Cultural Industries
6013B0502Y
Lecturers:
➢ Dr. Monika Kackovic (Course coordinator):
➢ Dr. Isabella Pozzo:
➢ Dr. Aldo do Carmo:
For questions concerning hybrid learning or zoom issues: Lieke de Jong →
Assessment and testing:
➢ Individual final exam (60%): 2h closed book, multiple choice questions (30%) + open
questions (30%) covering all required readings.
○ Minimum grade to pass: 5.5
○ Wednesday, october 27th, 9h-11h
➢ Team written assignment (40%): includes the literature from week 2 up to 6 (week 7 is
optional).The length of the written assignment is between 3500 to 4500 words,
excluding references, tables, and figures. The deadline to upload the written assignment on
Canvas is October 25, 2021 (before 9:00 am).
Sections of the written assignment in relation to your business case:
○ Introduction (business case)- 500
○ New theoretical insight to business case - 2.500 words
■ Business model
■ Organizational design
■ Marketing
■ Technological change
■ Competitive processes
○ Discussion/generalizability & conclusion - 500 words (!)
➢ Weekly team oral presentations: relate to the week’s literature and to the student team’s
business case.
○ Failing grade = 1000-word ‘second chance’ essay and submit it on Canvas before the
next plenary lecture.
○ Failing 2 or more = -1 point in the final grade.
○ Not allowed to take the exam if a team failed 3 or more oral presentations or if they
have not submitted the ‘second chance’ essay(s).
Weighted average of group assignments + final exam has to be at least 5.5
Tutorial: from week 2 and up to and including week 6, each team of students will prepare a 10-15 minute PowerPoint
presentation.
,Week 1: Analyzing the creative and cultural industries (CCI) → M. Kackovic
Lecture week 1
Balenciaga’s white shirt → 150€
Lidl white shirt → 5€
Why?
Tensions:
- Art vs. commerce
- Creativity vs. management
- Craft vs. technology
- Individual inspiration vs. creative systems (systems like Pixar, where it’s not just one
individual creating).
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. ie. differentiation between the apparel industry and
high fashion.
Throsby, D (2008). Modeling the cultural industries. International Journal of Cultural Policy, 14(3),
pp. 217–232. (reading time: approximately 2 hours).
Summary: the article 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.
+ Are you taking a demand perspective or a supply perspective? Different economical approaches.
Core question: is it possible to find a common group of industries on which all of the models agree?
Questions and definitions:
- What is a cultural good?
- What is a creative good?
- What are the cultural industries? What are the core characteristics?
- What are the creative industries? What are the core characteristics?
- Is making a distinction between the cultural and creative industries important? Why or why
not?
Good and services characteristics
➢ Require some input of human creativity in their production
○ Original ideas and novel ways of interpreting the worlds, expressed in text, sound
and image.
➢ Vehicles for symbolic messages to those who consume them
○ Cultural goods and services and more than simply utilitarian and serve a larger
communication purpose.
○ “It’s not just a white shirt, it’s saying something about you, social status...
➢ Contain at least potentially, intellectual property.
○ Attributable to the individual or group producing it.
1
,Definition: cultural industries
- Those industries that combine the creation, production and commercialisation of contents
which are intangible or cultural in nature (UNESCO)
- Characteristics: human creativity / (transmission of) symbolic messages / intellectual property
- e.g. music
Definition: creative industries
- 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)
- Characteristics: human creativity / (can take form of) goods & services / commercial use
- e.g. advertisement, graphic design, web design, etc.
So: cultural goods have cultural value and transcend pure economic valuation. They are valued by
those who make them and those who consume them for social and cultural reasons, not for their
utilitarian or materialistic functionality. In contrast, the creative goods do not need to satisfy all the
other criteria that would enable them to be cultural, with the exception that it requires some level of
creativity in their production. That is, creative goods extend beyond cultural goods.
Is making a distinction between the cultural and creative industries important? Why or why not?
