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All Articles Summary
Cultural Industries (Universiteit van Amsterdam)
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Contents
Analysing Cultural Industries: Past vs. Present
3
Article 1: Throsby, D. (2008) - Modelling the cultural industries................................................................................3
Article 2: De Marchi, N. and Van Miegroet, H. J. (1994) - Art, Value, and Market Practices in the
Netherlands in the Seventeenth Century................................................................................................................................ 5
Article 3: Baumol, W. J. and Baumol, H. (1994) - On the Economics of Musical Composition in Mozart’s
Vienna................................................................................................................................................................................................... 7
Article 4: Peterson, R. A. and Anand N. (2004) - The Production of Culture Perspective..................................9
Cultural Industries & Organizational Design
14
Article 1: Starkey, K., Barnatt, C. and Tempest, S. (2000) - Beyond Networks and Hierarchies: Latent
Organizations in the U.K. Television Industry................................................................................................................... 14
Article 2: Leblebici, H., Salancik, G. R., Copay, A. , King, T. (1991) - Institutional Change and the
Transformation of Interorganizational Fields: An Organizational History of the U.S. Radio
Broadcasting Industry................................................................................................................................................................. 16
Article 3: Djelic, M.L. & Ainamo, A. (1999) - The Coevolution of New Organizational Forms in the
Fashion Industry: A Historical and Comparative Study of France, Italy, and the United States.................26
Article 4: Lampel, J., Lant, T., & Shamsie, J. (2000) - Balancing act: Learning from organizing practices
in cultural industries.................................................................................................................................................................... 32
Cultural Industries & Marketing
37
Article 1: Voss, Glenn B. and Voss, Zannie Giraud (2000) - Strategic Orientation and Firm Performance
in an Artistic Environment........................................................................................................................................................ 37
Article 2: Bhattacharya, C. B., Rao, H. and Glynn, M.A. (1995) - Understanding the Bond of
Identification: An Investigation of Its Correlates among Art Museum Members..............................................41
Article 3: Berger, J., Sorensen, A. T., and Rasmussen, S. J. (2010) - Positive Effects of Negative Publicity:
When negative reviews increase sales.................................................................................................................................. 46
Article 4: Ezra W. Zuckerman, Tai-Toung Kim, Kalinda Ukanwa, and James von Rittmann (2003) Robust identities or nonentities? Typecasting in the feature film labour market.............................................48
Cultural Industries and Technological Change
49
Article 1: Papies, D. & van Heerde, H. J. - The Dynamic Interplay between Recorded Music and Live
Concerts: The Role of Piracy, Unbundling and Artist Characteristic.......................................................................49
Article 2: Elberse, A. - Should You Invest in Long Tail?................................................................................................. 52
Article 3: Salganik, M. J. and Watts, D. J. (2009) - Web-based Experiments for the Study of Collective
Social Dynamics in Cultural Markets.................................................................................................................................... 55
Article 4: Jenner, M (2017) - Binge-watching: Video-on-demand, quality TV and mainstreaming
fandom............................................................................................................................................................................................... 58
Cultural Industries & Competitive Processes
63
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Article 1: Crane, D. (1997) - Globalization, Organization Size, and Innovation in the French Luxury
Fashion Industry: Production of Culture Theory Revisited.........................................................................................63
Article 2: Franssen, T. and Kuipers, G. (2013) - Coping with uncertainty, abundance and strife: Decision
– making processes of Dutch acquisition editors in the global market for translations................................66
Article 3: Gemser, G., Leenders, M.A.A.M and Wijnberg, N.M. (2008) - Why some Awards are more
Effective Signals of Quality than Others: A Study of Movie Awards.........................................................................71
Article 4: Franck, E. & Nuesch, S. (2007) - Avoiding “Star Wars” – Celebrity Creation as Media Strategy
............................................................................................................................................................................................................... 74
Cultural Industries & International Business
77
Article 1: Footer, M. & Graber, C.B. (2000) - Trade Liberalization and Cultural Policy..................................77
Article 2: Pathania-Jain, G. (2001) - Global parents, local partners: A value-chain analysis of
collaborative strategies of media firms in India.............................................................................................................. 82
Article 3: Jin, Dal Yong (2007) - Reinterpretation of Cultural Imperialism: Emerging Domestic Market
vs Continuing US Dominance.................................................................................................................................................... 86
Article 4: Burri, M. (2012) - Cultural protectionism 2.0: Updating Cultural Policy Tools for the Digital
Age....................................................................................................................................................................................................... 90
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Analysing Cultural Industries: Past vs. Present
Article 1: Throsby, D. (2008) - Modelling the cultural industries
Discusses the definition of cultural industries, the boundaries of cultural industries, and examines six
tools for economic analysis that can be applied to cultural industries.
Definition:
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UNESCO  cultural industries: Industries that combine the creation, production and
commercialization of contents which are intangible and cultural in nature. They are central in
promoting and maintaining cultural diversity and in ensuring democratic access to the future.
Creativity: In the field of psychology no agreement whether it is an attribute of people or a
process by which original ideas are generated. Also, there can be different kinds of forms of
creativity: artistic creativity and scientific for instance.
Culture:
 Anthropological sense: shared values, customs, ways of life etc…
 Functional sense: things such as the practice of arts
Cultural goods and services characteristics:
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Input of human creativity  Original idea of interpreting the world.
Symbolic messages  More than simply utilitarian: serve larger purpose.
Intellectual property  Attribute to the whole group.
 Cultural goods and services can be seen as a subset under creative goods and services. Creative goods
and services can be seen as products that require some reasonably significant level of creativity in their
manufacture, without necessarily satisfying other criteria that would enable them to be labelled
“cultural”  extends beyond cultural goods and defined above to include products such as advertising
and software.
Models of the cultural industries:
Name
UK – DCMS Model
Definition
Industries requiring creativity, skill and talent, with potential for wealth and
job creation through exploitation of their intellectual property.
Symbolic Texts Model
This approach differentiates between high and popular culture on the
grounds of their different power dynamics in regard to social class, gender,
and race/ethnicity. The processes by which a society’s culture is formed and
transmitted are portrayed in this model via the industrial production,
dissemination and consumption of symbolic texts or messages, which are
conveyed by means of various media such as film, broadcasting and the press.
Concentric
Circles  Based on the proposition that it is the cultural value of cultural goods
Model
that gives these industries their most distinguishing characteristic.
 Creative ideas originate in the core creative arts in the form of sound,
text and image, and that these ideas and influences diffuse outwards
through a series of layers of “concentric circles”, with the proportion of
cultural to commercial content declining as one moves further outwards
from the centre.
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WIPO Copyright Model
This model is based on industries involved directly or indirectly in the
creation, manufacture, production, broadcast and distribution of copyrighted
works
UNESCO Institute for Identifies five “core cultural domains”: cultural and natural heritage;
Statistics (UIS) Model
performance and celebration; visual arts, crafts and design; books and press;
and audio-visual and digital media. It also extends to the “related domains”
of tourism, sport and leisure.
Americans for the Arts Based on identifying businesses involved in the production and distribution of
Model
the arts, labelled as “arts-centric businesses”
The industries included in the broad classification of these models, indicating a reasonable degree of
commonality in their coverage. However, when it comes to defining the core cultural industries, the
models differ widely. Only film, video and music appear in the core of all three models.
6 economic approaches:
Name
1. Industrial organization theory
 Market concentration
 Barrier to entry and exit
 Degree of competition
2. Value chain analysis
Production chain with value adding stages from initial idea,
the production of goods or services, their marketing and
distribution, until consumption
3. Inter-industry analysis
 Input-output analysis: Output from one industrial sector as
input to another sector
 Social accounting matrices: Similar tool requiring less data
for analyzing the impact of industries
4. Locational analysis
Network and agglomeration externalities in cultural production
lead to clustering of firms that benefit from being located close to
other firms in the same (or similar) industries (e.g.: Hollywood)
5. Contract theory and property rights
Identifying property rights as a basis for contractual
arrangements that can be explained by the uniqueness of cultural
industries:
 Nobody knows  uncertainty of demand
 Art for art’s sake  irrational labor market
 Infinite variety  all products are – more or less –
differentiated
 Durability  ability to yield rents over a long period
6. Trade and development
Theory of comparative advantage
Used by
Used
by
governments
for
developing industrial policy and
by firms to analyse the
attractiveness of the industry
Used by firms to analyse which
stages in the value chain are
powerful or lucrative
Used to evaluate the economic
impact of cultural policy
Used by governments to attract
firms and develop (cultural)
industries clusters
These peculiarities of the industry
are used by firms to develop
“optimal” contracts with (value
chain) partners
Used to explain specialization of
countries and to eliminate trade
barriers
Article 2: De Marchi, N. and Van Miegroet, H. J. (1994) - Art, Value, and Market Practices in the
Netherlands in the Seventeenth Century
What did the market for paintings look like during the Dutch “Golden age” in the 17 th century?
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What is a market?
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Perpetual innovative whirl (Schumpeter, 1934)
Platforms for exchange
Interactions among individuals/groups
Differentiated products
Dynamic
Dutch art market: Creative differentiation
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New oil painting techniques
Phantasmagorical depictions
Rubens employed Jordaens to reproduce small sketches in large formats
“Along with his skills as a painter, Rembrandt was also known for being a very cunning and
calculating businessman. And it wasn’t uncommon to see him at art auction bidding on his own
paintings just to drive up the price.”
Selling copies of paintings is just another line of business: “If it proves impossible to turn a profit on
paintings, we will simply put the money into another line of business”.
Competition in painting:
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Market regulation in Amsterdam
 Amsterdam forbids public sales (auctions) by foreigners of paintings not produced by
Amsterdam artists (1608)
 Prohibition of foreigners importing and publicly selling paintings via the intermediation of
Amsterdam citizens (1613)
 Public sales restricted to paintings belonging to deceased individuals, retired painters and art
dealers that have gone out of business (1644)
Incumbents vs. New entrants
 Old masters and the guilds:
o Membership through apprenticeship
o Exclusive commercial rights to sell (monopoly)
o Argument for market protection: Entry barriers protect prices and quality of the artistic
works
 Non-guild members (some guild members) & art dealers:
o Wanted free public sales
o Wanted to organize auctions
o Argument against market protection: Entry barriers are a halt to innovation and market
development
Organizational design
 Rubens’ (1577-1640) studio
 Level of organization:
o Apprentices
o Assistants
o Subcontractors
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 Levels of authenticity:
o Full Rubens: Painted by Rubens
o Part Rubens: Painted by both Rubens and others
o Brand Rubens: Painted by his others and signed by Rubens
Copying as a marketing tool
 Painters did quite a lot of marketing:
o Circulated prints of new and popular paintings
o Hired engravers to make prints of original paintings
 While doing so painters had to balance:
o Benefit of promotion
o Oversupply of copies
 Could affect the market value of original paintings
 Could damage the reputation of the painter
Name
Examples
Pieter Brueghel  Son of Master painter Pieter Brueghel the Elder
II the Younger  Made 60+ copies of “Winter Landscape with Skaters and a Bird Trap”
(1564-1637)
Rubens (1577-  Retouched, signed and made (painted and printed) copies of original work
1640)
 Hired engraver Lucas Vorsterman to make copies of his popular paintings
Rembrandt
 Reworked etchings and created demand for “work in progress”
(1606-1669)
 Pricing
 What determines the price (Mandeville? 1670-1733)
o Name of the master
o Stage of artist’s career (and fashion)
o Scarcity of artist’s work
o Status of owners and being part of great collections (=provenance)
 Relevant until today: Auction house
Contracts in the current age: contemporary visual art
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Split in the value chain:
 Artist: R&D (or creation) and production
 Art dealer: marketing, distribution and sales
R&D: Artist
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Production: Artist
Marketing: Art
dealer
Distribution: Art
dealer
Sales: Art dealer
Artist (50% of gross revenues): Produces work
Art dealer (50% of gross revenues): Displays and promotes work among collectors, critics &
museum curators)
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Article 3: Baumol, W. J. and Baumol, H. (1994) - On the Economics of Musical Composition in
Mozart’s Vienna
Explains why 18th century Vienna became an important centre for music composers and described the
transition in the economics of music (in particular of composition) from a system of private patronage
to the beginnings of a market mechanism
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The reason why there were an increase in talented composers in the 18th century Habsburg
empire was because of the fragmentation of the state into many near-independent states. Each of
these states seek entertainment and prestige through new musical offerings.
Increase in demand for new music also attracts people into the profession.
Study on Mozart’s finance: expenditure vs. income
→ Paper answers why there was an increase in talented composers and how well Mozart did financially.
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An increase in wealth leads to an increase in demand that underlay a free market in musical
composition (p.2)
Demand came from two sources:
 Continued patronage of royalty and nobility
 Emerging free market
Historical context: An expansion of royalty but it was challenged by the French Revolution.
The Habsburg owned a lot of wealthy states and they ran court liberally → affect composers and
performers BUT real wage is low, so a real expenditure can purchase much more than today.
Joseph II - A great emperor of Austria at that point but proven to also made many mistakes. He
tried to keep Mozart in court, Vienna but do so by giving not-so-generous commission.
Some profound changes helped to make musical entrepreneurship feasible:
 Gradual replacement of the old Kapelle: old = The Kapellmeister made, performed everything
with music. All of his work belongs to the master. Cannot make commissions. New = artists
sell their own work, give lessons, make commissions, part-time job
 New style of music: “galant” style instead of contrapuntal → make it easier for amateur
musical artists to enter. Economic consequences:
o Increased the popularity of attending concerts
o Made prestigious amateur music performance at home more feasible
o Enlarged the sheet music publishing market
 New technology: New, better musical instruments were introduced, and it increased demand
for new music.
o Possible to perform to a larger audience
o More piano in private home, more demand for new music.
Composers new business model:
 Part time employment (at aristocratic households)
 Public concerts and charging admissions
 Private concerts
 Teaching music
 Commissions for compositions
 Publication of sheet music
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o Fixed payment (no royalties) by the publisher
o Sheet music copies as a tool to advertise composer’s work
Vienna, seat of the Holy Roman Empire → a lot of great composers make their way to the city.
German states became dismembered → Each state is their own court → Masters are bored →
Focus on entertainment and music → Open for employment: Old music was never played. Focus
mainly on new music → A way to compete and seek prestigiousness.
Many entered the labour market turn to the careers for which they thought themselves suitable
and there existed opportunities
A change in economics and social order → open for people with talent to enter a new field instead
of following the career of their forefathers
Mozart as an entrepreneur:
Mozart is very well off. His income comes from different sources including concerts, teaching etc… But he
also spent a lot (liberally) → However when he died, he left with very little debt
Career:
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Patronage stipend granted by the Emperor
Composition fees
Pianist
 Private salons
 Subscription series of 3+ concerts
 Up to 176 subscribers per series
 Sometimes aided by private impresarios
 Private music lessons
 Publication of sheet music
Income
Patronage stipend: 800 florins = $105.000 (2012)
Composition fee: 425 florins = $56.000 (2012)
 Concert performance:
1250 florins = $165.000 (2012)
Series of 6 concerts ticket = 3 ducats = $1700 (2012)
 Music teaching of 12 lessons: 6 ducats = $3400 (2012)
 Publication of sheet music: Small and insignificant amount
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Article 4: Peterson, R. A. and Anand N. (2004) - The Production of Culture Perspective
Success in cultural industries is not merely due to the genius of the individual artist. Products in the
cultural industries shaped by the systems within which they are created, distributed, evaluated, taught
and preserved.
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The production of culture perspective focuses on how the symbolic elements of culture are shaped
by the systems within which they are created, distributed, evaluated, taught and preserved.
Six facets of production: Technology, law, regulation, industry structure, organization structure,
occupational careers, and market
Use these to theorize within the production perspective
Utility of the production perspective seems clear but in 1970s when it emerged as a self-conscious
perspective, it challenged the then dominant idea that culture and social structure mirror each
other
Views culture and social structure as elements in an ever-changing patchwork
Diachronic dialectic between small and large organizations in the music industry in which the
homogenization of music resulting from the consolidation by large firms was broken by
innovative sounds
Market niches were created, refined, conceptualize and ignored
Partitioning theory suggests that niches supporting the generalist and specialist organizations
are clearly distinct
Greater intensity of competition among generalists led to an increased rate of founding of
specialists
Innovative movie genres were more likely to come from specialists
Most consumer industries are able to support both distinctive specialist and generalist mass
market niches
Resource partitioning show that industry changes are dictated by whether producer firms are
specialists or generalist as well as by the nature of product offered
Prime research questions in sociology of culture: the degree of fit between social class and culture
class
Although more people of high status still consume the fine arts and other markers of cultural
capital, they no longer thing of inferior
Study of musical taste of the range of status groups
 Cultural symbols of class position are undergoing a profound transformation
 Show high status by being cultural omnivores, consuming but appreciating forms of popular
culture
 Lower status: found groups who are involved with a narrow range of cultural expressions
(omnivores)
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The Dialectic of Resistance and Appropriation
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Marginal youth groups
 Focused on how young people take the products given to them by cultural industries and
recombine them in unique ways to show their resistance to the dominant culture and give
expression to their own identities
 Basic model of resistance elaborating a dialectic of symbolic resistance and appropriation
Dialectic has the following stages:
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 Multinational producers attempt to structure the desires of potential buyer by flooding
market and promoting intensively
 Individuals pick goods to construct authentic expression of themselves
 People seek out like minded rebels and set a cultural choice that fit with a certain group
identity
 Authorities may ignore the resistant style but if it messes with law it will be seen
 Reaction of authority provides media attention and attract large number of youths
 The final stage is the industry converts revolt into a style and the symbols are then mass
marketed back to the many followers who want to buy into the form of resistance
Although the notion of symbolic resistant may shape fans definition of authenticity
Number of studies show that much of what is taken is manufactured by consumer industry
Music industry
Market
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Rock music displaced swing bands to become the dominant form of U.S popular music
 Before rock, innovations in technology were in hands of big corporations
 Technological advances worked to the advantage of smaller firms
 Same change occurred in workings of law and regulations
 Four firms dominated the industry structure of swing era
 The changes triggered alterations in law and technology, record companies entered the field
by making music directed at an audience
 In swing era, the organizational structure facilitated the efficient monopolizing of all the
factors of production
 In rock era, innovative, small and loosely structured organizations gained market share
 Swing era: people lived out their occupational careers as specialists within one corporation
 Rock: workers had little job security
 The market in swing was: one homogeneous mass
 The market in rock was: an ever-expanding set of heterogeneous niches
 Changes in each facet, made rapid displacement of the swing to rock revolution
Technology:
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Provides the tools with which people and institutions augment their abilities to communicate and
changes in communication technology destabilize and create new opportunities in art and culture
The amplification, manipulation, and transmission of sound radically altered music in the
twentieth century
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Recording and radio made it possible to project sounds over time and space
Microphones: enabled singers and displaced full voiced operatic pop singers
Electronic manipulation of guitar sound transformed pop music
Digital communication media also helped the rapid globalization of culture
Laws and Regulation:
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Create ground rules that shape how creative fields develop
Griswold shows how changes in copyright law can influence the kinds of novels that are published
Popularity of American novels that traced the struggles of lone men against the forces of nature
in 19th century
She contrasts these with the British preference of novels for domestic manners
Enduring differences between American and British culture
American publishers preferred works by English, because they would be sold in US without paying
copyright fees
Copyright law of 1909 put American and English authors on same footing, this led to an
increasing number of American authors published “English style” novels of manners
Industry Structure:
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Industrial fields ten to coalesce around new technologies, evolving legal arrangements and newly
conceptualized markets. “Institutionalization”
Process include fine arts, seven streams of commercial music, country music, photography, film
industry
Established industrial fields re-constitute themselves largely in response to 3 forces:
 Observations on the French art world
 Account on the deinstitutionalization of prime-time television production
 Study of the rise of microbreweries
Creative industries structured in 3 ways:
 Small competing firms producing diversity of products
 Few vertically integrated oligarchic firms that mass produce few standardized products
 More open system of oligarchy of a niche market targeted division plus small speciality
service
Commercial music industry has evolved all three of these forms.
Late 1940s, a few large firms dominated the field and bland homogenous music predominated.
Large firms dominated the field and bland homogenous music predominated. In the 1954-1968
period, many small record companies prospered, and the music became highly diverse and
innovative, but by the late 1980s, the oligarchic firms were able to dominate by buying or building
niche market divisions and making diverse music that generally was not innovative.
Organizational Structure:
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Three forms of organizations are characteristic of the cultural industry
 Bureaucratic form with a clear-cut division of labour and layered authority system
 The entrepreneurial form having neither a clear-cut division of labour and not a layered
hierarchy (short term success)
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 Variegated form of large firm that tried to take advantage of flexibility of the bureaucratic
form without giving up central control through short term contracts
Large firms are better at exploiting the commercial potential and predictable routines and
distribution channels
Small and simple: focus on entrepreneurial leadership and informal interaction for rapid decision
making and communication
Small organizations are better at scanning and exploring new fads and fashions
Synergy and branding strategies that results from creating interrelated products in distinctive
cultural field has led to the rise & domination of large conglomerates
However, to reap the benefits of simple structures, large conglomerates tend either to reorganize
into multiple, small, distinctive units
Large organization are dictated by logic of standardization and marketing
Occupational Careers:
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Culture is produced through sustained collective activity
Each cultural field develops a career system
Culture of production: working relationships by creative workers developed
Crane (1976) showed how reward systems in art, science, and religion shape occupational careers
that in turn influence the symbols produced
In competitive environments, careers tend to be chaotic and foster cultural innovation
career-building market-sensing entrepreneurs enact careers from the "bottom up" by starting
from the margins of existing professions and conventions.
Market:
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Markets are created by producers to give what the consumers want
Markets results from actions of cliques of producers who interact and observe each other and
then attempt to satisfy the consumers tastes
Once a consumer’s tastes are put into a market, the people in the field tailor their actions to
create goods that will match the consumer’s tastes
Music industry: weekly charts, taken to represent the flow of consumer tastes
Summary of model
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If there is one change in one of the facets it can start a cycle of destabilization and reorganization
in the entire population nexus
Cultural fields trend toward one of three states
 Oligopolistic and stable, producing unimaginative culture fare
 Turbulent and competitive, nurturing cultural innovation
 Competitiveness managed oligopolistic control fostering diversity without innovation
Combining oligopoly and competition make the advantages of both stability and innovation more
noticeable or does it make their darker sides more noticeable, the career instability and low rates
of innovation in culture
Conditions of production don’t only shape culture, regular endogenous variations in taste are also
important.
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The production perspective in organizational research
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Production perspective prime model of post bureaucratic organization
Studies of
 How theories of effective management change over time
 Institutional processes that guide decision making in ambiguous contexts
 How organizational networks facilitate symbol production
 The dialectic between specialist and generalist organizing in making markets
Together they show how culture shapes and is shaped by organization
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Cultural Industries & Organizational Design
Article 1: Starkey, K., Barnatt, C. and Tempest, S. (2000) - Beyond Networks and Hierarchies:
Latent Organizations in the U.K. Television Industry
Highlights the benefits of TV content production in latent organizations of freelancers – as opposed to
one-off project organizations – in the UK TV industry after the 1990 Broadcasting Act and subsequent
vertical disintegration
Managers in range of industries face uncertain marketplace.
One consequence of this: shift away from hierarch and vertical integration toward more flexible
network forms of organisation.
 Networks represent an alternative to hierarchy markets.
 Hierarchies impose high staffing costs through retaining personal and indirectly through
administration and supervision needs.
 Markets more efficient in reducing costs.
 Networks reduce costs by externalising in-house activities and guarantee minimum quality by
holding promise of repeat contracting upon satisfactory performance.
 Latent organisations:
 Are forms of organisation that bind together configurations of key actors in ongoing
relationships that become active/manifest as and when new projects demand.
 Offer the means of reuniting key actors for specific projects.
 Defining latent organisation - Miles and Snow (1986) identified the emergence of network
structures in number of contexts, including cultural industries.
 Such networks are most effective organisational arrangement to cope with an increasingly
turbulent competitive environment.
 In contrast to other forms of network, it persists through time as a form of organisation that is
periodically made manifest in particular projects.
 Provides an alternative to hierarchy, market and other network forms of organisation where
relationships are ongoing.
 Offer a unique way of managing strategic challenges.
 ‘Latent’ in sense of existing but not developed or manifest’
 Latent relationships are different due to the connection that exists between the broker and
the agent.
 Allows constant configuration of same members that can be used over time.
 Offer opportunity to generate competitive advantage.
Latent organisations in the UK television division industry
 Traditional organisational context for this form of production project has been within large.
 TV industry in late 1990s contains complex array of both independent production companies and
number of suppliers who amalgamate programmes into channels and distribute to the viewing
public.
 BBC and ITV have moved away from a total reliance on in-house production.
 Local political agenda has led to impacting on global industry and led to emergence of ‘publisherbroadcaster’ model - those who provide programmes to viewers increasingly buy product from
external suppliers.
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The primary network of amalgamation and supply is supported by a secondary programme
production network.
 The leveraging of established teams in the creation of new programme materials has been common within vertically integrated producer broadcaster organisations.
 With the shift towards external sourcing of programmes from the external marketplace, it was
feared that the ability of large organisations to draw and redraw from the same successful
production teams would be lost.
 A sense of partnership is crucial - Individuals and companies develop a reputation for their ability
to satisfy these criteria.
 Companies build reputation in particular market segments.
 Sustainability of Latent Organisations
 Latent organisations within the TV industry are highly dependent on ‘brokers’ that connect with
the ‘programme buyers’ to the ‘programme sellers’.
 Those two key sets are responsible for maintaining the latent organisation upon which the TV
network depends.
 ‘Programme sellers’ work independent programme maker whose role is to promote company’s
ideas.
 Successful programme buyers need to foster a strong knowledge of any programme seller's ability
to consistently develop and access talent in a given latent organisation.
 Both programme buyers and sellers will become most successful by obtaining and maintaining
the best knowledge of each other.
Conclusions:
 In UK TV major changes occurred in organisational form due to fragmentation in programme
supply due to new channels.
 Importance of latent organisation is to sustain and continually reanimate successful latent forms
of production network.
 Three reasons of importance:
 Firstly, as the commercialisation of the cultural industries continues, the risks of costly
projects will have to be managed in disaggregated industry structures.
 Secondly, from the perspective of content sellers, the need to recapitalise on past successes, if
only in order to survive in increasingly harsh market conditions, cannot be ignored.
 Thirdly, in an industry characterised by great uncertainty and mass unemployment, the
desire for on- and off-screen talent to belong to a durable community as a psychological home
beyond the death of the vertically integrated company should not be underestimated.

