct from traditional museums; most of the art is still physical, with digital technology augmenting the experience through sound, light, or video.

But what if the technology is the product? That’s what Teamlab, an interdisciplinary group of “ultratechnologists,” in partnership with Mori, have created.

Since they’ve launched, the interest in digital museums has spiked, with associated terms like “museum digital art tokyo” and “mori art museum” emerging from the unknown. If you look at the search data by country, you’ll find that while the concept is booming in Japan, it’s relatively unknown in the West, despite its huge potential.

Inside Borderless

Borderless’ technology of 520 computers and 470 projects is complex. The space is affixed with moving lights, sensors monitoring and engaging with human touch, and 3D-modeling computers. But outside of the technology, there are next to no physical assets required and the bare bones of the place are surprisingly simple: a 107,000 square-foot warehouse covered in black.

So although Mori is a real estate company and teamLab labels themselves as an art collective, in the case of Borderless and Planets, another one of teamLab’s immersive digital spaces, they are effectively technology companies.

The Borderless experience sports 5 exhibitions: Borderless World, the Athletics Forest, Future Park, Forest of Lamps, and the Teahouse. Despite its simple structure, it’s quickly become the most visited “single-artist” museum in the world, and is shaping up to be competition for all museums worldwide.

Since its launch in June of 2018, it has welcomed more than 2.3m visitors at Borderless and 1.25m at Planets. That’s more than the Van Gogh museum in the Netherlands (2.1m) — and over 50% of Borderless attendees come from outside of Japan.

Museum or New-Age Theme Park?

Tickets at Borderless cost 3200 yen for adults (~$30 USD), and 1000 ($9 USD) yen for children. With over 3.5m visitors, the sister investments have likely grossed Mori a cool $100m. It’s hard to think of many other ventures that yield $100m in revenue in their first year.

The popular exhibition has also won multiple awards, including the acclaimed TEA Thea award for Outstanding Achievement, with the commentary, “This exhibit is a great example of a well-balanced and structured, fully immersive experience, without complex instructions or recent technologies (no wearables, motion theaters, VR, AR, or 3D glasses).”

This award puts Borderless in the ranks of Disney Sea, a theme park in Tokyo which cost a whopping 335B yen (~$3.1B USD) to create and is currently the 4th most visited theme park in the world. But what’s perhaps most compelling is that Borderless likely generates profit margins similar to or exceeding those of theme parks, much better than traditional museums that struggle to post a profit.

Although it doesn’t break out Borderless in its financials, the parent company Mori reported a 25% operating profit, on par with theme park companies Cedar Parks and OLC Group (owning Tokyo Disney and Disney Sea), only without the monstrous overhead.

Even more remarkable: A 107,000 square-foot Borderless is a mere 2% of the physical land, compared to Tokyo Disney. On the other end of the spectrum, traditional museums, including Chicago’s Museum of Science and Industry and the Metropolitan Museum of Art, in New York, were in the red in 2018.

This dynamic isn’t entirely surprising, as the traditional museum industry is extremely capital intensive. Beyond the capital required to get started, they also experience significant non-operating expenses, including the purchasing of art and the depreciation of non-capitalized expenditures. Digital museums cut out most of the initial capital and the operating capital by keeping their real estate and physical assets lean. That makes them a much more profitable model.

Free Marketing for the Viral Museum

These museums have lent well to new-age marketing, owing a significant chunk of their publicity to social media and user-generated content (UGC). Digital experiences are perfect for social sharing, allowing Borderless to quickly become “Tokyo’s most Instagrammable spot”.

Take a step in front of Borderless’ Water Particles, a beautifully responsive waterfall that incorporates human interaction into its flow, and you better bet that shot is going up on the ‘gram. Peer into a glass casing of thousand-year-old pottery at the MET––not so much.

Borderless’ own Instagram even features a “guests” section, which highlights Kim K and Kanye, in addition to Swizz Beats and Nas filming part of “Echo” there. Let’s not forget about their 169k followers and 54.9k tags of #borderless on the platform. Talk about a viral venture.

Opportunities

Museum assets are often viewed as proprietary. There’s only one Mona Lisa and the Louvre has it. But this single-asset model is disrupted with digital museums.

With digital art, people are free to form their own unique experiences around the technology. The art is the medium, not the result. In fact, teamLab when referring to its Water Particles exhibit, mentions that, “previous visual states can never be replicated, and will never reoccur.” Just like other technology companies, the value can be scaled to a large degree at little additional cost, through the technology being “copy and pasted” around the world.

In fact, that’s exactly what teamLab is doing. Their work can be found in dozens of places, including Singapore’s Marina Bay Sands Mall and Changi Airport, San Francisco’s Asian Art Museum, and Melbourne’s National Gallery of Victoria. They also recently opened a Shanghai Borderless location. The concept broke attendance records at Tokyo’s National Museum of Emerging Science and Innovation, bringing in half a million visitors across five months.

The beauty of these digital exhibits is their flexibility. Don’t have a 100,000 square-foot warehouse? That’s fine. Do a digital museum pop-up. Want to change the exhibit next quarter? No need to buy millions of dollars in new artifacts. In fact, teamLab plans on changing their artworks to match seasons

More excitingly, the medium does not even need to be a warehouse. TeamLab explains how the technology can integrate into any physical medium, since it has no physical impact. Entire cities can become the next canvas for art, without manipulating the existing infrastructure. 

There’s opportunity for other companies to create new forms of digital art, but also to partner with technologists like teamLab, just as Mori did. TeamLab’s “Ever Blossoming Life — Gold,” for example, was purchased in 2018 for $225k. In fact, teamLab cities that over 125 pieces of their work have been sold to both private and public collections.

Even from a conceptual level, there is much to learn. Artwork and entertainment of the past, served people creations and these creations stimulated human emotion, but never actually integrated into the human experience. Creative expression was always in the form of some “static media”, but the evolution spearheaded by teamLab conjures up a new vision, explained eloquently as “ an interactive relationship between the viewers and the artwork”.  

Imagine, for example, a digital concert where the lights and even potentially the music are sourced and adjusted by the crowd, similar to the function behind the Infinite Crystal Universe, where people use their smartphones to control behaviour. On the other end of the spectrum, imagine new education platforms where learning is responsive. Children can learn to build cities in the third dimension and have their visions populate in digital form.

The phenomenon is a growing presence in Asia, but has received little exposure in the rest of the world. There’s evidence that the technology is universal, with DMM.com (teamLab’s partner on Planets) explaining, “I watched Western visitors at our exhibit two years ago. I carefully observed that, quite interestingly, everyone reacts to the work in a similar way, no matter if they are Asian or Western. We believe it is going to work all over the world.”

For more information, check out the Borderless website, or watch this video:





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[…] Digital Museums: On a visit to Japan this year, I was drawn to a new attraction at the top of everyone’s must-see […]