Hint: YES
- Estimates of contribution (of the industry in the country, to make comparisons, to have a
global understanding of its actual contribution…): if an economic perspective is used as an
estimate of contribution, then only those industries with high growth rates and employment,
output, exports, etc. will be included. But if an artistic or cultural perspective is taken, then
other industries will be included.
- Policy implications (economic vs. cultural objectives)
- Economic analyses (supply vs. demand perspective)
Models of the cultural industries classification system:
➢ DCMS model
➢ Symbolic texts model
➢ UIS model
➢ Americans for the arts odel
➢ WIPO model
➢ Concentric circles model
(!!: their implications in classificating in the cultural industries)
6 economic approaches to analyzing the cultural industries
1. Industrial organization theory
It basically focuses on standard economic variables: value added, levels of employment, business concentration…
also characteristics of markets: seller and buyer concentration, product differentiation, entry/exit conditions...
Relevant primarily to those models oriented towards the commercial production of cultural
goods and services (like the WIPO model):
2
, - Market concentration
- 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.
- Production chain with value adding stages from initial idea, the production of goods
and services, their marketing and distribution, until consumption:
3. Inter-industry analysis
Focuses on the ways in which output is produced and distributed in the economy and the effects it has on
population or even governments.
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 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. i.e. Hollywood
- Demand side (tourist concentration) and supply side (networking and agglomeration
externalities in production).
- 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.
5. Contract theory and property rights
These peculiarities of the industry are used by firms to develop “optimal” contracts with
(value chain) partners.
➢ Identifying property rights as a basis for contractual arrangements that can be
explained by the uniqueness of cultural industries:
○ ‘Nobody knows’ (uncertainty of demand): at virtually no stage in the production
sequence for any type of cultural product can a project’s final outcome be predicted
with any degree of assurance.
○ ‘Art for art’s sake’ (irrational labour market): creative workers care passionately
about the quality of their product and will therefore often behave in ways that are
contrary to the predictions of rational labour market theory.
○ ‘Infinite variety’ (all products are – more or less – differentiated): they require
diverse and vertically differentiated skills.
○ ‘Durability’ (ability to yield rents over a long period)
3
6013B0502Y
Lecturers:
➢ Dr. Monika Kackovic (Course coordinator):
➢ Dr. Isabella Pozzo:
➢ Dr. Aldo do Carmo:
For questions concerning hybrid learning or zoom issues: Lieke de Jong →
Assessment and testing:
➢ Individual final exam (60%): 2h closed book, multiple choice questions (30%) + open
questions (30%) covering all required readings.
○ Minimum grade to pass: 5.5
○ Wednesday, october 27th, 9h-11h
➢ Team written assignment (40%): includes the literature from week 2 up to 6 (week 7 is
optional).The length of the written assignment is between 3500 to 4500 words,
excluding references, tables, and figures. The deadline to upload the written assignment on
Canvas is October 25, 2021 (before 9:00 am).
Sections of the written assignment in relation to your business case:
○ Introduction (business case)- 500
○ New theoretical insight to business case - 2.500 words
■ Business model
■ Organizational design
■ Marketing
■ Technological change
■ Competitive processes
○ Discussion/generalizability & conclusion - 500 words (!)
➢ Weekly team oral presentations: relate to the week’s literature and to the student team’s
business case.
○ Failing grade = 1000-word ‘second chance’ essay and submit it on Canvas before the
next plenary lecture.
○ Failing 2 or more = -1 point in the final grade.
○ Not allowed to take the exam if a team failed 3 or more oral presentations or if they
have not submitted the ‘second chance’ essay(s).
Weighted average of group assignments + final exam has to be at least 5.5
Tutorial: from week 2 and up to and including week 6, each team of students will prepare a 10-15 minute PowerPoint
presentation.
,Week 1: Analyzing the creative and cultural industries (CCI) → M. Kackovic
Lecture week 1
Balenciaga’s white shirt → 150€
Lidl white shirt → 5€
Why?
Tensions:
- Art vs. commerce
- Creativity vs. management
- Craft vs. technology
- Individual inspiration vs. creative systems (systems like Pixar, where it’s not just one
individual creating).