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Article 2: Leblebici, H., Salancik, G. R., Copay, A. , King, T. (1991) - Institutional Change and the
Transformation of Interorganizational Fields: An Organizational History of the U.S. Radio
Broadcasting Industry
Historical account describing how radio broadcasting evolved as a privately operated and
commercially supported activity and how its exchange practices changed as a result of consecutive
transformations of its institutionalized medium of exchange.
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How institutional practices change over time in an interorganizational field, in the
historical context of the U.S. radio broadcasting industry:
The radio broadcasting is less than a century old but has already had a rich history of
technological innovations, government interventions, personal rivalries and changing
tastes in mass communication
Broadcasting evolved uniquely in the US into a privately owned and operated commercial
enterprise
Broadcasting involves both public and private goods
Radio signals that carry programs (like music or news) are public goods  their consumption is
nonrival (use of one or more radio receiver does not reduce the quality of signals to others) and
nonexclusive - everyone with a tuner can receive them  prone to free-rider problems 
difficulties for producers and broadcasters to organize transactions because it is hard to realize
the actual value and control the consumption
THEORETICAL BACKGROUND AND CRITICAL PUZZLES
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Two theoretical puzzles that arose: reconciling technological imperatives with institutional
constraints & how new practices replace established ones
Technological imperatives and institutional constraints
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Institutional arguments usually rest on a fundamental distinction between institutional and
technical sources of organizational practices
Technology is said to be the source of variation. A new technology offers new possibilities for
solving problems.
In contrast, institutions are said to affect organizations through regulation. Organizations survive
by conforming to institutional norms, lessening differences in their practices
Initially some organizations enact a practice because of the technical or economic requirements
of their tasks  innovation gains legitimacy, others imitate the practice and accept its validity
and value uncritically
However, a theoretical problem arises if one accepts the argument that organizational interests
as well as task requirements are institutionally defined and shaped.  are practices that were
abandoned for new ones truly institutionalized?
Institutional isomorphism and institutional change
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Concerned with how new practices can spread in an isomorphic institutional field
(Isomorphic definition is - being of identical or similar form, shape, or structure)
Change in existing practices becomes possible only as a result of forces outside of a social system
in equilibrium
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How exogenous elements penetrate the institutionalized context and produce change in
organizational practices is sometimes explained by introducing the concept of power, or what
can be called the structural politics of institutionalization 
Because the creation and change of institutions are expensive, they require high levels of interest
and resources  only institutional entrepreneurs – organized & possess sufficient resources – are
capable of introducing institutional change
Efforts to change institutional environments can proceed in two ways:
 powerful organizations force their immediate relational networks to adapt to their practices
 powerful organizations attempt to build their goals and procedures directly into society as
institutional rules (especially organizations linked to state)
Both emphasize the importance of the state, self-interests and agents in the evolution of
institutional practices  question is though why those in power willingly change their practices
(they could also be the most to lose)
 DiMaggio (1988:) suggested that the "success of an institutionalization process creates new ...
legitimated actors who… pursuing distinct interests, tend to delegitimate and
deinstitutionalize aspects of the institutional forms to which they owe their autonomy and
legitimacy."  successful organizations can still create its own contradictions
 Deinstitutionalization: given the nature of institutions they can only produce stability in the
macro order through their practice at the microlevel.  entropy in a social system is
increased . . . by inconsistencies or even conflict between social order at the macro and micro
levels."
An alternative possibility is that an institution's success creates conditions that motivate its
change.
CORE ASSUMPTIONS AND CONCEPTS
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In institutional research, an interorganizational field includes actors and their actions. The actors
are organizations or agents that interact directly through exchange or indirectly through
competition.
An interorganizational field = historically specific practices and transactions produced by
network, cultural, and historical actors and their actions
Regulations specify actors' rights and obligations in relationships and, hence, constrain their
potential actions
 property rights shape social and economic practices by limiting the use actors may make of
their capabilities
 regulations do not independently determine the behavioral patterns in practices they
indirectly do so by assigning rights for using existing capabilities
Practices = agents' specific actions within an interorganizational field
 (in this study): exchange practices involving the financing, production, transmission and
selection of radio programs and signals
 assumes that practices are voluntary and not required  participants can at any point act
otherwise
o actors have discretion and are not passive agents acting under complete constraint
Institutional practices = rationalized (gain and maintain their legitimacy through the application
of substantive, legal or formal rationality) standard (commonly selected) practices.
ORIGINS OF THE BROADCASTING INDUSTRY AND MECHANISMS OF INSTITUTIONAL CHANGE
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Agents invent or modify practices to solve the problems that arise as they attempt to realize value
from their transactions with each other
 the problems they face come from the goods they are transacting and the solutions they
evolve necessarily come from those possible within available resources, technology, and
regulatory constraint.
 The goods being transacted also influence these selections, for they define the institutional
framework within which solutions are rationalized
 The nature of goods defines the ways
o property rights can be allocated
o exchange can be accomplished
o value from exchange can be determined
For private goods, institutions may exist to specify ownership rights and protect them through a
judicial system. Market institutions also may exist so that rights to goods can be transferred easily
through private contracts. Such private agreements facilitate exchange and generate divisions of
labor, which in turn organize interorganizational fields.
For common-property goods, community or state institutions may exist to assign rights among
contending parties.
For public goods that lack technical or social mechanisms to allocate or transfer rights,
conventions may exist for coordinating transactions.
For goods with ambiguous or as yet undefined properties, analogies may be used to anchor
transactions to existing institutional practices in other domains
how the industry addressed the problems presented by the three goods in broadcasting reveals
that three mechanisms introduced new practices into the field: analogies, private agreements,
and conventions.
RADIO SPECTRUM: INSTITUTIONAL CHANGE THROUGH ANALOGY
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Radio frequencies have no value if multiple broadcasters use it simultaneously for carrying to the
same receiver  need to develop a practice
Even though this interdependence sounds obvious radio was not initially viewed as a mass
broadcasting
 1920s a political debate: who do the airwaves belong to?  only choice was to find a suitable
analogy and establish an institutional framework
 first analogy by US Navy: matter of national safety; should operate like post office or public
school
 in support of private ownership: “magazine of the air” - some stations that were operated by
newspapers gave way to this idea and were supported by stations who opposed government
control
 third analogy was suggested: a transportation model: radio spectrum was to be understood
as a public conveyance  legal framework existing for international waterways was to be
applied: any private right that might exist could also be subject to the power of the federal
government  this view was adopted with the Radio Act of 1924
1925 regulatory agencies were formed to control the allocation, use and transfer of spectrum
rights under the general guidelines of public interest, convenience or necessity
RADIO APPARATUS: INSTITUTIONAL CHANGE THROUGH PRIVATE AGREEMENTS
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Analogies helped solve problems of coordinating the spectrum but private agreements were more
important for the transaction problems associated with radio equipment.
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Practices had to evolve to integrate various components of broadcasting equipment
 patents for technical innovations were held by many individuals and companies  issues with
key patents and coordinating relationships between and among manufacturers and
broadcasters
 amateur radio operators were a big problem because they pirated innovations  posed a
threat to stability
o these problems were addressed by a pooling agreement between major patent holders
1921  separation of manufacturing from broadcasting activities  drastic shaping of
the industry’s subsequent organization  institutionalizing the sale of transmitters and
receivers as distinct activities rather than as complementary components for use only in
point-to-point communication
RADIO SIGNALS: INSITUTIONAL CHANGE THROUGH CONVENTIONS
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For the evolution of institutional practices in radio signals, the critical impetus was the
fundamental interdependency between the broadcasters (the producers of radio signals) and the
listeners
what triggered the creation of new institutional practices was different for radio signals. Instead
of analogies and private agreements, a third kind of triggering mechanism: conventions.
Conventions are defined here as the recurrent patterns of interactions in an interorganizational
field that are not directly supported by coercive or normative processes  a subset of practices
 Unlike institutions, at any given time there can be more than one mutually beneficial
alternative convention, with none strictly preferred
 Conventions that solve coordination problems thus function as methods for social choice, but
the choices need not be optimal for some or even for all participant
 Conventions may become institutional practices by acquiring a normative character, when
sustained through some form of legitimacy
CONVENTIONS AND INSTITUTIONAL TRANSFORMATIONS
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(3x 15-year periods) critical phases in broadcasting: 1920-1934, covering the beginning of the
industry and its commercialization; 1935-1949, the so-called golden age of radio, covering the
growth of networks; and 1950-1965, covering the rise of local independent stations and the
decline of national networks
THE AGE OF MANUFACTURERS (1920-1934): The transformation from public good to private exchange
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A successful economic cycle of transactions between listeners and broadcasters was crucial for the
evolution of broadcasting from a public good to a privately owned and commercially supported
activity in the US
Three interrelated practical concerns dominated the early experimentation
 how should broadcasting be financed?
 who should produce these programs
 how should they be distributed or made available to the listening public?
Throughout the 1920s, the industry organizers continued thinking of radio in terms of the tolls
collected for messages from specific senders to specific addressees and of the sales derived from
manufacturing and engineering the requisite equipment
The idea that radio was an independent, mass-broadcasting media evolved from the activities of
amateurs in the field.
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selling parts and new stations coming  massive revenues  the industry's first convention and
first major change since the patent-pooling agreement of 1921.
Small-parts manufacturers who supplied many amateur stations began using broadcasting
themselves to attract customers for radio sets. They produced primitive programs for local
consumption and organized clubs from community enthusiasts.
 Westinghouse was the first established player to follow this  selling radios through
broadcasting
o it had invested extensively in producing radio equipment for military use during world war 1
 left with huge idle capacity, weak competitive position in international communication
o developed a station KDKA 1920, that had a daily schedule, assuring regular services to
receiver purchases
In 1923, out of 476 radio stations with known ownership, 324 were operated either by radio
manufacturers (47 percent) or by commercial establishments like department stores, art dealers,
or jewelry and music stores (20 percent) (Banning, 1946). The rest were educational or amateur
stations.
Demand for radio sets kept growing, and the national ownership of radio increased six-fold from
1920 to 1926. At the end of 1934, more than 65 percent of U.S. households had at least one radio
receiver.
Radio stations were operated either by the radio manufacturers or retailers to stimulate the sales
of receivers or by newspapers and department stores to spotlight their services.
 Broadcasting had to be continuous though  broadcasting production costs were thus also
continuous but receiver sales were not  broadcasters faced dilemmas and needed other
ways to get revenues
o In 1923, Radio Broadcast, a general-interest magazine for radio enthusiasts, opened a
public debate about financing broadcasting as an independent venture
o Many ideas were tried and introduced:
 public-spirited citizens turned several universities into broadcasters with gifts of
stations
 some operated stations as a public service
 some made use of radio clubs that paid for broadcasts through listener donations
 WHB initiated the idea of an “Invisible theater” to which radio fans bought tickets
 Most dominant players preferred public financing. It promised more stability and
least administrative effort’
Some bought radio stations to offer services
 Many opposed: debates about the morality
 Department of commerce brought together experts to form some legislation but while direct
selling was never forbidden the conferences helped evolve the concept of indirect advertising
Advertising success also exposed some acute limitations in the patent-pool contracts  AT&T
began assert aggressively its exclusive right to collect tolls for commercial broadcasting similar to
long-distance telephone calls and to interconnect stations by wire for chain broadcasting
 Manufacturers in the pool responded: accepting a modified version of advertising sponsorship
by hooking together a maverick network on Western Union and Postal Telegraph lines
 Strained relationships were resolved in 1926 through a binding arbitration when AT&T
received a monopoly of providing wire interconnections between stations and pulled out of
the radio business completely by selling its station WEAF to RCA
On September 9, 1926, RCA formed the National Broadcasting Corporation (NBC), with ownership
held by RCA, GE, and Westinghouse, as the first network of broadcasting
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the original patent-pooling agreement collapsed completely in 1930  establishment of the
existence of three specialized groups: telephone, manufacturing, and broadcasting.
 advertising became broadcasting's established mode of financing
 Advertisers, who earlier needed to operate their own stations in order to develop goodwill with
the purchasing public, now supported broadcasting by sponsoring individual programs
 The first sponsors were the national manufacturers of branded, packaged consumer goods.
 sponsorship  created two new and important players in the industry, advertisers and their
agencies
 Thus, the two fundamental issues faced by the broadcasting industry-the financing and
production of programs-were resolved by defining programs as the basic medium of exchange,
financed by advertisers, produced by advertising agencies, and broadcast by the stations.
 the major changes of this era:
 the major critical evolution during this first period was differentiation and growth. In addition to
stations and networks, advertising agencies, independent producers, transcription syndicates,
station representatives, talent agents, and rating organizations grew in number
 The second critical development was the institutionalization of the sponsored program as the
medium of all transactions. The basis for organizing the field was no longer broadcasting in
general but the programs being produced, exchanged, and distributed. The new structure shifted
power from the manufacturers to the advertising agencies.
 Three rationalized myths were firmly held at the close of this first period: the number of radio
stations are limited by technology because of long-distance interference; live programming is the
essence of radio; and only networks could help finance expensive programming by spreading costs
over many stations. These, like the inaugural myths of radio-broadcasting was a point-to-point
medium and advertising was unacceptable to listeners-would also be revised.
 the structure of how things worked and the participants:
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Growth in numbers during each period relative to the growth of advertising dollars spent for
radio broadcasting. The area of each circle represents the average yearly rate of growth (white)
or decline (black) in each group's population relative to the rate of growth in advertising
revenues. Advertising revenues are used to index growth because they are the economic base of
the industry.
THE AGE OF RADIO NETWORKS (1935-1950): The Transformation from Exchange of Programs to
Exchange of Time
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Golden age of radio
 expansion and influence of national networks
Era marked by stability
 Growth rates were steady for most participants, except transcription syndicates and regional
networks.
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 Major commercial networks, mostly responsible for this stability, were able to establish their
dominance and to control entry of new competition by taking over programming from
advertising agencies.
the innovations that led to the golden era addressed the 2 major uncertainties once the
relationship sponsored programs organized transactions
 the relationship between the networks and their affiliates, which depended on the popularity
of network programs
 the relationship between the advertising agencies and the networks, which depended on the
agencies for producing highly rated sponsored programs.
The first network idea (developed by AT&T in 1922) was simply a transmission hookup, with
programs supplied by sponsors  networks had to produce more programs to keep an audience
tuned in
two basic arrangements became most popular to provide both sponsored and sustaining
programs
 NBC & CBS
o offered affiliates a package of both sponsored and sustaining programs in return for
broadcast time
o later on evolved formalized arrangements
 At first NBC reimbursed its affiliates for the sponsored programs they accepted and
charged them for broadcasting its sustaining programs
 created uncertainty for the network: how much put into creating a sustaining
program and no guarantee of an audience for sponsored programs
 CBS created a simpler but rigid contract
 offered affiliates free sustaining programs without obligations to use them. Acquired
the option to fill any part of its affiliates’ schedules  access to the best time slots
 ABC and NBC adopted similar arrangements later on
o MBS
 The mutual broadcasting system organized this in different lines: member stations
owned it and produced their own commercial programs or accepted programs from
sponsors
 the network in a sense was thus a clearing agency but it never became as stable as
the commercial network arrangement
Despite the limitations most stations found it necessary and desirable to belong to a major
network; in 1945, 95 percent of all commercial radio stations were affiliated with a national
network.
 as long as the programs were popular the stations only experienced a few problems
 the need for popular programs however, changed the relationship between advertising
agencies and the networks
o networks started to produce, schedule and sell their own programs  sustaining
programs were used to experiment new material
o end of 1940s networks became major producers and extended their domination to
other services  replaced advertising agencies as the dominant players
o however, the continuous experimenting increased costs and the old problem of how to
pay for broadcasting became apparent again
Competitors of the networks found a new more flexible way to finance the radio
 network contracts were exclusive which left some larger cities unaffiliated and uncontrolled
 these independent stations evolved the practice of spot advertising  advertising
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announcement between programs (for advertisers who could not afford sponsoring an entire
program)
 these independent stations also created more local shows that drew more audience to it
 revenues from national spot and local advertising grew to equal network advertising in this
period
By 1950, networks were losing the dominance they gained by taking over program production
 ABC (American Broadcasting Company), the newest network, formed in 1945, was the first to
suffer the ill-effects. In 1947, when it could not find enough national sponsors to cover its
programming costs, it broke the old taboo and imitated the independents' use of recorded
program material
Sponsoring the whole program was not appealing anymore and fewer advertisers started to stick
with in between ads
Network endorsement of recorded and cheaper programs exploded transactional opportunities in
broadcast
o All parties became less dependent on any particular set of transactions
THE AGE OF INDEPENDENT RADIO STATIONS (1950-1965): The Transformation from Exchange of Time
to Exchange of Audience Exposure
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growth of independent stations – 2 exogenous pressures accelerated this
 increase in the number of radio stations due to changes in FCC regulations and growth of tv
1952 – when tv became a medium for mass communication  end of radio?
 general exodus of staff from radio into tv’s market
Networks shifted their attention to tv
new opportunities for broadcasters
 many with technical knowledge of the radio returned from WW2
 During WW2 restrictive regulations  after FFC was pushed to relax these by veterans and
congress (especially technical standards for local stations)  growth in small markets due to
reductions in allowable ranges for local stations  small towns stopped relying on distant
stations and had their own local radio  Number of AM stations increased from 940 to 2350
By adding video to already successful radio programs, networks both capitalized on their
experience and expanded it to dominate the new industry. Both the networks and the national
advertisers supported TV at the expense of radio broadcasting
Radio tried to cope with the rise of tv
 Many of the period's innovative and successful experiments were taking place at small,
independent stations far from the media centers  KLIF and KOWH created an entirely new
radio
o “Deejays” – the previously local announcers started to tailor music and create their own
on-air personalities  costs for broadcastings went down significantly
 Radios started to specialize because of localization
o audience was seen in segments and they targeted these
o advertisers were offered a mini-audience that fit perfectly into their target segment as
well
 Promotion of record sales through radio started
o record companies provided newest hits  costs for stations went down since they also
provided free publicity
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 regional and national advertisers were won back from TV  during this period local and national
spot advertising became more critical than network-sponsored advertising
 Regional networks tailored their formats  4 formats; entertainment, information,
contemporary and American FM, however the local audience wanted the local DJs 
affiliates first dropped sustaining programs from networks and then most of the sponsored
programs  clearing for network shows stopped  network-affiliated stations dropped to
32% (compare to 1945 it was 95%)
 These new station practices cut operating cost drastically and made local broadcasting a
feasible economic activity
o still roughly 1/3 of AM and most FM stations were losing money the number of stations
increased at greater rates than ever before
 In a sense, a new dynamic equilibrium was achieved between micro-level interests and macrolevel structure.
o the new division of labor was firmly based on a new medium of exchange – promise of
exposure
o The belief that networks and live programs were necessary for survival decayed when less
expensive but equally effective local program formats worked as well
 The rates of growth in advertising agencies, independent producers, and talent agencies were all
negative. The growth registered in the number of networks reflected a rise in regional network
CONCLUSION
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The organization of an interorganizational field is a product of practical solutions developed at
the micro level and institutionalized through conventions at the macro level. This organization,
however, is not permanent but temporary and is only one among many possibilities. Its
production and reproduction are an outcome of institutionalized definitions of what is being
transacted.
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First, at any given stage of its evolution, an interorganizational field has more than one potential
alternative for organizing the fundamental interdependence among its participants. Any
particular choice from these alternatives defines not only the relationship between the actors but
also what resources are critical, what defines success, and what positions in the field are pivotal.
 For radio the fundamental interdependence was the relationship between broadcasters and
listeners
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Second, radically new practices that may evolve into conventions are most likely to be introduced
by parties from the fringes of an interorganizational field who are looking for ways to solve the
problem of realizing value from transactions. These players are the newer and/or less powerful
participants, for whom experimentation is less costly in final outcomes and who are less likely to
be sanctioned by more central players.
 For broadcasting the new practices were always introduced by the less central parties of the
given period
o Initiated by shady traders, small stations, record producers, weaker networks or weaker
advertising agencies
o The powerful parties who had vested interests in the institutionalized conventions used
their resources to maintain the status quo or introduced practices that confirmed
established conventions.
Third, institutionalized conventions, although they solve coordination problems, produce
distributional outcomes that are not inherently advantageous to all parties, intensifying
competition for the resources that are deemed necessary for success as an established player.
 for broadcasting the competition among core players intensified after conventions became
established
Fourth, intensified competition encourages dominant players to adopt those practices that are
successful at the periphery and thus legitimizes these radical experiments.
 for broadcasting sponsorship, spot advertising, transcription, and recorded music became
legitimate as a result of their adoption by the core participants, who were pressed with the
competition within prevailing institutional practices.
Finally, new conventions, based on different premises relevant for the fringe players who
introduced them, transform the pattern of transactions among participants and thus alter
definitions of success and its critical resources. The more legitimate a new practice becomes, the
more it erodes the centrality of the established players and the institutional practices sustaining
them.
This does not mean, however, that in each case the fringe players need to become the new
dominant force, but only that the new conventions reorganize a field's pattern of transactions
away from its central institution
 for broadcasting manufacturers who legitimized advertising paved the way for financing
radio and propelled advertising agencies to the center. Advertising imposed a need for
dependable delivery of an audience. Networks were an answer, but it put them uncomfortably
between advertisers and stations to control production. Then, affiliation with a network and
popular programs became the critical resources, straining the unaffiliated to find new ways
of competing and new definitions of programming and sponsorship. As networks accepted
recorded music and format radio, their own relevance eroded, organizing the industry
around the institution of selling time and gaining audiences at local markets, for which other
players became critical
 The cycles of transformations in the conventions, organization, and institutionalized
practices in broadcasting show that institutional change is the product of
endogenous forces that are associated with the historical evolution of the field itself.
Though they are products of practical consciousness, institutions produce
unintended consequences that define the ends and shape the means by which future
economic and political interests are determined
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Article 3: Djelic, M.L. & Ainamo, A. (1999) - The Coevolution of New Organizational Forms in the
Fashion Industry: A Historical and Comparative Study of France, Italy, and the United States
Historical comparison of the organization of the luxury fashion industries of France, Italy and the U.S.
characterized by “umbrella holding”, “flexible embedded network” and “virtual organization”,
respectively.




