Weeks 1-7 of Cultural Industries Lectures and readings. This summary is an overview, and I still recommend discussing with classmates and in class to further understand what they are trying to convey.
Summaries of the articles: Modeling the cultural Industries (Throsby, 2008), An individual bu...
weeks 1 7 of cultural industries lectures and readings summaries of the articles modeling the cultural industries throsby
2008
an individual business model in the making a c
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Universiteit van Amsterdam (UvA)
Business Administration
Cultural Industries
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Cultural Industries Notes (Lectures & Readings)
Week 1- Analysing the Creative and Cultural Industries
Defining feature of CCI: It is the practice of consumption (in a. Symbolic realm) and not the
production or the material characteristics of the products
Tensions (e.g. Balenciaga vs Lidl)
Art vs commerce
Creativity vs management
Craft vs Technology
Individual inspiration vs creative systems
Modeling the cultural Industries (Throsby, 2008)
“Is it possible to find a common group of industries on which all of the models agree?”
Throsby pays attention to different definitions of cultural and creative industries, boundary
conditions, and economic approaches.
Summary:
The article discusses the definition of cultural industries, the boundaries of cultural industries and
examines 6 tools for economic analysis that can be applied to cultural industries
Definitions/Questions:
What are the cultural industries? What are the core characteristics? (Cultural good)
- Those industries that combine the creation, production and commercialisation of contents
which are intangible or cultural in nature (UNESCO)
- Must have:
- Require some input of human creativity in the production
- Original ideas and novel ways of interpreting the world, expressed in text, sound and
image
- Vehicles for symbolic messages to those who consume them
- Cultural goods and services are more than simply utilitarian and serve larger
communicative purpose
- Contain, at least potentially, intellectual property
- Attribute to the individual or group producing it
- Cultural value - transcends purely economic valuation
What are the creative industries? What are the core characteristics?
- Those industries 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 (DCMS 2001)
- Must have:
- Human creativity in production and/or manufacturing
- Good and services (can be - in a commercial application normally)
- Extends beyond cultural - just need to be creative
Is making a distinction between the cultural and creative important?
- Estimates of contribution (make sure everyone is included)
- Policy implications (economic vs cultural objectives) depending upon the:
- Economic analyses (supply vs demand perspectives)
1
,2013: Ernst Young completed first map of cultural and creative industries —> the industries
combined made for 2.2trillion US dollars (3% of the world GDP) - greater than the
telecommunications industries. Worldwide 29 million people are employed.
WIPO model was used -if concentric circles model would have been used, as not all cultural
industries would’ve been properly included (as they are for foundation fo WIPO model), the CC
model would only include companies at the core.
Centric Circles Model only included core companies, and if EY would’ve used this model, there
would’ve been way different (smaller) results.
6 Models of the cultural industries classification system:
UK–DCMS Model:
- late 1990s in the UK to re-position the British economy as one driven by creativity and
innovation in a globally competitive world.
- Virtually all of the 13 industries included in the DCMS classification could be seen as
‘cultural’
- UK government has preferred to use the term ‘creative’ industries to describe this grouping,
partly to mark a shift in policy away from a focus on the arts and to sidestep possible high-
culture connotations of the word ‘cultural’ + to widen the scope of industries included
Symbolic Texts Model:
- differentiates between high and popular culture on the grounds of their different power
dynamics in regard to social class, gender, and race/ethnicity.
- 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 Model:
- based on the proposition that it is the cultural value of cultural goods that gives these
industries their most distinguishing characteristic
- the more pronounced the cultural content of a particular good or service, the stronger is
the claim to inclusion of the industry producing it
- The model asserts that 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 or ‘concentric circles’, with the proportion of cultural to commercial content declining
as one moves further outwards from the centre.
WIPO Copyright Model:
- This model is based on industries involved directly or indirectly in the creation, manufacture,
production, broadcast and distribution of copyrighted works
- focus is thus on intellectual property as the embodiment of the creativity that has gone into
the making of the goods and services included in the classification.
