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Class notes Cultural Industries for Business (6012B0267Y)
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Notes of Cultural Industries. Includes all weeks and lectures notes.
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Week 1Modeling the cultural industries ( Throsby)
Cultural industries → those industries that combine the creation, production and
commercialisation of contents which are intangible or cultural in nature OR those which have
their origin in individual creativity, skill and talent and which have a potential for wealth and
job creation through the generation and exploitation of intellectual property.
The definition of culture has been highly debated, however it can be either interpreted in an
anthropological way or in a functional one. Nevertheless, cultural goods are identified with
the following characteristics:
1) require some input of human creativity
2) vehicles for symbolic messages to those who consumes them
3) they contain some intellectual property that is attributable
Models of cultural industries ⇒ each model gives rise to a different set of industries that
make up the cultural production sector of the economy. Depending on the model used
several results would appear.
1) UK-DCMS model → industries that require creativity, skill and talent with potential for
wealth and job creation through exploitation of their intellectual property. Here we can
see that the three characteristics of cultural goods need to be met.
2) symbolic texts model → differentiation between high and popular culture on the
grounds of their different power dynamics in regard to social class, gender and race.
3) concentric circles model → the cultural value of cultural goods that gives these
industries their most distinguishing characteristic. Thus, the more pronounced the
cultural content of a good, the stronger is the claim to inclusion of the industry
producing it.
4) WIPO copyright → this model is based on industries involved directly or indirectly in
the creation, manufacture or production of copyrighted works.
5) UNESCO → identification of 5 cultural domains: natural heritage, performance, visual
arts, crafts and design, books and press, audiovisual and digital media. These goods
are valued for those who made them and those who consume them for social and
cultural reasons, not for their utilitarian personality. Thus, it transcends purely
economic valuation.
6) Americans for the arts model → this model is based on identifying businesses
involved with the production and distribution of arts labeled as arts centric
businesses.
6 economic approaches to analyzing cultural industries
1) industrial organization theory → standard economic variables for which data are
routinely collected for all industries by statistical agencies
a) structure → organizational characteristics of markets with particular emphasis
on the degree of seller and buyer concentration, nature of product
differentiation and conditions of entry and exit of firms.
b) conduct → the ways in which firms in the industry behave in setting prices
and output levels, marketing their products and competing with one another
c) performance → refers to how efficiently firms adjust to effective demands for
their output in terms of costs, prices, and product quality
These types of studies are useful as they locate the creative sector empirically within
the overall macroeconomy, and the calculation of rates of growth. Relevant to those
, models oriented towards the commercial production of cultural goods and services
(WIPO mainly).
2) value chain analysis → initial creative ideas are combined with other inputs to
produce creative goods or services which might then pass through further
value-adding stages until it enters marketing and distribution channels and eventually
reaches the final consumer. There are seven stages: creation, production,
dissemination, exhibition, consumption, archiving, education. Used mainly to analyze
performance in different stages of the production cycle.
3) Inter-industry analysis → evaluated the economic impact of cultural policy
a) input-output analysis → depicts ways in which output is produced and
distributed in the economy, and it also captures the direct and indirect induced
effects on industries. However there are two main issues with this approach:
i) few breakdowns of the cultural industries included
ii) stringent data requirements
b) social accounting matrices → similar tool requiring less data for analyzing the
impact of industries
4) Locational analysis → used by governments to attract firms and develop cultural
industry clusters. The formation of clusters depends on demand and supply factors of
the market. Network and agglomeration externalities in cultural production lead to
clustering of firms that benefit from being located close to other firms in the same
industry.
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.These peculiarities of the industry are used by firms to develop optimal
contracts with value chain partners. There are several characteristics that make
contracts in cultural industries different:
a) nobody knows → the outcome of the production of a cultural product can’t be
predicted with assurance
b) art for art’s sake → creative workers care passionately about their product so
they would have behaviors that go against the rationale of the market
c) infinite variety → all products are more or less differentiated which makes it
difficult to make a common contract
d) durability → ability to yield rents over a long period of time
6) trade and development → used to explain specialization of countries and eliminate
trade barriers. Trade has been recognised to improve global welfare, however it can
be the case that countries adopt measures to protect their cultural products.
Implications
1) Telecommunications have led to an integration of the means by which cultural
content is produced, distributed and consumed which caused a global marketplace
2) creative industries are interesting for governments as they are a source of innovation
to feed economic growth and employment creation
Distinction between cultural industries and creative industries:
, - estimates of contribution → in cultural industries, only the industries with high growth
and rates would be included, whereas in artistic other industries would be included
- policy implications
- economic analyses
Is it possible to find a common group of industries on which all of the models agree ?
New world, old rules (Khaire)
Digitalization → rapid uptake of the internet and other digital media for creation, commerce
and communication
Globalization → opening of previously closed economies, which has led to widespread
economic development and increased interest in these countries from Western firms. Thus,
this has led to disorder in the creative industries and has challenging consequences for the
functioning of established entities.
Globalization has engendered two types of pioneer entrepreneurship → interaction of
globalization and digitalization yielded ground for entrepreneurial opportunities. However for
cultural goods, cultural distance is more important than physical distance.
1) allowed cultural products to be consumed in other countries
2) emergence of new markets for certain products in their home country
New opportunities
1) creators → digitalization and globalization have influenced the work of artisans as
they tried to appeal to the global marketplace. Though, their influence is limited.
However, technology advancements have impacted who can be an artist and aspire
to make a living from being a creator of artistic works. Furthermore it is easier to
connect with customers as well as access crowd-funding platforms.
a) Digitalization has not lead to a large shift in the types of work created within
existing categories → AI has not influenced significantly, thus there is no proof
of the success of the reverse engineering technique.
b) The claim made by Bezos that everyone could become an artist has not
changed the situation of artists in any significant way → with more
competition is even more difficult for artists to become known.
c) eliminating publishers is not an optimal solution as it would affect new artists
as well as causing a flooding of self-published books
2) producers → in the current technology-enabled context, producers remain necessary
and relevant in the creative industries, although certain aspects of their duties have
changed.
a) the main impact has been the provision of a new distribution platform for both
the production of cultural goods and the management of economic
transactions (Youtube, e-books)
b) The ecosystem remains important because intermediaries and norms have
power over producer’s fortunes,thus making online retail more difficult in
creative industries than in other industries.
3) intermediaries → intermediaries are just as necessary as before for three main
reasons:
a) the properties of cultural goods = variety, experiential nature, inherent
symbolism
b) the increasing number of creators and producers in the market
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