In many industries, the contemporary context of acute environmental dislocation shows the limits
of traditional organizational recipes.
Globalization are radically redefining environmental conditions.
Periods of severe environmental dislocation call for flexible organizational solutions that can
adapt to changing purposes.
For many years, luxury fashion companies operated within a relatively stable environment, and
the “craft” model of organization, characteristic of French pioneer firms, remained dominant 
move towards greater organizational flexibility in recent years.
Organization Forms and Environments



Environmental transformation and organizational change interplay through time, feeding upon
each other.
Large size companies turned coordination and control into key organizational challenges
Solution: standardization of organizational routines + hierarchical + rigidly centralized form of
control and reporting.
 Bureaucratic paradigm  one best way?  More evidence challenges this

“Pre-bureaucratic” craft organizations survived, particularly in those industries where cost
competition was not significant, and customers valued quality craft production.
Argument against:


Environmental characteristics essentially determine and shape organization forms.
Strategic choice and resource dependency theories defended the idea that organizations choose
and shape, at least in part, their own environments.
Environmental transformation and organizational change interplay and feed upon each other
through time.



Period of relative environmental stability: existing and dominant organization forms define
organizational populations and shape in part environmental landscapes. Environmental
transformations tend to affect organizational populations and forms.
Period of relative stability: change takes place but only in an incremental way.
Organizations and populations “exploit” existing resources, dominant solutions, and
institutionalized search routines  trigger exploration  radical search for entirely new kinds of
solutions
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End of twentieth century:



Significant environmental dislocation
Increasing turbulent, ambiguous and hypercompetitive environmental conditions
The capacity to search for or “explore” appears necessary to ensure organizational survival.
 Companies should be moving toward looser types of integrating mechanisms and more flexible
organizational features  promote cultural and political variety and avoid inefficiencies, fragmentation
and political strife.
Solution: A redefinition of the organization as a “nearly decomposable system”



Pioneering experiments by leading firms appear to point toward this kind of flexible combination
of subsystems or modules, where a core competence corresponds to each module.
BUT: modularity can indeed make it possible for organizations to reconcile flexibility with cost
efficiency.
Only makes sense within a particular institutional context and in connection with specific
historical legacies.
Case study: The Luxury Fashion Industry
Definition:


There is no such thing as an objective and unanimous definition of aesthetic value.
Key characteristic of luxury fashion companies: not just delivery products but also diverse sets of
representations.
Methodology:
1. Draw selectively upon the first results of a large-scale, comparative project on the luxury goods
industry  Objective: Identify and describe evolutions through time and tendencies with regard to
environmental trends, or organizational forms, and managerial competencies.
2. Include around 40 companies in three different countries.
3. Consider only the fashion segment of the luxury goods industry. Companies are selected for their
ideal typical nature and/or for their overall weight in the national or worldwide markets.
4. Results reflect information obtained from interviews, press reviews and research papers.
5. The methodology has both comparative and historical dimensions  Find similarities and
differences.
6. Constrained our ambitions  Claim: These national patterns are ideal types.
7. Companies representing each country:
 France: LVMH, Pierre Cardin
 Italy: Armani, Gucci, Prada
 US: Ralph Lauren, Calvin Klein
Environmental Trends and Challenges
Before 1970: Stable. Nearly impossible for foreign competitors to obtain the label haute couture and
thus, at least until 1960s, to gain the legitimacy that was required to impose themselves within the
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industry  French players managed to define and control their own environment. Set creative and
fashion trends on worldwide impact.
Late 1960s: An evolution of the customer base and of its lifestyle has combined with technological
transformations and a globalization of markets  increasing competitions.
Original elite groups: worn only or mostly made-to-order clothes  decline.



Increasing costs and prices
Change in lifestyles
Value distinction, hierarchy, order, nobility
New group of customers: Searching for symbolic satisfaction






Value solidarity, meaning, genuineness, ethics
Look for perfect quality and service
Price
Immediate satisfaction
A fit between the space for dreams characteristic of a brand and their own symbolic needs and
representations.
Make demand less homogeneous, reinforce a trend already characteristic of the industry’s
traditional markets  global challenge.
Italian and American: Defining customers as constructors or cocreators and not merely passive
consumers  challenge: accept and integrate different symbolic needs and expectations without losing
control of the identity of the brand.
Country Historical Context
France  Until
WWII,
industry is highly
stable. The business
was a craft and
labour-intensive,
doesn’t
require
significant
investments.
 Clientele was small
and homogeneous:
French aristocracy
and upper-middle
class.
 Image and success
depend on the
unique
creative
power
of
its
designer.
 Technology
and
organization:
Exploitation of old
and
seasoned
Response
Outsourcing and the Risk of Losing One’s
Identity.
“Breaking up the integrated, in-house process
and outsourcing or licensing parts of it
represented an obvious way to secure
advantages of scale and scope while still
integrating a degree of organizational
flexibility”
Risks:
 Stable organizational solutions were more
than a virtue  Bound to disrupt the
integrated in-house process  any attempt
to develop could threaten the specificity of
the products and identity of the company.
 Limited room for manoeuvre. Classical and
easy path to flexibility – outsourcing –
threaten the very identity of the companies.
Umbrella Holdings
Launch a diversification of the product range
and in particular to add subsidiary lines of
products to clothing.
 increasingly successful
Remark
Umbrella
holding
strategy is still
under
construction
but it’s the only
chance
of
survival in the
long term for
French fashion
houses.
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Italy
Americ
a
recipes
 Predominance
is
strengthened
by
the existence of a
protective set of
instructions
and
rules that all but
sealed
off
the
boundaries of the
industry.
 Creative spirit
tended to dry up and
global challenges were
becoming too strong
to be ignored.
Third Italy region:
strikingly contrasted
with
their
near
disappearance
in
some other Western
European countries.
Made up of large
numbers of small
entities  backed by
adequate institutional
and political support,
at the regional and
national levels.


Require integrating a degree of flexibility
and modularity within the boundaries of
the organization.
Traditionally amounted to creating, under
a single brand name, several relatively
autonomous organizational entities, each
being fully in charge of a given product line
and only controlled from the core.
Emerged as a set of flexible and relatively stable
networks, tightly embedded in local or regional
industrial communities.
 reconcile flexibility with almost limitless
production capacity.
Network:
 Small and stable, keep tight but still
informal control.
 Easily and flexibly manage variation in
demand
 Not have to sacrifice craft production or the
quality of the products.
Advantage:
 Creativity, adaptability and speed of
reaction
 Keep stricter control over products and
brands
 Decoupled somewhat their brand name
from the product and the production
process.
 Pay close attention to brand management
in itself
Economy: Sheer size Virtual Organization
and buying power   Establish themselves in the luxury fashion
invented
mass
industry without submitting to the
production and mass
stringent rules and requirements set up by
marketing. Size of the
the French community of couturiers.
economy
  Originally stated from mass production.
Economies of scale.
 Scale up their products and their image by
creating around their brand name
 Keep in-house only a minimal range of
activities.
Relatively easy. Why?
 French: Design and creation
 Italian: Manufacturing
The networks
of partners and
subcontractors
tend to have a
smaller
and
much
more
stable
membership
than
in
America.
How to sustain
growth?
Ensure
survival?
Create
conditions for
continuing
performance
independent of
the
current
designer
or
management
team?
The extent of
outsourcing is
much
more
significant,
with only a
minimal range
of
activities
being kept inhouse
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American: Brand management is the source
of competitive advance.
 Like Italy: Entirely licensed off or
subcontracted manufacturing.
 Unlike both: Outsourced (partially) design,
creation and brand management to
freelance.
Challenges:
 Shifting geometry of the network
Great number of interfaces between the various
modules

Comparisons
French
Weight of organizational legacies
and
institutionalized
practices
turned out to create significant
constraints, narrow and limit the
range of possible reaction.
 Disrupt the integrated, in-house
production process  Destroy the
value of the product and threaten the
image and identity
Umbrella holding: brings together
existing organizational entities and
brand names  rationalize a
number of shared competences while
respecting the autonomy and
integrity of each component module.
Italian
American
Made the most of the  More open network form.
industrial districts in which  Extent of outsourcing has
been
much
more
they were locally embedded to
significant.
construct
flexible
but
range
of
relatively stable networks  Minimal
activities are kept inwith regular partners.
house.
Consequence:
 More
activities
are
outsourced.
 Network of partners tend
to be tight and strictly  Increasingly smaller core
has been responsible for
embedded within the
the articulation of a series
local
or
regional
of relatively independent
community.
tasks.
 Foundation of trust  the
management of interfaces  Remain
flexible
and
fairly easy and not too
adaptable
 More responsible on the
costly.
manager.
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Article 4: Lampel, J., Lant, T., & Shamsie, J. (2000) - Balancing act: Learning from organizing
practices in cultural industries
This paper discusses five ambiguities or tensions that managers in the cultural industries must
navigate; all revolve around the question: What organizational form is best suited to production in the
CI?
To understand cultural industries, necessary to begin to distinguish characteristics
 Nonutilitarian nature of their goods
 Utility allows for systematic comparison of different products
 Provides a basis for the stable standards of quality
Cultural goods: experiential goods
 Value comes experiences that rely on using symbols to manipulate perception and emotion
 Impact of adding background film points to how subtle changes in cultural products can shift
resulting experiences
 Image on screen should dominate viewing experience
 Choice of soundtrack can alter viewing experience
Unpredictability of such a subjective experience can make it difficult to identify and establish clear
standards of quality
 Basic notions of quality tend to remain contestable in cultural industries
 In industries where goods are utilitarian, producers develop agreement on specific and
measurable standards of quality
 Cultural industries: represent abstract ideals rather than specific product attributes
 Opinions about quality can differ so strongly that producers find it hard to figure out why some
products do better than others
 Purchase decision before & after
 Understanding why products succeed or fail is difficult
 Due to lack of data
 Data is susceptible to multiple and contradictory interpretations
 They produce ambiguity that impacts on the ability of managers to make well informed
decisions
 Cultural products: more likely to find market success when they blend familiar and novel elements
 Familiarity
 Novelty
 To enjoy product
 Tastes are unstable and elements what are novel and familiar can change in different periods
 No specialists that can take products apart and point to problems when they arise
 Tacit knowledge is more important in cultural industries
 Talent, creativity and innovation = resources crucial to success
 Amorphous resources: cannot be clearly defined. Emerge from unexpected sources and lose
value
 Strategy in C.I: oriented to finding, developing, and maintaining control over these resources
 Artist and Repertoire (A&R) main task is to find new artists
 Long term survival of firms: depend on replenishing creative resources
 Process to generate them: poorly understood uncertainty how to detect them
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









 Managerial practices: professional training and partnership which are useful in other
industries are ineffective in cultural
Managing creative resources: key challenges to organizations in cultural industries
Recruit and motivate individuals to possess the insight & intuitive understanding of how creative
resources can be discovered & nourished
Their competitive advantages depend on finding these individuals & developing structures which
leverage creative resources
Two problems: demand patterns that are unpredictable and production processes that are
difficult to monitor and control
Evolution of cultural industries: driven by attempts to deal with these problems
Demand: firms shape consumer preferences by expending large scale resources
Shaping consumer tastes = difficult
Supply side: seek new ways of uncovering and managing creative inputs
Creativity comes from individuals whose talents and inputs can be organized and controlled
Striking balance between imperatives of creative freedom & commercial imperatives
Navigating within a cultural context:




Are systems of organizations that mediate the flow of cultural goods between producers and
consumers
To survive: orgs must reconcile the demands of artistic production with those of marketplace
Two areas are not only different in character but often in opposition
The strategies that evolve as a result reflect the opposing pressures exerted at each end of value
chain
 To understand cultural industries, you need to understand polarities that shape the choices
available to organizations in these industries
 5 polar opposites that define the field of action within the organization in cultural industries
operate
Artistic values vs mass entertainment:











C.I combine two realms of human experience
All societies produce culture as form of individual and collective expression of basic ideas and
aspirations
Artistic value must be balanced against its entertainment value
Combining art and entertainment is a source of continuing tension in cultural industries
Cultural industries strive to remain loyal to artistic values but also deal with market economics
Which imperatives should drive decision making?
Should values of art dominate with mass entertainment as secondary or should org use culture to
pursue goal of entertainment
Neither can prevail without destroying the identity of the organization as a symphonic orchestra:
coexistence is the only option
Polarization between art and entertainment is sharply delineated
The relationship is multidimensional hence more complex
Non-profit theatre: both competing and overlapping values
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

Organizations must balance & reconcile these values in line with relationships with key
constituencies
The value of performance and market success. Measured by the ability to select plays which have
the widest audience appeal: are more congruent with commercial success
Product differentiation vs market innovation?