- A distinction is made between industries that actually produce the intellectual property, and
those that are necessary to convey the goods and services to the consumer.
- A further group of ‘partial’ copyright industries comprises those where intellectual property is
only a minor part of their operation.
UNESCO Institute for Statistics (UIS) Model:
- This model is in the process of development as a basis, covering industrial, occupational and
product classifications
- In its application to the cultural industries, the model identifies five ‘core cultural domains’:
cultural and natural heritage; performance and celebration; visual arts, crafts and design;
books and press; and audiovisual and digital media.
- It also extends to the ‘related domains’ of tourism, sport and leisure.
Americans for the Arts Model:
- This model is based on identifying businesses involved with the production and distribution of
the arts, labelled as ‘arts-centric businesses’
2
,6 economic approaches to analyzing the cultural industries
1) Industrial organization theory
- Standard economic variables: value of production, value added, business concentration…
- e.g. Relevant primarily to those models oriented towards the commercial production of
cultural goods and services - like WIPO model or non price competition (?)
- Used to develop policy and analyze the attractiveness of the industry.
- Relevant for identifying the most attractive local export markets
- Market concentration (seller & buyer..)
- Barriers to entry and exit
- Degree of competition
2) Value chain analysis
- Used by firms to analyze performance in different stages of the production cycle
- Used by firms to analyze which stages in the value chain are powerful or lucrative
- e.g. Relevant for firms after they have decided to expand into specific local markets, and rely
on local firms for optimizing the value chain (e.g., marketing and distribution of the songs,
but not production given that the songs are already produced).
- Production chain w value adding stages from initial idea, the production of goods or
services, their marketing and distribution, until consumption
- Creation —> Production —> (Marketing) Dissemination —> (Distribution) Exhibition —>
(Sales) Consumption
- Like the fashion design stage + industry
3) Inter-industry analysis
- Used to evaluate the economic impact of cultural policy
- Input-output analysis: Output from one industrial sector as input to another sector
(spillovers).
- Social accounting metrics: Similar tool requiring less data for analyzing the impact of
industries
4) Location analysis
- Used by governments to attract firms and develop (cultural) industries clusters
- 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
- Demand side (tourist concentration) and supply side (network and agglomeration
externalities in production)
5) Contract theory and property rights
- These peculiarities of the industry are used by firms to develop optimal contracts with (value
chain) partners.
- e.g. Relevant for managing royalty and license payments for the songs in the specific local
markets.
- Identifying property rights as a basis for contractual arrangements that can e explained by
the uniqueness of cultural industries:
- “Nobody knows” (uncertainty of demand)
- “Art for art’s sake” (irrational labour)
- “Infinite variety” (All products are - more or less- differentiated)
- “Durability” (ability to yield rents over a long period)
6) Trade and development
- Used to explain specialization of countries and to eliminate trade barriers
- e.g. it can act as a source for the elimination of international tradedistorting measures such
as import tariffs and quotas.
- Theory of comparative advantage to explain specialization of production in different
countries assertion: free trade maximizes work welfare (UNESCO vs WTO)
3
, An individual business model in the making: A chef’s quest for
creative freedom (Svejenova, Planellas & Vives, 2010)
Summary:
The article demonstrates that business models are not only organizational devices that reveal a
company’s logic for creating and capturing value but also are useful in identifying triggers and
mechanisms associated with changes
(1) Individual level of analysis, (2) triggers and mechanisms, and (3 )value.
Definition of a business model: the content, structure, and governance of transactions designed
so as to create value through the exploitation of business opportunities’ (Amit and Zott)
- organizational device
- reveals the logic for creating and capturing value,
- reveals the organization’s approach to renewal.
- enhances the understanding, labeling and classification of an organization’s operations.
Reveals the logic for creating and capturing value, reveals the organizations approach to renewal,
and enhances the understand of an organization's operations
Ferran Adria’s business model:
4
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