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. ie. differentiation between the apparel industry and
high fashion.
Throsby, D (2008). Modeling the cultural industries. International Journal of Cultural Policy, 14(3),
pp. 217–232. (reading time: approximately 2 hours).
Summary: the article 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.
+ Are you taking a demand perspective or a supply perspective? Different economical approaches.
Core question: is it possible to find a common group of industries on which all of the models agree?
Questions and definitions:
- What is a cultural good?
- What is a creative good?
- What are the cultural industries? What are the core characteristics?
- What are the creative industries? What are the core characteristics?
- Is making a distinction between the cultural and creative industries important? Why or why
not?
Good and services characteristics
➢ Require some input of human creativity in their production
○ Original ideas and novel ways of interpreting the worlds, expressed in text, sound
and image.
➢ Vehicles for symbolic messages to those who consume them
○ Cultural goods and services and more than simply utilitarian and serve a larger
communication purpose.
○ “It’s not just a white shirt, it’s saying something about you, social status...
➢ Contain at least potentially, intellectual property.
○ Attributable to the individual or group producing it.
1
,Definition: cultural industries
- Those industries that combine the creation, production and commercialisation of contents
which are intangible or cultural in nature (UNESCO)
- Characteristics: human creativity / (transmission of) symbolic messages / intellectual property
- e.g. music
Definition: creative industries
- 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)
- Characteristics: human creativity / (can take form of) goods & services / commercial use
- e.g. advertisement, graphic design, web design, etc.
So: cultural goods have cultural value and transcend pure economic valuation. They are valued by
those who make them and those who consume them for social and cultural reasons, not for their
utilitarian or materialistic functionality. In contrast, the creative goods do not need to satisfy all the
other criteria that would enable them to be cultural, with the exception that it requires some level of
creativity in their production. That is, creative goods extend beyond cultural goods.
Is making a distinction between the cultural and creative industries important? Why or why not?
Hint: YES
- Estimates of contribution (of the industry in the country, to make comparisons, to have a
global understanding of its actual contribution…): if an economic perspective is used as an
estimate of contribution, then only those industries with high growth rates and employment,
output, exports, etc. will be included. But if an artistic or cultural perspective is taken, then
other industries will be included.
- Policy implications (economic vs. cultural objectives)
- Economic analyses (supply vs. demand perspective)
Models of the cultural industries classification system:
➢ DCMS model
➢ Symbolic texts model
➢ UIS model
➢ Americans for the arts odel
➢ WIPO model
➢ Concentric circles model
(!!: their implications in classificating in the cultural industries)
6 economic approaches to analyzing the cultural industries
1. Industrial organization theory
It basically focuses on standard economic variables: value added, levels of employment, business concentration…
also characteristics of markets: seller and buyer concentration, product differentiation, entry/exit conditions...
Relevant primarily to those models oriented towards the commercial production of cultural
goods and services (like the WIPO model):
2
, - Market concentration
- 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.
- Production chain with value adding stages from initial idea, the production of goods
and services, their marketing and distribution, until consumption:
3. Inter-industry analysis
Focuses on the ways in which output is produced and distributed in the economy and the effects it has on
population or even governments.
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 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. i.e. Hollywood
- Demand side (tourist concentration) and supply side (networking and agglomeration
externalities in production).
- 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.
5. Contract theory and property rights
These peculiarities of the industry are used by firms to develop “optimal” contracts with
(value chain) partners.
➢ Identifying property rights as a basis for contractual arrangements that can be
explained by the uniqueness of cultural industries:
○ ‘Nobody knows’ (uncertainty of demand): at virtually no stage in the production
sequence for any type of cultural product can a project’s final outcome be predicted
with any degree of assurance.
○ ‘Art for art’s sake’ (irrational labour market): creative workers care passionately
about the quality of their product and will therefore often behave in ways that are
contrary to the predictions of rational labour market theory.
○ ‘Infinite variety’ (all products are – more or less – differentiated): they require
diverse and vertically differentiated skills.
○ ‘Durability’ (ability to yield rents over a long period)
3