Competition is driven by a search for novelty
Accessible and familiar
Two opposing pressures:
 Producers are pushed to seek novelty that differentiates products without making them too
different from others. This represents recombination of existing elements & styles that differ
but does not break existing artistic conventions
 Other hand; push to pursue innovation beyond existing limits
o Breaks new ground results in new types of cultural products
o Expand or fundamentally change the market
 New movie genres
 New genres = new types of products but novelty is derived from existing styles and
plot lines
 New genres are same criteria used to evaluate existing
Genre creation: form of product differentiation than as a form of market innovation





Tension between differentiation and innovation in modern art
Prior to impressionism: art was valued using a number of criteria of which innovation was one
Artists differentiate work from peers but maintain continuity with predecessors
Impressionists reshaped the foundations of modern art
Turning innovativeness of a work of art into the dominant criterion
Demand analysis vs Market construction:












Dispute of who see cultural goods as an expression of consumer needs and desires and those who
argue that consumers want is entirely shaped by imagination and creativity
Debate corresponds fundamentally different views of why cultural goods become successful while
other do not
Cultural good become successful because they tap into customers preferences or because they
shape tastes to suit their own production
Create standards which they are judged
Deliver experience meet these standards
Long periods of stability make managers go for first choice
This isn't good as music industry case shows risks involved with this assumption
Process of reading market cannot be distinguished from process firms use to construct it
Industry creates the mirror of the market
Works of art are not valued because of context in which they are produced by derive their value
from set of institutions in which art is promoted and exhibited
Influence shape processes in which works of art are selected for public attention
Rise of Impressionism made a transition of peer selection to expert selection
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

Revaluation of importance of innovation in art
Reshaped public tastes and how art market reads tastes of consumers
Vertical integration vs Flexible specialization














Organization look for gains by exert greater control over creation and delivery
Led to integrate all aspects of value chain
Coordination and scale advantages have to be balanced against disadvantages
Highly integrated firm would reduce creative freedom by pushing more coordination
Cultural industries: balance the need for integration with attempts of specialization
Specialize by reduce overhead and increase creative flexibility
Specialization allows to concentrate on activities that are focused on production and distribution
of goods
Firms choose to draw on advantages from integration or rely on specialization
Specialist producers = likely to create new genres than integrated studios
Integrated: benefited from this because distribution of films allowed them to expand product mix
Two types of firms develop symbiotic relationship: mutually beneficial to both
Innovative moves of specialist = contrasted by resources of integrated studios
Tv industry case: integrated broadcasters move away from full integration of production and rely
on networks of external specialists
Flexibility: allows broadcasters to reduce overhead with no effect on quality
Individual Inspiration vs Creative systems













Source of creative value: debate
Individual who is pivotal element or is it the system as a whole?
Individual is the key element; then need to find and develop these
If system: less emphasis should be put on individuals but more on processes, structures
Global media firms: individuals
Media firms are able to achieve both economies of scale and led by good individuals
CEO’s good decision making and strategies etc
Growth and integration: achieved without stress on speed
Mutually reinforcing relationship between individual CEO and system = strength of both
centralized and collective decision making
Tv industry: broadcasters rely on system of external specialists
System: sustained by latent organizations (rely on key brokers)
Broker creativity and talents are necessary to receive success but difficult to get these without the
talent
Individual and network = reinforce each other’s position and difficulty to separate them
Conclusion:





Investigate management practices and organization forms in cultural industries
Clearly different from other industries
Products evoke experiences and tap values and aspirations that are not in others
Bank on successful creativity (resource cannot be controlled)
Give rise to environmental conditions. High levels of ambiguity and dynamism
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

High levels of ambiguity and dynamism: force managers to seek new models for managing
operations
Firms must analyse market to understand consumer
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Cultural Industries & Marketing
Article 1: Voss, Glenn B. and Voss, Zannie Giraud (2000) - Strategic Orientation and Firm
Performance in an Artistic Environment
This article shows that an excessive customer – as opposed to a competitor or product – orientation
may have a negative effect on the performance of theatres
Main study’s focus  product development + marketing process



Customer orientation  integrate customers’ preference
Competitor orientation  integrate competitor intelligence
Product orientation  integrate innovation
Customers are:



Resistant to the idea of change
Limited in their ability to provide creative input
Unreliable in predicting which new product ideas ultimately will be embraced
Strategic orientation (Gatigon and Xuereb)



Three distinct orientations: customer, competitor and technology
Multidimensional construct that captures an organization’s relative emphasis in understanding
and managing the environmental forces acting on it.
Environmental forces are:
 Upstream suppliers of product inputs (intellectual capital, innovation)
 Downstream customers
 Current and potential competitors
Develop a conceptual framework that integrates empirical research. This framework identifies four
categories of variables that have been proposed to have a direct effect on firm’s performance:
1.
2.
3.
4.
Industry characteristics: Supply, demand, competitive characteristics
The strategic position: Firm’s relative position within its industry
Product characteristics: Product’s features
Organizational characteristics: How a firm manages its inter-functional activities
Hypotheses:
A. Link between performance and market/strategic orientation
 Market orientation provides a firm with a better understanding of its environment and customers
 enhance customer satisfaction
 BUT: Contingency framework may be appropriate for explicating the relation: Market orientation
is not related to a firm’s actual market share or actual net income growth
 Depends on industry characteristics, customer characteristics, or the type of performance
measure used.
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B. Industry Characteristics
 Moderating effects:
 Kohli and Jaworski: Three industry characteristics – market turbulence, technological
turbulence, and competitive intensity  either the market orientation-performance relation
was robust across environments or the statistical tests lack sufficient power
 Slater and Narver: Industry characteristics have little impact on the market orientationperformance link
 Atuahene-Gima: Consistent support for a moderating effect of three industry characteristics:
competitive hostility, competitive intensity and industry maturity.
 Gatignon and Xuereb: Support a moderating effect of demand uncertainty in a study that
examines the effect of strategic orientation on innovation performance.
 Direct effects:
 Industry characteristics may moderate the market or strategic orientation-performance
relationship in innovative environment
 Market orientation is less important when competitive intensity and hostility are low, and the
industry is mature
 Customer and technology orientations are more important, and a competitor orientation is
less important when demand is certain
C. Strategic Position
 Examine the association between performance and the firm’s relative level of resources, and we
expect the association to be positive, consistent with prior research.
D. Product Characteristics
 Hypothesis: Firm performance will have a positive association with the firm’s relative level of
product quality
E. Organizational characteristics
 Antecedent effects:
 Positive interdepartmental dynamics lead to higher market orientation and performance
 Centralization, formalization and departmentalization lead to lower information generation
and dissemination but to more effect organizational response to information that is
generated and disseminated
 Mediating effect: Inter-functional coordination as a distinct construct that mediates the effect of
market orientation on performance
 Moderating effect: Inter-functional coordination facilitates communication and activities among
the different functional areas that represent different strategic orientations within the
organization
Methodology:
A. The Non-profit Professional Theatre Industry
 Professional distinction: Theatres participate in collective bargaining agreements with the
various unions that represent professional actors, directors, and designers.
 Pursue nonpecuniary goals
 Represent producing as opposed to presenting theatres.
 Presenting theatres: minimal involvement in the design and production
 Producing theatres: intensive and ongoing new product development, responsible for
production inputs and processes  Unusual combination of environmental conditions:
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o High rate of innovation: Every play is a new product
o Low level of competition: Many non-profit professional theatres maintain a nearmonopoly presence
o Uncertain demand & Stable customer base: Significant portion of their ticket sales and
individual donations from a stable base of lead customers who purchase season
subscriptions each year
 Customer orientation might draw resources and attention away from more critical creative
activities
o Generation of accurate information regarding what customer truly want would be
limited by how informed or reliable customers are in identifying the available creative
inputs
o Unlikely that a director would be able to design an effective response
o Implementation of the artistic design does not allow for customization
B. Study Design & Measurement
 Objective performance measures
 Attendance: Subscriber attendance and single-ticket attendance
 Financial income: Total income, Net surplus/deficit
 Subjective performance measures: How well the theatres are doing compared to peers
 Firm resources: Seating capacity
 Product quality: Managers’ perception of the overall quality
 Strategic orientation and inter-functional coordination
Results:
Using Objective Performance Measures
Using Subjective Performance Measures
 Product orientation
 Product orientation
 Subscriber attendance: Marginally
 Subscriber attendance: Marginally
significant, positive effect
significant, positive effect
 Others: No effect
 Others: No effect
 Competitor orientation
 Competitor orientation
 Subscriber attendance & Single-ticket:
 Any: No effect
Positive effect
 Customer orientation
 Total income: No significant effect
 Subscriber attendance, financial
 Net surplus/deficit: Negative effect
performance: Negative
 Customer orientation
 Single-ticket: No effect
 Single-ticket: No effect
 Seating
 Subscriber attendance, total income,
 Any: No effect
net surplus/deficit: Negative effect
 Inter-functional coordination
 Seating
 Any: No effect
 Subscriber,
single-ticket,
net
surplus/deficit: Positive effect
 Quality
 Net surplus/deficit: Positive effect
 Others: No effect
Discussion:
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Customer orientation has a negative association with subjective and objective measures of subscriber
performance:


Theatre industry relies on the creation of completely new product to maintain and drive demand,
especially for repeat purchases
Theatre subscribers are the most frequent buyers
Interfunctional coordination:
1. Has a direct, positive effect on all objective performance measures
2. Moderate the relationship between strategic orientation and net surplus/deficit
Managerial Implications:
Art managers should:




Exercise caution in applying the marketing concept in general and a customer orientation in
particular
Cautioned that giving customers what they ask for might not be the only, or even the best,
approach to developing season programming.
Instead of a customer orientation, they might adopt a competitor orientation.
If choose customer orientation, may consider alternative programming and packaging decisions
Marketing department:


Be careful with market search
Develop strong relationships with loyal customers
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Article 2: Bhattacharya, C. B., Rao, H. and Glynn, M.A. (1995) - Understanding the Bond of
Identification: An Investigation of Its Correlates among Art Museum Members
Customers that are members of an art museum that they identify with, donate more money and visit
the museum more often.
Identification: the perceived oneness with or belongingness to an organization of which the person is a
member.


Propose customers, as members identify with organizations
They use social identity theory to propose and test a model that relates member’s identification
with the centre organization to:
1. Organizational and product characteristics
2. Members affiliation characteristics
3. Members activity characteristics
Survey findings: show that members identification is positively related to perceived organizational
prestige, donating activity, tenure of membership, visiting frequency and confirmation of member
expectations with the organization’s services.


Members participation in similar organizations is negatively related to identification with the
focal organization
Discuss how study can be extended to marketing contexts and how managers can use the notion
of identification in implementing marketing strategies
Themes of socially responsible buying. Corporate alliances with non-profits & cause related marketing.

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Underlying theme seems to be that these programs enable customers to identify with the
organizations
Ben and jerry’s actively support rainforest, Harley Davidson sponsors national events for nonprofits etc
They do this because the organizations enable consumers to identify with what the organization
represents
There are more direct strategies to ensure identification
Non-Profit entities like museums seek to build identification by drawing consumers “inside” by
making them members
Phenomenon of identification: when a person identifies with an organization, he or she feels
connected and defines him/her self in terms of organization
Identification: leads to decreased turnover and higher loyalty to organization
Identification w/ customer: higher word of mouth and brand loyalty increase
Identification differs from notions of brand loyalty
 Brand loyalty: deliberate prior tendency to purchase a brand, often stemming from positive
past experiences with its use
 Identification: tied to causes or goals that an organization embodies
When an org stands for a cause, consumers may be loyal to brand because they identify with the
missions of organization
Other people say: organizational identification is equivalent to organizational commitment
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 Other argue that identification is separate because identification is necessarily organization
specific and commitment is not
Natural marketing settings which are likely to facilitate organization identification:




Drawing consumers inside the organization as members is more viable way of building
identification
Creates sense of belonging
Setting: relates to the type of organization that is likely to foster membership & identification
Corporate membership programs: consumers must pay to be members in non-profits
Social identity theory and members identification :







Addition to a personal identity, the self-concept is also composed of a social identity
Personal identity: idiosyncratic characteristics: abilities and interests
Social identity: salient group classifications, based on demographic, gender or race
Classification: enables people to order the social environment and locate themselves within it
Social identification: perception of belonging to a group with the result that a person identifies
with that group
Identification enables person to partake in org
Organization identification: specific form in which person defines him or herself with terms of
membership in a org.
Identification and membership:
Social identification theory states that organization images are linked to member’s self-concept
and meant that organizational memberships can grant positive or negative attributes on a
member
 Satisfaction of organization, reputation and frequency of contact and visibility with organization
influence the members level of identification
 The members identification is set on three factors
 Organizational & product characteristics
 Affiliation characteristics
 Activity characteristics
Organizational and product characteristics:
 Factor that concerns members perceptions of the organization
 Identify strong if:
 Perceive organization to be more prestigious
 Satisfied with membership benefits offered by org.
o Satisfaction with institutions contributions is associated with identification
o Attainment of personal goals:
 Widening social network
 Personal enrichment & development
o More satisfied person is with offerings, greater the identification
 Hypothesis: perceived prestige is positively related to identification
 Consumers buy products to extend themselves & enhance self esteem
 Purchasing membership also is a way of extending self

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Affiliation characteristics:

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
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
Set of variables referring to characteristics of a person's membership
 Length of time someone's been a member
 Visibility of membership
 Number of similar organizations they patronize
Each of the variables likely be associated with intensity of identification with organization
Membership tenure will increase identification, over time the rate will decrease
The length of time a person is actively involved with an organization is positively related to
identification
Visibility of membership: Visibility associated with organization, more frequently reminded of
their membership
Use the social identity theory to suggest that people often retain multiple identities
Social identities not mutually exclusive
Number of organizations in same social classification can also have an effect on intensity at which
each person identifies with the organization.
Activity characteristics:
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People tend to choose activities that are congruent with the important aspects of their identities
and support those institutions that represent their identities
Persons identification level with a museum is likely to be related to set of behaviour patterns
Contact with and donation of money to organization
Identification is likely to be strongly associated with contact with organization
Greater contact = increases member’s readiness to categorize and define himself as a member of
that group
Members experience increasing contact, attractiveness of identity increases = increases
identification
Intensity of exposure with organization = positively related to identification
Donating: show links between identification levels  Donations are related to identification levels
Model is strictly correlational in nature
Recognize identification over time may also affect these variables
Greater identification, more likely satisfaction with products
Stronger identification may prompt people to prolong their tenure in org
Identification leads to visible membership
Identification can increase contact with organization and foster donations etc
Highly identified people: devote time and energy to organization
Discussion:


Do consumers in their role as members, identify with the focal organizations? Is such
identification systematically related to set of beliefs, attitudes and behaviours?
Suggest a positive response to both questions and point to implications to strengthen
understanding & management of the bond of identification
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Implications for marketing theory:



Purchases enables consumers to extend personal identities by incorporating intangible attributes
of the product into themselves
Membership is not only an acquisition that extends the self, but a relationship that extends a
person’s identity by enabling him or her to belong to an organization
Visiting other art places has negative effect on identification = suggest that identification is not
only a relationship between person and organization BUT a process that unfolds in a competitive
arena
Implications for marketing practices:
Most direct implication: members do identify with organizations; therefore, it may be worthwhile
for managers to think strategically about strengthening identification bond
 Importance for marketers and tactics for building identification among consumers who may not
be members
1. Managers should develop more focused communication strategies
 Membership application & renewal forms and brochures
 Organizations that have members who identify with them should
 Reinforce their mission
 That members support a socially worthwhile cause with their membership
 Creative explanation of intangible benefits
2. Managers strengthen identification by providing opportunities for contact
 Casual social events
3. Enhancing the prestige of the organizations & enabling members to fulfil their goals
 Focus on product offerings (events with celebrities)
4. Pricing
 Identification is positively related to visiting behaviour
 To improve the possibility of retaining members, managers can use different pricing options
Generic strategies to create identification:
1. Enhancing the prestige of the organization & enabling members to visit the museum or meet
socially can strength identification
2. Dedication to the customer:
 Strong and distinctive customer orientation
3. Customer support groups:
 Newsletter
 Events
4. Opportunities for public displays of association:
 Bumper stickers, t-shirts, merchandise, rainforest soaps (for non-profit causes)
5. Active alignment with and support of social causes
6. Distinctive human resource policies
 Ben and Jerry’s: provide employee benefits to unmarried couples and gay partners
 When publicized, create an attachment to company among a large target segment who
shares those values

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Article 3: Berger, J., Sorensen, A. T., and Rasmussen, S. J. (2010) - Positive Effects of Negative
Publicity: When negative reviews increase sales
Negative publicity has differential effects on established vs. unknown products. Empirical evidence
shows that negative reviews hurt book sales of well-known authors while it increased sales of books of
unknown author. The importance of publicity and the mediating role of awareness among (un)known
cultural products/producers is underscored
Is any publicity good publicity?


