Summary articles Theories of EMCI
Contents
Week 1: business models in the creative industries ............................................................................. 3
Cultural industries: product-market characteristics, management challenges and industry
dynamics, Peltoniemi (2015) ............................................................................................................... 3
Pay as you go: a new proposal for museum pricing, Frey and Steiner (2010) .................................... 9
Contracts between art and commerce, Caves (2003) ....................................................................... 13
Adding value to innovation: impressionism and the transformation of the selection system in visual
arts, Wijnberg and Gemser, (2000). .................................................................................................. 16
Week 2: creativity and innovation in creative markets ...................................................................... 18
The determinants of artistic innovation: bringing in the role of organizations, Castañer and
Campos, (2002).................................................................................................................................. 18
The effect of Slack resources and environmental threat on product exploration and exploitation,
Voss et. al., (2008) ............................................................................................................................. 22
Creativity from interaction: artistic movements and the creativity careers of modern painters,
Accominotti (2009) ............................................................................................................................ 27
Incumbents, innovation, and competence: the emergence of recorded jazz, 1920 to 1929, Phillips
and Owens, (2004) ............................................................................................................................ 30
Week 3: networks and value creation ................................................................................................. 32
The economics of a good party: social mechanics and the legitimization of art/culture, Currid,
(2007) ................................................................................................................................................ 32
The effect of online consumer reviews on new product sales, Cui, Lui and Guo (2012) .................. 34
Seeding strategies for viral marketing: an empirical comparison, Hinz et. al., (2011) ..................... 38
Adaptive personalization using social networks, Chung, Wedel and Trust, (2016) .......................... 41
Week 4: fads and fashions.................................................................................................................... 45
Leading the herd astray: an experimental study of self-fulfilling prophecies in an artificial cultural
market, Salganik and Watts, (2008) .................................................................................................. 45
Status in the organization and its effects on cultural consumption, de Groot, Kackovic and
Wijnberg, (2019)................................................................................................................................ 47
Cloak or Flaunt? The Fashion Dilemma, Yoganarasimhan, (2012) .................................................... 50
Effects of reputational sanctions and inter-firm linkages on competitive imitation, Gemser and
Wijnberg, (2001)................................................................................................................................ 54
Week 5: authenticity and reality .......................................................................................................... 57
Dealing with reality: market demands, artistic integrity, and identity work in reality television
production, Wei, (2012) .................................................................................................................... 57
The quest for authenticity in consumption: consumers’ purposive choice of authentic cues to
shape experienced outcomes, Beverland and Farrelly, (2009) ......................................................... 59
The personality of performing arts venues: developing a measurement scale, Ouellet, Savard, and
Colbert, (2008)................................................................................................................................... 62
, Competition, selection and rock and roll: the economics of payola and authenticity, Mol and
Wijnberg, (2007)................................................................................................................................ 64
Week 6: release strategies and recommender systems ...................................................................... 67
Demand and supply dynamics for sequentially released products in international markets: the case
of motion pictures, Elberse and Eliashberg, (2003) .......................................................................... 67
Competitive dynamics and the introduction of new products: the motion picture timing game,
Kirder and Weinberg, (1998) ............................................................................................................. 67
Factorization techniques for recommender systems (Netflix), Koren, Bell and Volinsky, (2009) .... 76
Platforms, promotion, and product discovery: evidence from Spotify playlists, Aguiar and
Waldfogel, (2018) .............................................................................................................................. 78
Streaming services and the homogenization of music consumption, Knowx and Datta, (2020) ..... 82
,Week 1: business models in the creative industries
Cultural industries: product-market characteristics, management challenges and
industry dynamics, Peltoniemi (2015)
This article is basically a (very big) literature review that has the purpose to offer a
reconceptualization of cultural industries by tracing their boundaries, their features, and the
dynamics that follow from these features. They do this by looking at 314 cultural industry studies.
They focus on research done in organizational, business and management on the specifics of cultural
production including innovation, organizational structures and the management of creative labor.