Negative publicity may have a positive effect by increasing product awareness or accessibility.
 Consideration sets help explain choice
 Consumers have finite attention – oversupply
 Top of mind
Regardless of valence, publicity (and potentially word of mouth) may have positive effects if it
makes consumers more aware or encourages the product to be top of mind
Name
Hypothesis
Results
Study 1: The  When awareness is high,  Positive reviews always increase sales
Role
of
negative reviews should hurt  The effect of negative reviews depended
Product
sales.
on whether the authors were new or well
Awareness
 When awareness is low,
established.
negative
reviews
should
 Negative reviews hurt sales of books
increase sales
by well-established authors
 Sleeper effect – source
 Negative reviews helped sales of
information may become
books by relatively unknown authors.
dissociated
from
the
message. Valence may be
forgotten but the feeling of
awareness stays.
Study
2:  When awareness is high, a
 Regardless of a delay, negative reviews
positive (negative) review
Underscorin
hurt the purchase likelihood of wellshould increase (decrease)
g
the
known products
important
purchase likelihood regardless
 The effect of a negative review became
role of time
of whether there is a delay
more positive over time for unknown
 When awareness is low, the
products
effect of positive (negative)
 Suggesting that while publicity
reviews dissipates over time
valence fades over time, increased
awareness may remain and boost
purchase likelihood.
Study
3:  Existing product awareness
 Compared to no publicity at all, the same
Increasing
should moderate the effect of a
negative review increased (decreased)
Product
negative review.
purchase likelihood depends on existing
Awareness
 Consistent
with
previous
awareness about the cultural product
studies,
negative
reviews
being reviewed.
should
hurt
purchase
 A
negative
review
decreased
likelihood of the well-known
purchase likelihood of a book that
product but boost purchase
was already well known,
likelihood when the product is
 A negative review increased purchase
unknown.
likelihood for a previously unknown
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

book.
For a product that was already well
known, publicity valence determines the
outcome.
 Publicity did not boost awareness, but
the valence of the review influenced
product evaluations and led people to
be more likely to purchase after a
positive rather than negative review.
For a product that was unknown
 Regardless of valence, product
awareness (and purchase likelihood)
increased.
o Affecting the consideration set
Summary:
Study
1: Study
2:
Empirical Experiment
analysis
Negative publicity hurt products with broad awareness On sales
On likely hood
& helped unknown products
to purchase
Review valence fades over time for unknown products
For unknown products negative reviews increase
purchase likelihood by making people more aware of
the product.
Study
3:
Experiment
On
likelihood to
purchase
Time is an Product
important
awareness
factor
mediates
between
negative
negative
publicity and
publicity and (likelihood
(likelihood of) of) purchase
purchase
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Article 4: Ezra W. Zuckerman, Tai-Toung Kim, Kalinda Ukanwa, and James von Rittmann (2003)
- Robust identities or nonentities? Typecasting in the feature film labour market
A simple or focused identity is advantageous because others can better estimate your “value” (and
typecast you accordingly). But a complex or unfocused identity offers more flexibility in your career
Typecasting (simple identities)


Dynamics:
 Employers consider (and hire) in a particular labour market category only candidates with
demonstrated competence.
 Employers avoid candidates who have demonstrated competences in other categories.
Risk to professional:
 Constraint in being prevented from moving from one category (role or genre) to another
Robust action (complex identities)


Robust action dynamics:
 Professionals (actors) can avoid typecasting by spreading work over multiple categories from
the outset.
 Professionals (actors) that remain unattached to any category are less likely to be labelled in
a way that limits market mobility
Risk to professional:
 Signalling to employers that they cannot do any category (role or genre) at an acceptable
level.
Typecasting arguments
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
Role characteristics: Does actor fit the age, gender and ethnic criteria?
Actor skills; Does the actor have experience in similar roles?
Consumer expectations: Will the audience accept this actor in that role?
Investor behaviour: Why would investors take the risk?
Typecasting and career age


The positive effect of typecasting on obtaining work in a particular category is greater (lower)
among new (veteran) actors.
 Typecasting is entry strategy for new actors
The negative effect of typecasting on obtaining work in other categories is greater (lower) among
veteran (new) actors.
 Veteran type cast actors can’t switch to other type roles
Conclusion



Actors as brands
Genres as market segments
Typecasting as market positioning
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Cultural Industries and Technological Change
Article 1: Papies, D. & van Heerde, H. J. - The Dynamic Interplay between Recorded Music and
Live Concerts: The Role of Piracy, Unbundling and Artist Characteristic
This article examines the dynamic interplay between the market for recorded music - which is under
pressure due to piracy and the unbundling of albums - and concert demand, and the moderating role
of technology.
Main finding:
 Piracy & unbundling weaken the effect of concert demand on record demand. (substitute whole
album by free or less costly alternatives).
 Artist’s fame is a double-edged sword. (famous artists: recordconcert=strong | concert 
record=weak).
 Music quality enhances the impact of concert on record demand.
Definitions:
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Cross-format elasticities: measures the responsiveness in the demand of one good when a change
(i.e., in technology) takes place in respect to consumption of another good
File sharing/ piracy: process by which individuals who do not own and have not purchased a
particular song or movie can nevertheless obtain that song or movie from unknown third parties
 "Peer-to-Peer Sharing" (P2P)
o Centralized:
 File listings on central server
 All peers connect to this server
o Decentralized:
 No central server
 Each nodes connects to many nodes (super peers)
o Unstructured:
 Nodes created arbitrarily
 Each node copies link information from connected nodes
o Structured:
 Uses algorithms to ensure connections between nodes
Unbundling: process where firms can offer individual products that were previously only (or
primarily) sold as part of bundles
 Ability to buy a whole or part of a product can increase adoption and revenue (e.g., cable TV
and Microsoft Office).
 But consumers purchase one or two songs from an album, whereas they used to buy the whole
thing.
 Classic bundling tactic -offering more songs for the same $9.99 price- does not increase an
album’s appeal over singles.
 The silver lining: Price increase for popular songs (to $1.29) doesn’t appear to have
negatively affected sales.
Multi-format goods: Share some attributes but differ on other ones, e.g.,:
 A key challenge: balancing the relationship between the formats to improve performance
across formats.
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o Reduce substitutes (e.g., paper book vs electronic book of the same novel)
o Improve complementarity (e.g., buy recorded music  listen to it  decide to attend the
concert (vice versa)
Hyptheses and Results:
Hypothesis
As piracy increases, the impact of concert demand
on record demand decreases.
As unbundling increases, the impact of concert
demand on record demand decreases.
The impact of concert demand on record demand
is stronger for music of higher quality.
The impact of record demand on concert demand
is stronger for music of higher quality.
The more famous the artist, the stronger the
impact of record demand on concert demand.
The more famous the artist, the weaker the
impact of concert demand on record demand.
Results
As piracy increases, the effect of concert on record
revenue becomes significantly weaker (-.118;
p<.05). This offers empirical support for the
expectation that the link between these two
formats has been weakened by file sharing.
As unbundling increases, the effect of concert on
record revenue becomes significantly weaker
(-.068; p<.05). This offers empirical support for
the expectation that the crossformat elasticity
from concert revenue to record revenue is
impeded by unbundling.
H3 suggests that the cross-format elasticity from
concert revenue to record revenue is enhanced by
music quality. The significant positive interaction
(.200; p<.05) supports this hypothesis.
H4 suggests that the cross-format elasticity of
record revenue to concert revenue is enhanced by
music quality. The significant positive interaction
(.018; p<.05), supports this hypothesis.
H5 suggests that cross-buying from records to
concerts may be stronger for more famous artists.
The results show a significant positive interaction
(.018; p<.05), in line with the prediction.
H6 suggests that cross-buying from concerts to
records may be less effective for more famous
artists. The results show that this part of the
spiral works significantly worse for more famous
artists (-.005; p<.05)
Insights on demand spirals:
Record→concert cross-format elasticity


No evidence that technological developments threatening this cross-format elasticity.
The more famous an artist, the stronger the record →concert cross-format elasticity.
Concert→record cross format elasticity

Fame weakens the concert→record cross-format effect, whereas music quality strengthens it.
Perhaps a lot of consumers own music of famous artists, explaining why cross-buy of the artists’ recorded
music after visiting a concert is less likely.

Correlation between fame and quality is weak
Perhaps creating high quality music is distinct from creating music that appeals to the masses
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Success breeds success:
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In general: Success on the record market  enhances concert revenue  enhance demand for the
focal artist’s recorded music.
Specifically:
 Cross-format effects operate at the margin: a marginal increase in the revenue of one format
enhances the revenue of the other format.
Threats to concert  record cross format elasticities: Piracy allows consumers to download
records illegally, weakening this cross-elasticity.
 Unbundling allows consumers to cherry pick the tracks they like the most
 The size of the effect is equally strong for piracy and unbundling
o Although piracy seems to be declining
o Effects of unbundling are same across observation period
Other insights:
 Giving concerts depends on artist’s fame
 Famous artists  concerts represent a core format to reap what has been sowed through selling
records and producing hits.
 Less famous artists  concerts represent a seed that can be harvested through selling records
 Record labels should try to control both record and concert deals (direct and indirect effects)
 Technology changes
 Piracy on the decline
 Rise of streaming services, which may further reduce cross format elasticities from concerts
 record sales
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Article 2: Elberse, A. - Should You Invest in Long Tail?
What is the impact of digitization and unlimited digital shelf space in the media industry on the
success of the blockbuster strategy?
Blockbuster strategy:

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

Time-honoured approach
Limited space on store shelves and in traditional distribution channels, retailers and distributors
seeking to maximize their returns, producers tend to focus their marketing resources on a small
number of likely best sellers.
Involves substantial risks  they expect that the occasional hit’s huge pay-off will cover the losses
of many misses
Still affective in the technology age?
 Yes: Broad, fast communication and easy replication create dynamics whereby popular
products become disproportionately profitable for suppliers, and customers become likelier to
converge in their tastes and buying habits.
1. Lesser talent is a poor substitute for greater talent  Even a tiny advantage over
competitors can be rewarded by an avalanche of market share.
2. People are inherently social, and therefore find value in listening to the same music and
watching the same movies as the others do.
3. When the marginal cost of reproducing and distributing products is low – as it certainly
is with goods that can be digitized – the cost advantage of a brisk seller is huge.
 No: Because of the “long tail” theory: now that consumers can find and afford products more
closely tailored to their individual tastes, they will migrate away from homogenized hits.
The Shape of Consumption
As demand shifts from off-line retailers with limited shelf space to online channels with much larger
assortments, is the tail of the sales distribution getting longer and fatter?





Sales did shift measurably into the tail: The number of titles that sold only a few copies almost
doubled for any given week from 2000 to 2005.
The number of titles with no sales at all in a given week quadruple  Tail represents a rapidly
increasing number of titles that sell very rarely or never.
Not simply a function of the sharp increase in the number of titles  Long tail is true.
Differentiate between artists on smaller, independent labels and those on major labels: the former
gains some market share at the tail end of the curve as the result of the shift to digital markets.
Move up the curve: Independent artists have actually lost share among the more popular titles to
superstar artists on the major labels.
A Taste for Obscurity?

Vital for marketers to understand who is responsible for the growing volume of business in the
tail.
 Is it a small group of fanatics driving the demand for obscure products?  Unlikely that a
truly significant shift in media consumption will take place
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 Is it a large number of consumers regularly venturing into the long tail?  Important to
gauge the size of their appetite for those products and the degree of their satisfaction
 Still in the “water cooler era”
1. A disproportionately large share of the audience for popular products consists of relatively light
consumers, whereas a disproportionately large share of the audience for obscure products
consists of relatively heavy consumers.
2. Consumers of obscure products generally appreciate them less than they do popular products.
Is most of the business in the long tail being generated by a bunch of iconoclasts determined to march to
different drummers? No


Large number of customers occasionally select obscure offerings that, given their consumption
rank and the average assortment size of off-line retailers, are probably not available in brick-andmortar stores.
Consumers of the most obscure content are also buying the hits.
 Finding from the transaction data:
There is no segment with a particular taste for the obscure; rather, customers with a large
capacity for content venture into the tail.
 Light consumers concentrate largely on the hit products
 Consumers give disproportionately low ratings to obscure products, but they also give
disproportionately high ratings to hits
 Consumption of long-tail offerings is more prevalent among people who tend to stick to a genre
 It would be imprudent for companies to upend traditional practice and focus on the demand for
obscure products
Advice to Producers
1. Don’t radically alter blockbuster resource-allocation or product-portfolio management
strategies. A few winners will still go a long way – probably even further than before.
 Tail is long and flat  Content providers will find it hard to profit much from it.
2. When producing niche goods for the tail end of the distribution, keep costs as low as possible.
Your odds of success aren’t favourable here either, and they will probably become less so.
 The extremely low demand for the large array of products in the tail means that simply
recovering the costs of producing them will be challenging.
3. When trying to strengthen your presence in digital channels, focus on marketing your most
popular products.
 They reach the largest number of customers, and they are also appreciated more by those who
consume them.
4. Leverage your scale to improve online exposure and demand for products across your product
portfolio. Again, hit products play a key role here.
 Old hits may present a new opportunity because they can exist forever online without being on the
physical shelves anymore.

Advice to Retailers
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1. If the goal is to cater to your heavy customers, broaden your assortment with more niche
products
 Customers want a wide assortment, so offering one helps attract and retain them, whether they
pay by the product or for a subscription.
2. Strictly manage the costs of offering products that will rarely sell. If possible, use online networks
to construct creative models in which you incur no costs unless the customer actually initiates a
transaction.
 Long-tail products may offer more attractive profit margins for retailers than hit products do
 BUT extremely low demand for long-tail products, coupled with whatever it costs to make them
available, presents difficulties in successfully executing a long-tail model.
3. Acquire and manage customers by using your most popular products
 Because hit products reach the greatest number of consumers and are appreciated most, their
value as loss leaders in traditional channels will carry over into the digital realm.
4. Even though obscure products may have a higher profit margin, resist the temptation to direct
customers to the tail too often, or you’ll risk their dissatisfaction.
 Finding a good marketing balance between obscure and popular products is critical.
Who Will Prosper?


Chris Anderson: The companies that will prosper will be those that switch out of lowest-commondenominator mode and figure out how to address niches”.
Paper: The tail is likely to be extremely flat and populated by titles that are mostly a diversion for
consumers whose appetite for true blockbusters continues to grow.
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Article 3: Salganik, M. J. and Watts, D. J. (2009) - Web-based Experiments for the Study of
Collective Social Dynamics in Cultural Markets
How do individual behavioral tendencies lead to collective social dynamics in large groups of people
interacting over time (the case of music downloads of new bands).
Too many cultural products in market → consumers use perceptions of popularity as a signal of quality.
Benefitting from coordinating choices – common interests leads to community formation.
Preferences are not stable but constructed. Influenced by:
1. Observed actions of others
2. Psychological features of decision context.
1. Conclusions experiment:
1. Unpredictability of success is greater in social influence condition
2. It is easier to predict failure than success measured as appeal based on downloads in the
independent world
3. More unpredictable for higher appeal songs than for lower appeal
Understanding how individual behavioural tendencies lead to collective social dynamics in large groups
of people interacting over time. THE ROLE OF SOCIAL INFLUENCE


Individuals have been found to anchor their valuation of objects based on irrelevant and even
false information
 Even though the individual psychology of anchoring has been studied extensively, it offers us
the wrong prediction about the collective social dynamics of auctions
It is difficult to predict the behaviour of systems with many interacting components → hard to
reduce group behaviour to individual psychology
2. Success and failure in cultural markets
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Success in markets for cultural products is tremendously unequal
Generally, the cost of consuming cultural products is generally unrelated to their quality: going to
the movies to see Harry Potter is the same price as for any other film in the movies
Cultural markets are also highly unpredictable “nobody knows anything”
If hits are different in some way, why do experts have such difficulty in identifying these products
ahead of time? Rather than looking for an explanation of this puzzle at the level of the individual
—either industry executives or consumers—we will argue that the inequality and
unpredictability of success, both group-level properties, arise from a process of social influence at
the individual level.
Going away from the assumption of exogenous and stable preferences (rational models of human
behaviour, models of cultural markets) → preferences are neither exogenous nor stable but are in
fact “constructed” by a variety of features of the decision context itself.
The constructed preferences-view is added together with the social component (expressed
preferences are influenced by the observed actions of others as well as psychological features of
decision context (such as framing, anchoring and availability).
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3. Social influence and cumulative advantage:
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The interdependence of decision making and more specifically, the processes of social influence
and conformity has been studied extensively:
 2 broad insights that are relevant to social influence in cultural markets
o There are simply way too many products for individuals to consider: to deal with this
overload it is natural to assume that the popularity of products is somehow a sign of their
quality (observation learning)
o People may benefit from coordinating their choices with others: by engaging with the
same content they can construct common points of interest around which they can
interact, thereby fostering notions of commonality and community.
 A range of models have been proposed due to these assumptions that produce
o A highly skewed distribution of outcomes
o Unpredictability due to path dependence effects in which initially indistinguishable states
can “lock in” to very different equilibria
→ The puzzling nature of success in cultural markets could follow naturally from the process of social
influence at the individual level
4. Experimental design
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Basic framework used: an artificial cultural market in the form of a website where participants
could listen to, rate and download 48 songs by unknown bands
Participants were either assigned to independent condition (no information about the behaviours
of others) or the social influence condition within which they were assigned to a specific “world”
(they only knew about the behaviours of people in their own world)
They were told that they were participating in study of music tastes and after a chance to
download music by up-and-coming artists
Social influence participants saw a number of previous downloads in their worlds next to the
songs
5. Previous results
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Studies on US teenagers:
Popularity of the songs affected participants’ choices and generally led them to listen to more
popular songs
Social influence at the individual level is simultaneously responsible for increased inequality and
unpredictability in collective outcomes
6. Predicting success
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Predicting outcomes requires one to understand not only the distribution of individual
preferences in the target population but also intuitively how all those preferences will aggregate
when everyone is also paying attention to what other people are doing
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How much can one learn from the results of one experiment that could be applied to another?
This question has a practical analog in business. For example, it is often the case that an executive
contemplating the launch of an object X (e.g., a book or a TV show) in market B can observe the
success of the same object in some other market A in which it was launched previously. Given that
the two markets are presumably characterized by different distributions of preferences, the
question, then, is how much weight should the executive place on X’s success in market A relative
to his ⁄ her own premarket audience testing in market B?
Even knowing the full distribution of popularity in the independent condition is therefore of
limited value to someone attempting to predict outcomes in the presence of social influence—a
result consistent with our general claim that some portion of the unpredictability of market
success cannot be eliminated, even with perfect information about the pre-existing preferences of
individuals.
If we consider the outcomes of a social influence world to be noisily related to appeal, then it
stands to reason that one noisy outcome cannot predict another noisy outcome, especially when
the underlying signal itself may be changing. We hope that future modelling or experiments will
address these issues in more detail
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Article 4: Jenner, M (2017) - Binge-watching: Video-on-demand, quality TV and mainstreaming
fandom
Binge watching is associated with fan practices, industry practice and linked to ‘cult’ and ‘quality’ of
content in the contemporary media landscape. Technological developments (e.g., VOD) are changing
how consumers spend their leisure time by constructing binge-watching as an alternative.
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Explores concept of the binge as viewing protocol associated with fan practices, industry practices
and linked to “cult” and “quality”
Intersection of discourses of industry, audience and text
Shaped by range of issues dominate the contemporary media landscape
VOD: video on demand
Binge watching: reaches beyond assumed or actual viewing behaviour
Concept of binge watching is understood as discursive formation or an intersection of a variety of
discourses
Study focuses on discourses of industry, text and audience, and focuses on figure of the fan and the
mainstreaming of fandom rather than empirical audience research
Serves interests of the emerging VOD industry
 Especially Netflix, Amazon and Hulu
 “Cult” and “quality” as encouraging and rewarding binge watching through textual strategies
 Legitimise the viewing practice
 Socially acceptable to binge rather than watch several hours of scheduled TV
Focused attention to these texts is associated with fan behaviour
Fan studies = conceptualise binge watching
Fan studies = approach to understand the somehow excessive audience text relationship implied
in the term binge  Not suggested that binge watching & fandom go hand in hand
The VOD Industry and “Binge Model”
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A binge = excessive behaviour that deviates from the norm
 Shameful indulgence and lack of control
Tv in the convergence era has seen significant improvement in its place on the cultural hierarchy
Binge watching came with the “rise “of the DVD box set
Linked to a rise in DVD sales of serialised content
Important aspect he describes is the idea of excess, what Ramsay calls “shameful indulgence”
Guilt about “wasting time” diminished social interaction
Term “excess: used to describe the guilt, used to account for the idea that the number of episodes
watched exceeded the norm
Not experienced as negative
Any amount of binge watching is dependent on highly individualised viewing behaviour
Difficult to pin down term’s “norm” and excess but excess of a binge exceeds the “ration” scheduled
tv offers
A binge suggests consecutive watching of several episodes of one series uninterrupted
“Excessively” close relationship with text
Highlights that binge watching is decidedly different from following tv flow where more than one
programme is watched
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DVD sets: important factor in determining excess may also be anticipation and monetary value of
the commodity in relation to the time needed to consume it
Wait a long time to see for it to come out and they pay a high price, watching a whole DVD box set
in 1 sitting might contribute to subjective feeling of excess
Waiting periods remain with VOD, but expense is lower
Necessity to self-schedule, which may very well involve excess of binge-watching
Key factor: viewing is autonomously scheduled: control over one’s own viewing behaviour is only
possible because control over scheduling, is in hands of broadcaster.
Binge-watching suggests an entirely different media experience than “traditional”, scheduled
television can offer.
Netflix builds on developments of a television landscape of late 1990’s and early 200’s where HBO
positioned itself as setting “quality” standards
VOD cuts out period where audience have to wait for a season to be shown weekly.
Netflix offers personalised recommendations but binge watching is also part of strategy
 Netflix offer content that keeps watchers, watching continuously. They become less likely to
cancel subscription if they are binge watching
 Crucial business strategy for Netflix
 The fewer episodes viewers have to watch to take part in the cultural “trend” of binging the
longer they will remain customers
 Amazon and HULU are using the same strategy now “first three episodes will be available for
free for all amazon customers & then available to prime users after”. Prime users spend 150%
more on site after joining
 Risks for Amazon adopting this strategy:
o Hopes release schedule will fuel more social media chatter about tv shows
o But Netflix model is criticized when they release a whole season as people chatter about
it on social media and spoil it for others
o Could encourage customers to binge watch a season and cancel subscription
 Netflix’s model of combining binge model + personalised recommendations, (which has been
part of amazon for ages) has become default model for VOD content
 Consequence of Netflix’s history as online based DVD rental store
 Severe losses Netflix took when publication for a show did not meet expectation in numbers of
subscribers, indicated that Netflix and amazon and Hulu stock is likely to react sensitively
 House of cards, Orange new black = social media buzz and WOM and combination with binge
model means that viewing numbers after publication may be less relevant for VOD than for tv
Success of binge model has to do with the fact that new tech allows for the viewing of texts
without interruption or pollution by adverts
What drives binge watching: serial form combined with tech that allows viewers to decide what
to watch and avoiding ads
The links the concept of binge watching has with media forms are associated with self-scheduling
 Autonomous viewership is key aspect of binge watching
 Important: concept intrinsically linked to an autonomous scheduling and time shifting
technologies
 Important to differentiate between catch up services and apps that offer more content and
series like Netflix original
 Catch up services: only provide limited number of episodes and only available after they air
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Ad breaks included and branding infrastructure of tv channels are kept
Catch up services; time shifting technologies
But VOD allowing consumption of crystallized tv (free of ads)
Netflix has personalised recommendation - based on viewing choices but also specific
characters in those favourite tv shows = fandom
 Result of a careful system that rates attributes in films and viewing behaviour of individual:
o Netflix capture dozens of different movie attributes
o Rate moral status of characters
o When tags are combined with viewers habits = they become Netflix competitive
advantage
o Main goal: gain and retain subscribers
o Genres that it displays to people are key part of strategy
o The better Netflix knows you, the more likely you'll stay
Viewing can be organised around personal schedules or mood
Scheduled tv does not allow this
Important to bear in mind this tension between autonomy and interface
But also suggests how central binge watching is to VOD companies as publication model
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Quality TV as bingeable texts:
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Another aspect of binge-watching is the text
Term linked to certain kind of text that encourages this
The fact that a series is published on DVD seems to suggest a certain cultural value
Not only are texts chosen to be published but viewing protocols implied in DVD form are accepted
by right holders
Binging associated with “quality” or “cult” texts
Escaped the low culture associations of tv, through their binge worthiness
Due to particular complex narrative structures, which are part of an invitation to viewers
Invitation: careless, operating at a primary aesthetic level.
“Quality” and “bingeable” are often consciously constructed as aligning with middle class taste
structure
Bingeable texts have extraordinary narrative structure = highbrow literature
Cultural credence (belief) text like Wire, is invested with and the kind of viewer attention it
demands, points to another important aspect: “texts” seek to appeal to the structures of a taste of
a middle class “quality demographic”
 Young, affluent viewers with money to spend and with the cultural capital that translates into
recognition by industry tastemakers with Emmy and other prestige awards
Aspect is important for subscription-based VOD services of amazon
They rely on audiences who can afford subscriptions and own tech to consume it
Social media buzz and propaganda
The deferred narrative may also explain why texts that were cancelled before central enigmas
could be resolved.
Difficult to put label on “cult”
Major disparity between two categories of “cult” and “quality” TV seems to be comparisons to
“high art”
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Categories need to be viewed as not always separate
Neither one is exclusively defined through text, rather they are discursively produced, fluid,
flexible and overlapping
Texts need to reward attentive, autonomously scheduled viewing and are invested with more
cultural credence than most tv
Binge Watching seems less associated with the low brow medium of tv
Implies a deliberate choice of watching serialised “quality” content
“Shameful” indulgence seems less the viewing of a specific test
Fans, non-fans and binge watching
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A binge rewards attentive viewing, not only viewing of excessive amounts of episodes but
somehow excessive audience-text relationship
Intensity of the experience that is a deciding factor
Focus demanded by these quality and cult texts may not be necessary or wanted with other TV
formats
Audience - text closeness = factor of fandom
Being part of fandom cult means being able to attempt to account for and depends one’s fan
passions
Implies: close audience - text relationship that enables viewers to interpret and think about a text
Arguing for an understanding of fandom less dominated by the high/low culture binary
The practice of binge watching equally encourages non-fans to be “temporarily moved” by a text
“Non-fan” = includes those who are generally unaware and uninterested in popular culture
alongside those who regularly watch VOD but are “temporarily moved” and reject fan labels
Viewed as occupying an in between space between non-fan and fan
Current media and social media environment strongly encourage fan like behaviour and make it
easier to participate
Binge watching a series does not make it part of one’s self identity
Some non-fans take part in some fan practices like buying a mug etc
Practice of binge watching though rooted in fandom is not exclusive to fan practices
VOD encourages fan behaviour in non-fans
Blurred lines between fans and non-fans, quality and cult and low culture tv and high culture
serialised drama is exploited by VOD through the concept of the binge
Binge watching = implicit and explicit participation
Explicit: driven by motivation
Implicit: channelled by design, by means of easy to use interfaces, and automation of user activity
processes
Posting and social media doesn’t need to be implicit
Participation can be formalised as a default design that unfolds as an implicit activity (related to
the internet and World Wide Web)
Example: social media but also sharing of drop box folder containing content
 Consumption of serialised content on VOD is not participation itself but commenting on
content is
 Enables participation, also enables viewers to participate explicit and implicit in social
phenomena by allowing viewers to catch up on discussed dramas
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 Binge watching and tech that supports it thus needs to be viewed as an important aspect of
how fan practices, participation and textual production are moved into a “mainstream”
culture
 Blurring of boundaries may be linked to the fact that, the once marginalised figure of the fan
has been accepted into the “mainstream” and fan practices are being framed and redefined
 DVD culture supports this via the gateway of “quality” TV non-fans have been encouraged to
participate in fan or at least fan like behaviour
 Increasing proliferation of digital tech within everyday life is further blurring the boundaries
between cult and mainstream
 Internet massively increases the public presence of film fans, many of whom leave online
traces
 Moving away from the object of DVD, VOD has removed some material that might appeal to
fans, bloopers, commentary
 Does Not provide prized object of the DVD to display on a shelf
 Slims down the medium of the DVD to offer a text without ads
 Offers an opportunity to non-fans to adopt the viewing protocol without adopting another fan
behaviour
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Cultural Industries & Competitive Processes
Article 1: Crane, D. (1997) - Globalization, Organization Size, and Innovation in the French
Luxury Fashion Industry: Production of Culture Theory Revisited
Market dominated by large conglomerates using “name designers” as brand names. Globalization
inhibits new entry by smaller producers. Innovation mainly by wellfunded foreign (=non-French) firms.
According to production of culture theory, small organizations are more likely to produce
innovative cultural products than large organizations
 Large organizations constitute oligopolies that control their markets and remain innovative by
co-opting smaller organizations, along with their creative talent.
 Study of French luxury fashion market shows that a few large companies controlled by
conglomerates dominate the market in terms of sales but have little influence on styles.
 Large firms use the myth of the designer as artist and connoisseur to enhance the saleability
of products other than clothes.
 The increased cost of entry for new firms due to globalization of markets, inhibits their capacity
for innovation and survival.
 Production theory focuses on the effects of different types of organizational structure and
different types of markets on the diversity and range of cultural products.
 Production of culture theorists show hat culture industries are generally dominated by a few
large firms that control a large proportion of the market.
 There is a high level of competition but each member has little incentive to innovate.
 Prefer to avoid the risks associated with stylistic innovation and to capitalize on stylistic
innovations developed by small firms.
 The size of a culture organization has important implications for the level of innovation.
 In industries where a high level of investment, large culture organizations are likely to have
an advantage in the development of new and spectacular techniques.
 Two factors that affect the behavior of organizations that produce culture have become
increasingly important:
1. Ownership of culture organizations by conglomerates, companies whose major activity consists in
buying and selling other companies
2. Globalization of markets for cultural products.
 Hypothesis: Globalization greatly increases the costs to new firms of entering markets for
cultural products and decreases their chances of survival.
 In culture industries in which new small firms are more likely to have innovative products than
big firms, these changes have implications for the level of innovation.
 Brittain and Freeman's interpretation of fashion markets implies a particular type of market for
fashion products in which fashionable items are produced cheaply, sold rapidly, and quickly
replaced by new items.
 Haute couture:
o Couturiers who designed and made clothes which were sold straight to the clients 1920.
o Industrial firms whose products were sold in department stores.
 Couture firms are ones who set the style which are then copied by the clothing industry.
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 Today, haute couture sells ready to wear and made to order clothes along with other luxury
brands.
 Luxury ready to wear: is expansion in French clothing industry during 1960s provided
opportunities for designers to find firms to manufacture and sell their designs as ready to
wear clothing
 Youth market: small entrepreneurs copying designs of couturiers.
French industry is unique because it emphasis placed on couture, made to order clothing.
 In countries with sizable luxury brands eg. United States, Japan, England or Italy would only
exceptionally do made to order.
 In the study business strategy, globalisation and entry costs were compared within the
industry, these hypothesis have come up:
Firms in industry resemble firms in other culture industries in terms of business strategy and
attitudes toward innovation. Being in favor of profits over originality. High rates of survival have
accelerated due to firms taking over by corporations.
Few successful conglomerates (corporations) -owned firms function as oligopolies, as seen in their
dominant share of annual sales.
As in other culture industries, large firms attempt to capitalise on the innovative capacities of
small and medium-size firms by hiring their designers who tend to be in closer tough with the
market.
Globalisation of markets for French fashion industry has let enormous increases in costs of
entering these markets that has in turn affected the capacity of new firms to enter business.
Oligopolization of industry and globalisation of market have created a situation in which small
firms/organisations are less likely to be recognised as innovative by fashion experts while large
firms are able to survive with a low level of product innovation.
Post war french haute couture represented a new type of fashion organisation that relied on
financial expertise.
Pre-war couture had a more stable clientele base.
Most designers got their reputation through specific type of fashion innovation.
New type of post war firms (eg. Dior) associated with financial partner and not owner.
 Dior’s innovation which was important in business strategy was product licensing.
 In 1960 market for made-to-order declined due to licensing
 By 1970 product licensing and perfumes were major source of profit for firms.
Clothing styles were primarily used to create a prestigious image for company that enhanced the
saleability of other types of products - eg. perfume.
Haute couture now represents 5-10% of annual sales.
Couture business are barely owned by founding family.
The industry constitutes an oligopoly that the couture businesses changed is indicated by the
pattern of entries and exits before and after WWII.
After 1970s cost of entry escalated due in the postwars period - new fashion organisation brought
greater profits → due to exploitation of license and expansion of global markets as well as
stability to luxura fashion industry.
At the same time: globalisation of market has greatly increased the costs of entering this market
(fashion industry) providing a substantial advantage for gathered ownership and inhibiting the
entry of new small firms.
Majority of ready to wear designers firms are smaller than haute couture firms.
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 Aspiring designers began to create ready to wear clothing in 60s and moved to higher pricing
markets niches with higher profits.
 Mid 60/70s new designers were able to start businesses with small investments from personal
funds but that is not so common today → generally, firms are unable to expand unless they
sign license agreement with industrial clothing firms or find sponsors for their start.
 The rate of growth for new designers has decreased due to higher entry costs.
Size of a designer firm is an indication of business strategy:
 The larger the firm, the more likely to be owned by corporation/organisation and have
diversified their activities.
 License and perfume.
Activities of smaller firms are more likely to be focused on clothing design itself: Their designers
tend to be in closer touch with younger age groups in the public and can be more innovative.
Haute couture firms had expanded and diversified their activities to the extend that haute couture
had become minor aspect of their activities.
New firms face difficulties in achieving recognition by fashion experts - the relationship gap of
firm and innovation also changed.
This study has shown that there are several fashion markets
 Each of which provides different levels of opportunity:
o The classic fashion market is characterised by
small firms
local markets
low costs of entry
high level of demand for low priced clothing item
 Haute couture is characterised by
primarily local markets
low to moderate costs of entry
high priced items of clothing for which the level of demand is very small
additional products.
Globalisation of luxury fashion market that has led to high entry cost for both fashion markets has
created a situation that amounts to restricted entry in the French luxury fashion industry.
Same conditions that have led to restricted entry of new firms have created a situation in which it
is very difficult for new, small firms to receive recognition for their innovation from fashion
experts.
Small firms may actually be less innovative since their precarious financial situation precludes
experimentation.
Since new small firms are often an important source of innovation in culture industries, factors
that impede the recognition and dissemination of their innovations are likely to have serious
consequences for the health of the industry.
Article 2: Franssen, T. and Kuipers, G. (2013) - Coping with uncertainty, abundance and strife:
Decision – making processes of Dutch acquisition editors in the global market for translations
Editors select titles for translation that are published by successful foreign publishers that look like
their own publishing houses, and titles that look like the books they are already publishing.
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Analyzes the decision making processes of Dutch editors involved in the acquisition of translation
rights
Mapping the Dutch literary field, revealing three broad types of publishers
Uncertainty about the nature, quality, and marketability of these books
Fierce competition for the “best” new titles & the reality that only a small fraction of published
books prove to be successful
Uncertainty growing because of increasing globalization
Translations make up growing share of all published books
Increasingly concerned with the acquisition of these rights - the right to publish a book in a
particular language area
Global production is growing = more diversity in books available → making harder to establish
quality and audience
National literary fields have become more competitive due to the increasing commercialization of
the publishing business
Competition in “transnational” literary field has increased
Investigate how editors decide which books to buy in the global market for translations
How do they find interesting enw books? What criteria do they use to judge a book? How is this
acquisition process organized? How do they cope with uncertainties that are inherent to the field?
Production of culture approach: combines insights from Bourdieusian field theory with neoinstitutional theory in sociology
Decision making and cultural production in the transnational field
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Acquisition editors: occupy “boundary spanning”
 Mediate between producers, such as their own publishing firm and consumers in “outside
world”
 Bridge boundary between creative and managerial branches
 Editors buying translation rights = have different boundary (national and transnational
literary fields)
Production of culture: applied insights from economic and organizational sociology to the
production of cultural products
Gatekeeping: draw on insights from two theoretical perspectives that are commonly employed in
production of culture studies (neo institutional theory and Bourdieusian theory)
 Theoretical perspectives originated on two different continents:
 Share many assumptions
 The perspectives grew closer when neo institutionalists became more interested in
heterogeneity and power in cultural fields
 Both perspectives: actors and practices seen as embedded and constrained by the
organizational field
 Neo institutionalists see actors worldview as the mediator between field and practice  In
field theory, the mediating mechanism between field structure and actors actions is the
habitus, a disposition of sorts
In common: cultural production can be studied through lens of organizational practices
Org. practices emerge in response to specific challenges: Networked structure of gatekeeping
process under scrutiny: shape various organizational outcomes
Uncertainty = central problem
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Value and quality of cultural products is hard to gauge or foretel, because they are produced in a
collective process
Specialized professionals (gatekeeping) needed to establish a cultural product’s worth and
potential
Individual and organizational practices = response to this value certainty
Important strategy for reducing uncertainty= limitation of organizational practices and routines,
actors in same org field look to others for confirmation and inspiration (NEO)
Bourdieusian field theory: competition emerges as the central problem. Conflict becomes central
structuring mechanism of cultural fields
Decision making in cultural production can be guided by “highbrow” logic of the “field of
restricted production” or the “popular” commercial logic of the “field of large scale cultural
production”
 Organizations, people and products each occupy a position in this cultural field
o One determined by the amount & nature (symbolic and economic) of their respective
capital
o Each position comes with aesthetic dispositions embodied in the habitus
o Criticized element of the theory: assumption that all actors are locked in a “classification
struggle” striving to dominate the field
o Decisions are expected to occur rather spontaneously, informed by the “magic of the
field” that erases uncertainties
Using both theories becomes apparent in light of a challenge
 Challenge: overabundance of new manuscripts available from the 1980s on ward
o Vexing our informants, because it intensifies both uncertainty and competition
o Diverse offerings, value becomes ever harder to establish (increases uncertainty)
o Global translation system is shaped by global competition - very competitive struggle
emphasized by field theorists
o Leads to growing power of american fiction and the pushing of Anglo-American fare into
national markets, as well as to the increasing dominance of the commercial logic in
national literary fields
Analysis of editorial decision making process combines insights from neo-institutional and field
theorists
Aspects of the gatekeeping process may be better understood through neo institutional insights
(development of routines and institutional innovations to control uncertainty
Practices of cultural professionals are guided by different logics in different stages of the decision
making process
Case, data, methods
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Dutch litery field: good case to study national and transnational literary fields
Highly internationalized, nearly 30% of all books are translations
Discussed debut authors: the acquisition of debuts is risky investment that requires thorough
justification
Analyzed field in which contemporary Dutch editors make their decisions
Editors and acquisition process; decision making in context
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Editors are main gatekeepers in the acquisition process and the only ones involved in all stages of
decision making
Boundary spanning function between managerial and creative branches in their publishing house
Process structures similarly for all publishing houses
Editors encounter same problems in each stage of decision making process - although differ in
types & extent of resources
Problems editors face:
Oversupply of manuscript, have to read too many don't get the time to read all, they rely on others
for information gathering  Literary scouts: important for new manuscripts and information
 Scouts send daily or weekly reports listing all rights on the markets
 Expensive, rely on networks
 Network of dutch editors are not static and unchanging, the increasing professionalization of
networks doesn't only affect the decision making process but dutch literary field
 Increasing reliance on scouts = self reinforcing process of dependence on translations from
English
 Organizational innovation of hiring scouts = tackle uncertainty, abundance, and competition in
the Dutch literary field has affected literary output = increasing orientation towards the global
centers
 Increasing focus on Anglo-American market = increased competition between dutch publishers
 Impact of innovative institutional practices on organizational outcomes
 Highlight how reorientation in national field towards the global centers while reflecting the
power structure of the cultural world system is mediated by meso level arrangements among
field organizations
Positioning a manuscript:
 Editors assess the quality and importance of info bases on their trust in the competence of the
agens
 They read the manuscripts, uncertainty remains about quality and chance of success
 Competition is intense as least attractive books are filtered out
 Not feasible to read every manuscript so they position it in the literary field, on basis of own
knowledge of transnational field
 Look at the genre, author and story line as well as publish selling rights
 Evaluate a given manuscript
 Process of deciding what to read requires knowledge of history and structure
 Look at how many countries it has been sold to and what publishers
 Learning process involves both cultural and social capital
 Accumulating specialized and validated knowledge and creating a network of helpful
connections gives acquisition editors the expertise to place successfully a manuscript
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The work of expertise:
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Stage where they reject or ignore most of potential books on market
Moment that editors have to decide about quality; the most uncertain aspect of production
Use explicit criteria: feel a “connection” intuitive and emotional terms
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Supports the Bourdieusian understanding of taste as embodied and as learned by doing and
training
Conservation vs innovation, conservation: an object is judged on basis of an ideal version
 Repertoire leads editors to search for superior examples of what is already there and to strike
a good balance between innovation and recognition
 Business strategy of risk avoidance
 Conservation is also a response to uncertainty
Innovation: implied heightened risk: looking for what is new and accepting failure
Standardization of genre fiction makes quality assessment easier
Division between literary and genre fiction corresponds to the way editors talk about their own
taste and signals a longer and deeper relationship with literary fiction rather than with genre
fiction
Distinction between thinking and feeling = mirror the opposition between art and commerce
central to field theoretical understandings of cultural production
Commerciality
 Most editors buy books that they will expect not to break even
 Direct expectation of profit is not necessary for buying a book
Gatekeeping process differs from others: the main problem = uncertainty, while abundance and
competition fade in the back
 Abundance = solved by filtering
 Competition is momentary, and important when the bidding must be done
 Expertise is strongly shaped by their position i the field
The legitimation of editorial choices: process is the editorial board meeting
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Existence of these meetings as a shift from editorial logic to market logic
Use various rhetorical strategies to construct a story for the editorial meeting that legitimate
their decision to publish a book
Genre, reputation and imitation & innovation are important strategies & the “fit’ of the book with
the publishers
Serve to convince important people of a products quality
Rationalize and legitimate the reasons to convince the board
Competing with national rivals:
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Publisher calls the rights to make an offer, competition is the main challenge here
Auction: you bid on the book
English language books: competition may be intense
Competition within national field looks different
Dutch literary field is build around different subfields
Mainstream niches and smaller niches like poetry
The dutch literary field emerges rather as a segmented field with many niches
Increasing segmentation of the field is propelled by growing globalization
The publishers catalogue: isomorphism and symbolic capital in the transnational field
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Fit of a certain catalogue is important argument, because it safeguards company’s identity and
image
Coherent catalogue: necessary to create trust in the taste of an editor and to work in the field
Push towards transnational isomorphism is set in motion in earliest stages
First stages: acquiring editors look to colleagues in foreign companies
Editors look to colleagues in the transnational field to help cope with the abundance of
manuscripts and to gauge their potential
Networks are fostered by institutions like book fairs and actively sought after by increasing
isomorphism, creating growing homologies between national fields
Transnational isomorphism matters in the later stages
Important way to do this is to position the book transnationally by pointing to publishers in other
countries with similar catalogues
Conventions and cultural products moving form one literary field to another, the structure of field
is becoming more similar between nations
Provide symbolic capital in national and transnational fields: the catalogue is used as a
presentation of self
A coherent catalogue is important for sales agents to understands the identity fo the publishing
house
Consumers are not central in acquisition decisions
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Article 3: Gemser, G., Leenders, M.A.A.M and Wijnberg, N.M. (2008) - Why some Awards are more
Effective Signals of Quality than Others: A Study of Movie Awards
Awards have more effect on performance if the jury consists of selectors of the same type as the
dominant selector in the market
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Overall, their results suggest that awards granted by a jury composed primarily of end consumers,
peers, or experts each have a different effect on consumer behavior, which can be explained in
terms of differences in source credibility and award salience. (In marketing, the concept of
salience is commonly used to refer to the prominence or “level of activation” of a brand in a
consumer’s memory)
Awards help consumers and other actors in the value system in their product selection process.
The role of awards as a signaling device seems particularly important in the cultural industries,
where the actual quality of products is often difficult to determine prior to consumption
Only few studies have examined the differences in impact of various types of awards
The composition of the jury selecting the award winners to be an important determinant of an
award’s effectiveness
Consumers will have to view a movie themselves to be sure whether they like it, and they will not
get a refund if the movie does not meet their expectations. This increases the importance of
signals of quality that consumers can take into account in their decision whether or not to view a
particular movie.
Attribution theory suggests that in their decision-making process, consumers do not simply accept
signals of quality with blind faith but attempt to assess for themselves whether the source of the
cue is credible or not. → low-credibility sources are given less weight
This study had high source credibility (consumers, experts or peers)
expert-selected awards are the most effective in the independent film segment, just as we
hypothesized.
Consumer-selected awards are, irrespective of the type of film involved, not significantly more
effective than other types of awards,
Strong social interaction among consumers generates “herd behavior”—where a consumer’s
decisionmaking process is highly influenced by the opinions and actions of others—and