Cultural industries are defined as those that produce experience goods with considerable creative
elements and aim these at the consumer market via mass distribution: film, music, book and
magazine publishing, TV and radio, fashion, and video games. There are two features that are specific
to the cultural industries:
- There is a consistent oversupply of creative labor, which is dependent on economic cycles
(there are many more aspiring singers, actors, and designers than there is work for them).
- There is extreme uncertainty regarding the success potential of any specific product. This is
because prior to consumption, consumers don’t have complete information about the
product.
→ these two features result in a system of continuous overproduction, where a variety of
gatekeepers restricts the access of cultural products to audiences.
Cultural industries definitions
Cultural goods offer a low level of utilitarian value, and a high level of aesthetic, symbolic, social
meaning, and social display value. These cater to the need of entertainment and identity building.
Because of the social aspects of cultural goods, preferences in particular films, books, etc. are
affected by choices made by others in the social network.
Cultural goods are experimental, meaning that prior to consumption, you don’t know whether the
goods will succeed in bringing you the entertainment/enjoyment you seek. This also means that
innovation plays an important role in these goods: it does not aim to improve performance or
functionality, but it aims to constantly introduce different types of goods to please diverse tastes.
Sources of revenue in the creative industries include:
- Selling the creative good
- Advertising goods of other producers
- Subsidies
- Other types of support for what we are because we are that (grants from foundations,
mecenae, corporate sponsorships, loyalty programs, etc.)
- Revenues for the creative/cultural goods we offer or for other goods we offer on the side
(the shop, restaurant, etc.)
Method
He used a search engine to find literature about the above-mentioned industries. Then narrowed it
down by filtering on English language, publishment in a journal, containing empirical work, and
acknowledgement in either cultural or creative industries as meaningful. He also looked at citations
, used in those articles, which resulted in the 314 empirical studies he used for this report. Three main
themes emerged:
- Research on creative products and how customers perceive them.
- Research on the people engaged in creative work.
- Research on how cultural industries are organized and how this affects creative outcomes.
Product market characteristics
Taste and popularity
Four interrelated assumptions are made in cultural industries research concerning demand: 1)
cultural goods are experiential, and consumers have a desire for novelty, 2) most cultural industries
operate under increasing returns, 3) there is extreme variance in sales so products diverse into hits
and misses, 4) demand is unpredictable in the extreme so it is impossible to identify hits in advance.
Taste: entails the preferences consumers report.
- Upper classes have been found to have more highbrow tastes and enjoy many types of
cultural products, and lower classes more popular tastes and enjoy more specific types of
cultural products.
- Taste is acquired rather than pre-existent (but you can inherit tastes from you parents).
- Taste can be determined by the nostalgia effect (preferring things that were popular in your
youth).
- There is a gender bias towards male artists (especially by male consumers)
- Musical preferences have been found to be based on various functions: psychological arousal
(kinky), self-reflection, communication and coming together with like-minded people.
- There are greater differences in individual taste than between nationalities
→ These findings suggest that the source of the unpredictability does not necessarily lie in tastes, but
rather in the ways in which information diffuses among consumers or in the uncertain outcomes of
the production process in which goods are created.
Popularity: so, where taste was about what people report to like, popularity entails the sales
distribution of cultural industry goods.
- Sales result from information cascades through which consumers inform each other about
product’s qualities. The intention to purchase (especially from influential people) is also
important information circulating amongst consumers.
- Signals can be a factor for sales-prediction, like superstars and exotic film locations.
However, the additional sales generated by superstars tend to be smaller than their costs (so
maybe don’t ask George Clooney to star in your movie after all).
- Sales are determined by the balance between novelty and familiarity: consumers need a
level of familiarity to understand a product, and a level of novelty to enjoy it. However, even
though there is a lot of support for familiarity being important, the exceptionally successful
products tend to be highly innovative.
- Sales are also determined by distribution and timing in relation to season
→ The findings on popularity raise three concerns relating to unpredictability of demand: 1) the
assumption of extreme unpredictability of future sales is supported by the lack of correlation
between popularity and quality, 3) the idea of information cascades, where consumers discover what
they like and inform their friends about such products (WOM), assumes that friends have similar
tastes, 3) are more familiar products less sensitive to information cascades?