consequently creates inequality and unpredictability of market shares.
The dominant criteria consumers use to evaluate the quality of a film are not utilitarian in nature
but hedonic: They are based on the enjoyment a film gives and the feeling of pleasure it evokes
Word of mouth and film reviewers’ opinions have been identified as two of the most critical
determinants of consumers’ film choice
Critic’s reviews more important when selecting independent movies and WOM for mainstream
movies
The study is based on the assumption that an award is the most effective as a signal if the jury is
representative of the kind of signal that consumers normally use to select among the products
available. → “awards are to be salient when they come from sources that are equivalent to the
sources most commonly used by consumers when selecting.”
Hypothesis 1: In the case of mainstream films, the positive effect of an award on box office
revenues and share of screens will be greater when the award winner is selected by a jury
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composed of end consumers than when the award winner is selected by a jury composed of peers
or experts. Bot supported
Hypothesis 2: In the case of independent films, the positive effect of an award on box office
revenues and share of screens will be greater when the award winner is selected by a jury
composed of experts than when the award is selected by a jury composed of peers or end
consumers. Supported
Results:
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A correlation analysis showed that the correlation between a few pairs of the independent
variables was high (r = .70 or higher): namely, between production costs and ad expenditure (r
= .73, p < .001), film type and film type (distributor; r = .71, p < .001), and wins (nominations) in
major categories and wins (nominations) in all categories (correlated at r = .74 or higher, p
< .001). To reduce multicollinearity, we selected one variable from each correlated pair, where
selection was based on the number of observations regarding each variable. Table 2 shows the
correlation matrix of the variables that were ultimately included in the regression analyses.
Come control variables contribute quite significantly to box office revenues and screen allocation.
As expected the effects of the three movie control variables ad expenditure, allocation of screenst–
2, and cumulative box office revenues are in general highly significant (p < .001).
Furthermore, winning in many of the categories of a specific award, winning many different types
of awards (as a proxy for a film’s broad appeal factor), and being classified in the film genres
romance or comedy result in a significant improvement of film performance.
The relationship between an award’s media power and a film’s performance was not significant.
Nor was there a significant relationship between the timing of the award and the economic
impact of this award, neither in terms of box office revenues nor in terms of screen allocations.
Awards with more media attention or those that are presented relatively early in the yearly
award season do not necessarily have more economic impact than awards with less media
attention that are presented relatively late in the award season.
The results of Model 1 indicate that, on average, expert-selected awards are more effective than
consumer- and peerselected awards. This result, however, has to be interpreted with caution, as
Model 1 did not include the interactions.
The results of Model 2 show that there is a significant interaction effect between the type of film
and expert-selected awards on box office revenues and on screen allocations. The interaction
variable selection x film type is only marginally significant in one of the revenues equations at p
< .10 and nonsignificant in the rest. Therefore, Hypothesis 1 is not supported.
The marginal contribution of an expert-selected award was much higher for independent than for
mainstream movies
Did find a significant interaction effect for type of film and expert-selected awards on box office
revenues
Conclusion
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Awards that come from sources that are, according to selection system typology, equivalent to the
sources most commonly used by consumers when selecting are assumed to be more credible and
salient—and thus in the end more effective—than other types of awards.
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However, we found only partial support for our claim that an award is more effective if it is
consistent with normal buying behavior present in a particular industry or industry segment.
Specifically, we found that expert-selected awards are the most effective for the independent film
segment (in terms of increasing box office revenues and screen allocations), as we expected. With
respect to the mainstream movie segment, on the other hand, the effectiveness of consumerselected awards was not found to be significantly different from other types of awards.
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Article 4: Franck, E. & Nuesch, S. (2007) - Avoiding “Star Wars” – Celebrity Creation as Media
Strategy
Stars can be found as well as created, and creating them can be a viable competitive strategy.
I – Introduction
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“Self-made” superstars attract audiences based on their perceived excellence in the provision of a
certain service.
Mass media allow stardom to be artificially created by media publicity and promotion.
Celebrities have inferior opportunities to capture the value created by their appearance.
II – Pop Idol
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Pop Idol shows are a very lucrative business.
A significant revenue stream is derived from merchandising the Idol brand.
19 Entertainment is effectively structuring a global base for Pop Idol, which generate money not
simply from the sale of the format and the exploitation of the promoted celebrities, but also from
multimedia platforms, phone calls and the Internet.
Business model: Take unknonw but ambitious young individuals who are willing to sign
recording, management or merchandising rights away, equip them with stardom and sell access
to the “fabricated” celebrities.
Popular with the audience advertisers desire most: young women.
Experience shows that the “manufactured” celebrities in general could not sustain audience
interest in their work when they lost the publicity generated by appearing weekly on prime time
television.
Most finalists of the first series of American Idol vanished  The enormous publicity created
during the television show rapidly decreased after the show.
III – A strategy framework of star attraction in the media
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A company’s success depends on: value creation and value caption.
A media enterprise has a competitive advantage if it is able to create and obtain more economic
value than the marginal (breakeven) competitor in its product market.
The profits of media firms are positively related to viewer drawing capability of stars and
negatively to their bargaining power as external resource suppliers.
The consumption of media content is generally non-rival: If a person watches a television
broadcast, it does not diminish someone else’s opportunity of watching it as well.
The production of media content is subject to large economies of scale, because the production
costs are largely independent of the size of the audience.
The expenses involved in generating the first copy tend to be considerable.
The value of the program is unaffected by the number of viewers, but the value of the commercial
to the advertisers is directly and positively linked to audience size  The viewer drawing
capability is crucial. Why?
1. Rosen Explanation: Superstars are “relatively small numbers of people who earn enourmous
amounts of money and dominate the activities in which they engage”
 Two premises:
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o Lower quality is an imperfect substitute of higher quality
o Talent or quality is costlessly observable by all potential consumers
 Depends on sector or job
 The second assumption is less plausible in arts
2. Adler: The phenomenon of superstars is a learning process that occurs if consumption
requires knowledge.
 Consumers will not diversify indefinitely either across activities or across individuals
within a given activity; however it does not explain why everybody would choose to have
the same superstars.
 The more popular the superstar in question is, the lower the searching costs to find
competent discussants will consequently be.
 Superstars may emerge among equally talented performers.
Bargaining Power of Superstars
 The existence of rents is not sufficient for a media firm to earn above average returns.
 Resource suppliers with a powerful bargaining position are able to capture a large
proportion of the created value, whereas resource suppliers with weak bargaining power will
find themselves obtaining far less value.
 Rosen’s theory: have a certain degree of monopolistic power due to their exceptional talent.
o Superstars cannot be separated from the activity in which they excel  Display high
bargaining power  Enable them to capture a large parts of the generated rents
 Adler’s theory: enjoy high bargaining power due to the star specific consumption capital 
creates lock-in-effects and significant switching costs.
 “Self-made” superstars are excellent in value creation and value capture. Media firms, therefore, have
clear incentives to find substitutes with comparable value creation potential but less bargaining power.
IV – “Manufactured” celebrities
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“The celebrity is a person who is known for his well-knowness.
Superstars all share admirable qualities – qualities that somehow set them apart from the rest of
us – whereas celebrities need not do anything special.
In reality: the boundary between “self-made” superstars and “manufactured” celebrities is more
blurred.
Fame may stand independent of accomplishment, heroics, or talent.
Viewer Drawing Capability:
 Celebrities generate gossip externalities.
 The interaction benefit of gossip increases with the number of people knowing the tidings of a
particular celebrity.
 The more popular a celebrity is, the easier gossip circulation becomes  increasing function
of the celebrity’s popularity.
 Star attraction of celebrities is not linked to the consumption benefit of the performance but
rather to the subsequent interaction benefit  No longer necessarily based on talent.
Bargaining Power:
 Celebrities are easy to replace  Low bargaining power
 These celebrities are particularly dependent upon the program that made them visible
Market Segmentation:
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 Celebrity “creation” is feasible wherever an activity does not have clearly measurable quality
indicators and whenever its consumption does not require specific knowledge.
 As long as audiences are interested in the talent superiority of performers, “self-made”
superstars will not disappear from the media despite their ability to capture large parts of the
generated economic value.
 While superstars exert strong bargaining power due to the singularity of their
performances and/or the consumers’ accumulation of specific consumption capital,
“manufactured” celebrities are interchangable and thus, have low market power to capture
value.
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Cultural Industries & International Business
Article 1: Footer, M. & Graber, C.B. (2000) - Trade Liberalization and Cultural Policy
This articles examines the tension between global trade and the pursuit of cultural policies by national
governments. It also gives an overview of the range of cultural policy measures.
Introduction:
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To what extent should free trade principles apply to different sorts of artistic and linguistic
products and services?
To what extent should international trade policies defer to the cultural policies of national
governments, even if those policies include the protection, or subsidization, of cultural goods and
services in the interests of the preservation of cultural identity and cultural heritage?
1. Conflict between trade liberalization and domestic cultural policy measures
1.1 Background of the conflict
Printed media has a relatively low tradeability:
Their publication in the vernacular of the local market
Their cultural specificity
In the film production and distribution: exists evidence of tension (US Department of State during
the inter-war years to respond to protective European screen quotas)
 Definision of cultural industry:
 Frankfurt School: oxymoron which draw a critical distinction between the debasement of
cultural values through the standardized mass production of cultural goods and ‘the
associations of transformative power and aesethetico-moral transcendence that the concept
of culture carried with it’.
 Nicholas Garnham: describe ‘those institutions in our society which employ the characteristic
modes of production and organization of industrial corporations to produce and disseminate
symbols in the forms of cultural goods and services, generally, although not exclusively, as
commodities’.
 Cultural critics complaining about the erosion of “standards of quality”
 The develping conflict centred on “cultural identity” and the trade in film and television
programmes, do the extent that the term “culture” became synonymous with the word
“audiovisual”.
 Underlying tension between views led to the introduction of a “cultural exception”. Two options
were discussed:
1. The introduction of a “cultural exception” to trade, within the scope of GATS
 Problem: Exceptions to key trade principles and disciplines must be narrowly defined
 Solution: Introduce the concept of an exception for “culture”, or “art”, into the general
exception provisions of Article XIV GATS.
2. The adoption of a “cultural specificity” approach
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 Neither succeeded. Most countries feel the necessity to refrain from GATS obligations in the
audiovisual sector in order to be able to continue to pursue their cultural policies.
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1.2 Domestic cultural policy measures
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Subsidies: Eurimages provides grants and loans for the co-production of European works.
Domestic content: Domestic broadcast content to control access to their television broadcast and
film market.
Market access restriction: A rebate on box-office taxes for cinemas that show national films,
prohition on the dubbing of foreign films, dubbing licences.
Regulatory/Licensing restrictions.
Tax measures: Taxes are levied on box-office revenues, on receipts of broadcasters, on video
cassettes.
Intellectual property protection: Private copying schemes, use of a “blank levy”.
Foreign investment and ownership.
Border measures: Tariffs or quantitatives restrictions
Film co-production agreements.
1.3 Intellectual property, trade, and culture
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Intellectual property products, such as artistic and literary works, are incompletely commodified.
National and regional intellectual property laws are presently insufficiently harmonized 
Duality inherent in the underlying rationale for copyright.
Copyright distinguishes between the “idea” which remains a common good and accessible to all in
the public domain (public sphere) and its “expression” which is susceptible to a property claim
(private sphere)
Revenues from secondary use rights are often administered exclusively by one collecting society,
authorized by the government  Foreign rightholders, in order to be compensated for their
works which subsist in these countries, are forced to have their secondary use rights administered
by these collecting societies and to pay the relevant administration fee.
 Leading to an increasing friction in the international community.
1. Incomplete commodification
2. Increased blurring between the private/public spheres of cultural works and their attendant
rights
3. The encroachment of international rulemaking upon the domestic policy sphere.
2. The phenomenon of globalization
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Globablization is more than an intensified internationalization; there are qualitative differences
between the two  Signals the growing interdependence and interprenetration of human
relations alongside the increasing integration of the world’s socioeconomic life.
The internationalization of economics and cultures: consists in opening the geographical frontiers
of each society to messages and goods from other countries.
2.1 Technological impact
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Not yet clear if, or how, the Internet will be regulated.
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Internet does not represent the same mass-communication medium as broadcasting; instead it is
a medium for individual communication  it should not fall under local content rules for
broadcasting transmissions.
Keener competition in the broadcasting and telecommunications sector.
 The lack of national control and international regulation of export cartels in the audiovisual, print
and electronic media, and the multimedia industries needs urgently to be addressed.
2.2 Growth of the audiovisual sector
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As a consequence of digitalization, an explosion in demand for audiovisual content is expected
Due to the increase in demand for content, the level of employment in the audiovisual sector is
expected to double globally
2.3 Growth and diversification of the print and electronic media
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The print and electronic media has also been revolutionized by technological developments that
have led to the merger and convergence of previously separate sectors such a broadcasting, etc…
with the subsequent development of new products and services.
The new links that are being forged between cultural content, telecommunications, business, and
industry applications could make it more difficult to define cultural products as goods, services, or
a mixture of both.
2.4 Increased tension between trade globalization and cultural identity
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Sociological view: Globalization is a process that produces new differentiation linked less to
territories and more to market distribution
Psychological view: Globalization leads to a slackening of strong, integrated forces replaced by a
more open society with greater uncertainties
While nationhood has traditionally been the precondition for the self-determination of citizens in
modern democracies, it has led to political fragmentation in industrialized countries.
Economically: due to the structure of the world-wide audiovisual market, art films are in
competition with Hollywood’s big budget mainstream movies  Easy for a US film to successfully
enter foreign markets at low marginal costs.
2.5 Recent WTO complaints
1. Dispute between the US and Turkey over the taxation of foreign film revenues by Turkey 
Combination of two domestic cultural policy measures – the controlled access of foreign films to
the domestic film market coupled with a tax measure to ensure restricted entry.
2. Dispute between the European Communities and Canada over film distribution.
3. Trade and Culture at the WTO in the new Millenium
3.1 Distribution services
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Likely to remain fertile ground for conflict between trade and culture, both in the audiovisual and
print and media sectors, since control over distribution of cultural goods and services is
increasingly concentrated in the hands of a small group of film and media producing companies,
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capable of controlling both geographically and temporally all the processes of production and
distribution of a film, television programme, or book and magazine publication.
Third Bananas case: A company which is a banana ‘operator’ i.e. engages in the buying, selling,
and distribution of bananas, is caught by the broad definition of ‘wholesale trade services’ and,
irrespective of the fact that it is vertically integrated, is a service supplier within the scope of
GATS.
3.2 Subsidies and countervailing duties
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The promotion of domestic content takes many forms with national public broadcaster promoting
and carrying certain quantities of domestically produced audiovisual content: direct grants, tax
write-offs, low interest loans…
3.3 Antidumping
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Will arise in the filed of cultural goods and services
Production and sales are all characterized by high fixed and low marginal costs with frequent
price discrimination between market.
Dumping is based on the incremental cost of supplying the additional market at prices below
those charged in the domestic market rather than simply selling below cost
3.4 Safeguards
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Could be invoked as a means of helping WTO members with strong cultural industries to protect
themselves when seriously injured by the importation of like products
Still subject to negotiation
3.5 Trade and investment measures
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Foreign investment and ownership measures in the field of cultural goods and services that
discriminate between foreign and domestic cultural goods and services are more likely to be
challenged under Article III:4 GATT
4. Conclusions and Recommendation
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All WTO Members, for whom the trade in audiovisual services and the marketing distribution of
electronic and print means are of importance, balance their market access openings with their
need to preserve cultural policies by developing specific disciplines.
Governments look critically at ways in which they can preserve their cultural heritage through
domestic regulatory measures such as licensing, domestic content rules…
WTO Members review their means of financial support to cultural industires while at the same
time considering the inclusion of deminimis exemption clauses to allow foreign cultural suppliers
limited forms of access to their markets.
Working Group on the Interaction between Trade and Competition consider some of the examples
of anti-compeititve behaviour in the cultural indsutries that are currently not caught by WTO
rules, particularly with respect to foreign film distribution.
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Article 2: Pathania-Jain, G. (2001) - Global parents, local partners: A value-chain analysis of
collaborative strategies of media firms in India
Focus on the business logic behind alliances between global multimedia giants and local partnersby
showing howthey each benefit
Adaptive strategies of global media companies that have recently entered India; emphasis on
their collaborative alliances with local companies
 Article suggest → indian television has begun its journey down parth toward its integration into
global television system
 Satellite Television Asian Region (STAR TV): served as a catalyst for a dramatic and irreversible
transformation of the Indian Tv industry
 Collaborative alliances → serve as a valuable site of inquiry to study exchanges between
globalization & localization
 Globalization → arrival of borderless multinational corporations, unversing together.
 Localization → customization of product to suit local tastes (language preferences)
 Collaborative alliances are most influential in adding value to each other
 Balance the industrial and the cultural but to take into account their interaction
 Content of media value heavy and carry meaning for audience but creation, production of
products involve a process that has been rationalized in a western, industrial model and the
market economy has a decisive influence on the nature of the resultant cultural industry
 Cultural industries approach: examines the broader context of viewer reception set by the social
environment; the professional practices of trading in, marketing and scheduling tv programs 
In-depth analysis of what the prevailing model is for cultural industrialization in a given country
 Connection between globalization & collaborative alliances
 Alliance activity internalizes transactions within the admin structure of the corporation &
helps to absorb uncertainty
 Alliances provide companies access to the expertise that they have
 Subcontracting of market niches: where products that a transnational corporation cannot
manufacture itself are taken on by a third party who is better placed in the market
 Combining mobility and flexibility with the control and integration of activities on a world
scale; allowing a tight loose network that is tight enough to ensure predictability and stability
when dealing with external collaborators
 Hypothesis: most valuable contribution that the local partners make is a cultural, essentially
unstandardized one in the process creating local programming that will appeal to local audiences
but which in the process has become industrialized
 Suggested that global partners make a contribution that can be viewed as a economic one,
bringing finance and technology & industrial structures
1. How do local companies benefit the collaborative alliance?
2. How do global parent companies benefit the collaborative alliance?
 Analysis seeks to examine what each partner brings to the alliance
 Applying the porter’s value chain analysis to collaborative alliances
 Value chain: independent system or network of activities connected by linkages
 Important source of competitive advantage
 Study how alliance activities implace the respective value chains of partner firms
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 Success of horizontal linkages → depend on the corporation's ability to identify and exploit
interrelationships among distinct but related businesses
 How global firms convert synergies into competitive advantages (collaborative advantages)
Findings 1: engaging in collaborative alliances with local companies
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Contracting with an independent firm to perform value activities by outsourcing supplies of input
Sharing of activities can occur without the need to coordinate purely independent firms
Coalitions → take form of technology licenses, supply agreements, marketing agreements & joint
ventures
Finding 1a: operations: utilization of distribution channels using assured software supplied by
local partner
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Reduce uncertainty related to supply by vertically integrating backward by acquisitions or
alliances
Local partners are reliable source of local software
The local cultural sensibility of such software would be very different for a global partner to
match
Finding 1b: Outbound logistics: local partners provide terrestrial distribution support
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Benefit of domestic distribution within India
Finding 1d: marketing and sales: joint marketing opportunities
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Local partners can assist in joint marketing and sales efforts through relationships with local
alayers
Finding 1d: procurement: local software providers can be reliable source of high quality
programming
Finding 1e: Human resource management: local partner employees can help negotiate
unfamiliar terrain of new country
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Ability to fulfill regulatory requirements and bureaucracy = important contribution
Customization to the specificity of the local terrain helps the global newcomer to avoid missteps
Finding 1f: Firm infrastructure
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Help with office space, hiring etc
Finding 1g: opportunities to invest in profitable ventures
Findings 2a: operations:
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Scale economies can occur to subsidiaries → standardize operations → cut costs
Global localization → localization that was applied globally
Findings 2b: outbound logistics:
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Distribution channels controlled by parent companies → serve as reliable outlets for software
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Co-produced programming would benefit from the parent’s company’s global distribution
infrastructure
Findings 2c marketing and sales
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Global media firms enjoy advantages related to connections
Global advertising
Global alignments are reflected in the indian context
Global practices contribute to the centralization of creative functions and circumscribe the roles
of local employees
Cross media synergies: Importance of horizontal strategy: cuts across divisional boundaries of a
diversified firm, coordinated set of goals across distinct but interrelated business units
Findings 2d: procurement
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Local subsidiareis rely on parent companies for an assured supply of inputs
Parent company’s partnerships can prove helpful
Operating within the oligopolistic structure of the television industrial complex
Findings 2e: HRM: flow of talent around the globe
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Conversations with television executives revealed a number of examples of how global companies
move creative, managerial, technical, and marketing talent seamlessly across the globe
Importance of these specialists who work in the film, tv, music indsutries
He believed that these new specialists and profes182 PATHANIA-JAIN sionals who work outside
the traditional professional and organizational cultures of the nation-state contributed to “the
transformation of culture on a global scale
Finding 2f: Firm Infrastructure: Deep Pockets Ensure Staying Power
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Global firms with considerable financial clout can cross-subsidize money-losing channels from
other profitable operations
The backing of a large conglomerate can mean the difference between survival and extinction to
many fledgling companies
Not all companies can count on support from their parents. Knowing that they cannot survive
prolonged losses, most small companies begin to show signs of desperation quite early
one sees that the utility of the value-chain analysis is to provide a framework to examine in detail
advantages that partners can confer upon each other.
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CONCLUSION:
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Dealt with adaptive strategies of international global companies to deal with the new realities
represented by emerging markets that are more unfamiliar and more demanding and more
resourceful
Creative production → decentralized to local employees or out sourced from local partners
Local companies become the collaborates that offer a foothold for outsider to acquire inside
positions in country markets
The local partner quite uniquely acts as a knowledgeable and well-connected tour guide for
negotiating the rocky cultural terrain represented by a new cultural market
The global parent similarly represents the stature and security of a well-heeled “trophy parent,”
who signals that the local company is in the big league.
What is clearly emerging is a split between the creative aspects of cultural production, including
the creative products themselves on one side, and other aspects of industrial practice and
structure such as marketing and distribution on the other.
To truly understand just what international media companies are selling to their Indian partners,
one has to look not so much at the content that appears on the television screen, but examine
instead the new sophistication in the mechanisms for delivering Indian audiences to global
advertisers.
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Article 3: Jin, Dal Yong (2007) - Reinterpretation of Cultural Imperialism: Emerging Domestic
Market vs Continuing US Dominance
The rapid growth of Korean popular (K-pop, TV, film) culture in Asia has raised the issue of whether
cultural imperialism symbolizing a one-way flow of cultural products from Western countries to
developing countries is a viable thesis.
 Korean popular culture has become dominant in East and Southeast Asia over last 10 years.
 Korean TV shows increasingly enter different countries in the region, have become one of the most
popular products in Asia.
 Also been shown across continents: Mexico and other Latin American countries.
 Many scholars have explored the trends primarily from cultural perspectives, such as cultural
proximity and cultural homogenisation in East and Southeast Asia.
 The rise of Korean popular culture in Asia has raised the issue whether cultural imperialism,
symbolising a one-way flow of cultural products from Western countries to developing countries,
is reliable thesis to explain the Korean cultural market.
 Critical views alluded a notion that cultural imperialism was over in Korea.
Cultural imperialism vs. counter-cultural imperialism
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Debate has sparked about in dominance in international cultural exchange when the
international communication system mainly expanded by supplying television programs and
motion pictures from Western countries to developing countries throughout 60/70s.
Argue that international communication system was characterised by imbalances and
inequalities between rich and poor nations.
According to Herbert Schiller, powerful US communication industry forced global
commercialisation on international communication system.
He identified the dominance of the US & few European nations in the global flow of media
products as an integral component of Western imperialism.
Guback argued that powerful US communication industry exerts sometimes quite considerable
influence over the cultural life of other nations.
Tunstall, Schiller & Guback define imperialism as the conscious and organised effort made by
Western, particularly communication conglomerate to maintain commercial, political and
military superiority.
Since early 1990s cultural imperialism thesis has come under increasing criticism from diverse
perspectives.
In the current global media environment which is characterised by plurality of actors and media
flows, it is no longer possible to sustain the notion of Western media domination.
There are several domestic cultural industries in various parts of the world, aimed at markets in
the same region.
Eg. Televisa in Mexico and TV Globo in Brazil, scholar Straubhaar emphasizes that national
cultures can now defend their ways of life and in some respects even share their images with the
rest of the world.
 Some countries find themselves unequal but possessing variable degrees of power and
initiative in culture as well as economics.
 Another scholar Tracy states that traditionally culture-weak third world producers have now
strengthened their national cultural industries to compete against dominant US and
European cultural power.
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These theoreticians are proponents of a reverse cultural imperialism.
Another main attack on cultural imperialism focuses on 2nd weak link in its arguments.
 Argument: audience in several countries actively resist media content of Western products,
while enjoying at least some nationally produced genres.
 Korean audiovisual industry has begun to produce and export domestic television programs
and films on a large scale.
The Korean cultural market cultural imperialism
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Between 50-90s Korea was an exemplary case of cultural imperialism - Korean TV programming
relied enormously on imports from the US as in many other countries.
On the production, sales and flow side Korea imported more culture from US than it sold to US.
Korean government restricted foreign television programs through a program quota system.
The importing began to increase when quota decreased in 1990s, imports increased in domestic
broadcasting market until 1996.
Reshaping cultural products flow
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After 1990s Korea reduced foreign audiovisual products in the national cultural market while
increasing its production and exports of domestic cultural products.
Several significant causes for the decrease in television program imports:
 1997 economic crisis and increase in number of domestic program producers.
 Economic crisis influenced the popular cultural market as well as financial market because
broadcasting industry needed to cut down on foreign television programs due to budget cuts.
 Broadcasting companies had to use cost-cut measures as advertising revenues put them in
trouble.
Post economic crisis audiovisual products domestically have rapidly grown.
Korean media increased their production and television programs.
Reasons for the growth of Korean cultural products
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Several dimensions to the rise in the exports of Korean audiovisual products in Asia
 Diverse product sourcing
 Cultural proximity of East and Southeast Asia
 Economic and technological development of the region
 Changes in media policies in the region
 Political and historical considerations.
Korea has developed new local producers and they have produces better programs because of
strong competition among them over last several years.
There were 3 network broadcasters dominated television program production and their exports.
Many independent producers also played a key role in producing television programs for network
cable channels.
Rapid growth in number of independent producers has contributed to an increase in quality of
programs and exports of television programs.
Korean broadcasters found new partners and were able to circulate their products in East Asia
effectively through their partner producers.
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Cultural elements have emerged as factors of comparative advantage in building up the Asian
markets for audiovisual products.
However there are still many Asian cultures who find American and Japanese cultures irrelevant
to their reality.
Growth in domestic audiovisual products produced by many broadcasting companies has resulted
in the spread of Korea’s cultural products throughout Asian region.
Reinterpretation of cultural imperialism thesis
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With rapid growth in production of domestic television programs, Korea seems to have escaped
from the dominance of the cultural imperialism.
As counter-imperialism theorists argue, Korea may currently be defending its way of life and in
some respects shares its cultural products with the rest of Asia.
Western dominance in the global cultural market including Korea has not decreased at all.
The US based or owned cultural industries have greatly expanded their dominance of cultural
products and capital over the last decade.
US has maintained its global cultural domination over last 15 years.
The rise of cable and satellite television channels as well as terrestrial television channels in
Europe, Latin America and Asia has expedited the opening of national markets for foreign
producers and distributors.
Direct flow of cultural products from the US to Korea decreased for a while in 2001.
Cultural market in Korea has changed direction, in particular in import of television programs
from US and of all imported foreign programs in 2003.
US media giants have firmly demanded that East Asian countries fully open their market to US
capital as well as cultural products.
US media giants have adopted a strategy known as ‘think globally, act locally’ to maintain or
expand their dominance effectively.
Transnational corporations have gradually become highly influential institutions in Korean
cultural industry.
Problematic of the narrowly focused cultural imperialism thesis
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This tradition represents cultural imperialism as a narrowly focused cultural process to do with
the flow of cultural products from Western countries, in particular the US, to the Third World.
The reverse cultural imperialism proponents primarily interpreted cultural imperialism as (only)
the ‘iniquitous flow of cultural production’ from the First to the Third World.
Western cultural dominance in television programs and films has decreased in a few countries,
Western dominance through capital and industry has greatly increased since developing
countries lifted bans on foreign ownership and foreign investment as part of the globalization
process.
Conclusion
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Korea has become an emerging market with its diverse product sourcing & growing exports.
Process however remains complex however US dominates the Korean culture market through
both cultural products and capital.
Theories of imperialism have been revised and have become more sophisticated
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The role of emerging domestic players in Korea has been increasing across East and Southeast
Asia.
global reorganization does not imply a complete collapse of American cultural power.
Cultural imperialism still plays an important role in interpreting the world cultural and or media
system, because cultural imperialism has resulted in a situation whereby the media of advanced
capitalist economies have been able to substantially influence the nature of cultural production
and consumption of Third World countries.
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Article 4: Burri, M. (2012) - Cultural protectionism 2.0: Updating Cultural Policy Tools for the
Digital Age
Explores the normative dimensions of cultural diversity policies in the global digital space, what
adjustments are needed, and the feasibility of diversity regulation.
Introduction:

Given the changing landscape cultural protectionism needs to come up with ways to stay on top of
the cultural protectionism in the global digital space. Complexities in the shift from offline to
online and from analogue to digital are inherent policy challenges. This article proposes some
adjustment to current media policy practices to serve better the goal of sustainably diverse
cultural environment.
What does the global discourse on cultural diversity teach us?
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The discourse of cultural protectionism is dynamic and changing
Although policies of protecting cultural industries and the related institutions are national per se,
changes have often been triggered from beyond state borders. → because cultural products are
not just vehicles of identity, values and meaning, but also tradable matters
Although the landscape is changing and intense developments (Convention on Cultural Diversity)
have been made one could think that this could provide some guidance as to the suitable tools to
be applied at all levels of governance; however this is not the case for 2 reasons
1. Going back to all the way to “trade versus culture” clash in Uruguay Round of trade
negotiations (1986-1994) → establishment of the WTO (world trade organization) →
multiple countries fighting for “exception culturelle” (aim was to exempt any product that
is culture related from the rules of the negotiated WTO agreements. With the prime focus
on audio-visual services (films, tv, video, sound) → the agenda was only partially attained.
→ number of flexibilities were built into the law of the WTO → allowing in effect precious
few real commitments for audio-visual services
 Trade versus culture conflict remains. WTO members want to keep status quo, “all-ornothing” approach. → the status quo may have some negative implications that go beyond the
mere opening of global media markets, and concern digital trade in particular
 All members recognize the importance of digital trade no consensus on how to solve
classification issues between → spillovers cause legal uncertainties → detrimental to
achieving any public-interest objectives
2. The second hope for policy guidance lay in UNESCO
 Its flaws are apparent: the Convention’s weak binding power and its substantive and
normative incompleteness involve no real advance towards the goal of sustaining a diverse
cultural environment except spreading a political manifesto.
 Convention’s own implementation into the law of the contracting parties is of modest or even
non-existent significance.
 The Convention will not alter the rights and obligations of the WTO members
In conclusion: discourse on trade and culture and on cultural diversity has a long history and has
been politically boosted real effects are few → guidance and how cultural diversity is to be
attained are non-existnet
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In the trade and culture discourse, the common statements are that cultural diversity is becoming
impoverished and almost extinguished as the globalized flow of easy entertainment coming from
Hollywood dominates and homogenizes
 Using just US film industry as an example
 Counterarguments: The free-market proponents make their case by using examples of local
musicians gone global, or the success of documentary productions
→ everything is thus painted black and white and these two examples represent the extremes
→ the discussion on “trade” and “non-trade” values is so extremely politicized that it renders any solution
impossible.
 Other noteworthy tendencies in the application of the notion of cultural diversity are:
1. Although an increased adoption of cultural diversity as a legitimate policy goal → “diverse” or
“multicultural” is often used as opposed to national
2. Growing disconnection in the discussion of the different types of “diversities” → may lead to policy
fragmentation and extreme narrowing of the diversity policy strategies
3. Cultural diversity is mobilized as a national competitiveness argument, most often against US
productions and services. → could lead to further market fragmentation making it more difficult
for European producers to compete with American imports
4. The concept of cultural diversity appears so absurdly “all encompassing” that it is “empty”.
Cultural diversity is then simply added after a comma, as just another of the regulatory objectives
to be pursued → losing the real sense
 European Commission seems to think that additional financial resources for broadcasters is the
solution → however, the causal link between more advertising and safeguarding cultural
diversity is at best weak, if not completely inconsistent.
 As some authors point out, “quite paradoxically, it seems that the largest threat to cultural
diversity concerns currently emanates from the vagueness and ambiguity surrounding many of
the relevant EU provisions”.
BEYOND THE UNESCO CONVENTION, THE WTO AND OUT IN THE DIGITAL SPACE
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There are real changes in the media environment such as:
 The proliferation of content;
 New ways of distributing, accessing and consuming content;
 The empowerment of the user;
 The reduced role of intermediaries; and
 The new modes of content production, where the user is not merely a consumer but is also an
active creator, individually or as part of the community.
The meaning of this new digital space→ some say it prompts a panacea for the goal of cultural
diversity by creating a digitally empowered mix of commercial and non-commercial, amatuer and
professional, mainstream and niche content → the writer argues that in some cases it has
opportunities (for better, more efficient, and flexible accommodation of diversity concerns) and in
other cases it is a challenge
Designing Cultural Diversity Toolboxes for the Digital Media
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So far, policies in the audio-visual media (film, television and radio) have focused above all on
supply, that is, on the production and distribution of content, often under the condition that this
content reflects certain qualities that are perceived “good” (where “good” is sometimes simply
equal to national).
So far, there is little or no innovation in advancing cultural diversity goals that adequately makes
use of the potential of digital technologies.
We argue that three paths are worthwhile considering in this regard: (1) responding to the
creative user; (2) responding to the unlimited “shelfspace” in cyberspace; and (3) taking into
account policies conventionally thought peripheral to achieving cultural objectives and often
falling outside the traditional media law and policy domain (at least as it was conceived predigitization and pre-convergence).
Responding to the creative user
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The contemporary media consumer is empowered by the simple device of remote control and
broad palette of tools and platforms to choose from → they can decide what and when to see and
they have also turned into producers
The reality of more content and new content, generated and spread individually or by groups,45
and its accessibility without real location restriction, are important for making regulatory
choices.
Does the UCC (user created content) add diversity, locality and non-commercialism and
contributes to a richer media environment or are we just seeing the same content exponentially
distributed
Improve the quality of UCC works and integrate amateur and professional production and
distribution better → what is needed overall are supporting efforts that make creativity an
interrupted and indeed promoted process.
British regulator for media and communications, has been a pioneer in moving proactively into
new media → BBC iPlayer and BBC Archives are two of the present initiatives of “digitizing” the
institution of public service broadcasting.
Diverse initiatives, not necessarily of legal nature, can contribute to making the media user
digitally literate and to overcoming the widening gaps between digital “haves” and “have-nots” in
industrialized societies, and the global divide between developed and the developing countries
Responding to the unlimited “shelf-place”
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Digital representation radically modifies the characteristics of content. → freed from the need for
a tangible medium and it can be swiftly distributed at almost no cost, also there is the ability to
make perfect copies. Also digital media has changed the way information is organized and
accessed.
The reproduction, storage and distribution of digital media products have a marginal cost close
to zero it becomes economically viable to sell relatively unpopular products. → creates incentives
for suppliers to offer a larger and more diverse portfolio including non-hit titles
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