Cultural Industries lecture notes
Week 1: Analyzing the creative and cultural industries (CCI)
Lecture
Classification models and economic analyses; Business models (and their evolution) for entrepreneurs and
for organizations
Course literature:
Thorsby, D (2008): Modelling the cultural industries
- 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
- Question: it is possible to find a common group of industries on which all of the models agree
- Definition of cultural industries: those industries that combine the creation, production, and
commercialization of contents which are intangible or cultural in nature (UNESCO)
- Shared characterisic: human creativity input, there must a transmission of symbolic
messages that serves a larger communication purpose, intellectual property that can be
attributed to a certain individual or group propducing the group
- Require some input of human creativity in their production
- Original ideas and novel ways of interpreting the world, expressed in text, sound,
and images
- Vehicles for symbolic messages to those who consume them
- Cultural goods and services are more than simply utilitarian and serve a larger
communicative purpose
- Contain, at least potentially, intellectual property
- Attributable to the individual or group producing it
- Definition of 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)
- Shared characteirsic: human creativity input, can take the form of goods or services, and
predominantly used in commercial application
- Cultural goods: cultural values, transcends purely economic valuation
- IN CONSTRAST, Creative goods: extends beyond cultural goods
- Is a distinction between the cultural and creative industries important?
- Estimates of contribution (the boundaries for that)
- Classification models
- Policy implications
- Economic analysis
- What would happen if the Concentric Circles Model was used instead of WIPO?
- Concentric circles model only include the cores of the cultural industries so it would not be
as sufficient
, - Models of cultural idnustries classificaiton system:
- DCMS model
- Symbold texts model
- UIS model
- American for the arts model
- WIPO mode;
- Concentric circles model
- 6 economic approaches to analyzing the cultural industries:
- Industrial organization theory: relevant primarily to those models oriented towards the
commercial production of cultural goods and services. Focuses on standard economic
variables
- Market concentration
- Barriers to entry and exit
- Degree of competition
- Value chain analysis: used by firms to analyze performance in different stages of the
production cycle
- Production chain with the value-adding stages from initial idea, the production of
goods or services, their marketing and distribution, until consumption
- Creation-Production-Dissemination-Exhibition-Consumption
- 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 matrices; Similar tools require less data for analyzing the impact
of industries
- Locational analysis: used by governments to attract firms and develop (cultural) industry
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
- 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
- ‘Art for art's sake’: irrational labour market
- ‘Infinite variety’: all products are more or less differentiated
- ‘Durability’: ability to yield rents over a long period
, - Trade and development: used to explain the specialization of countries and to eliminate
trade barriers
- Theory of comparative advantage to explain specialization of production in
different countries Assertion: free trade maximises world welfare (UNESCO vs.
WTO)
Svejenova, S., Planellas, M., Vives, L. (2010): An individual business model in the making: A chef’s quest for
creative freedom
- Business model-level of the individual
- Identify triggers/mechanisms of change
- Identified tlements of value: creation, appropriation, sharing & slippage
- Do an individual level of analysis to identify the triggers and mechanisms of change within
a business model
- 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
- Business model definition: the content, structure, and governance of transactions designed
so as to create value through the exploitation of business opportunities. In the core, it is an
organizational device to:
- Reveal the logic for creating and capturing value
- Reveal the organization’s approach to renewal
- Enhance the understanding, labeling, and classification of an organization’s
operations
- Ferran Adria’s Business model: shows the correlation between creativity and time
and Change Mechanism
, Poisson-de Haro, S & Monpetit, D. (2012): Surviving in times of turmoil: Adaptation of the Theatre Lex
Deux Mondes business model
- Adjust components of a business model
- Address challenges resulting from internal/external turmoil
- Summary: the article explores how a performing arts organization can adjust the components of its
business model to meet its current challenges resulting from an environment of turmoil
- Question: how can a performing arts organization adjust the different components of its business
model to meet the challenges resulting from an environment of turmoil?
- Can they solve that turmoil simply by adjusting their business model?
- CONCEPT: Business model: when is a new one needed?
- Understanding the logic of the firm for renewal as well as creating and capturing value
- Important to gain advantages against competitors
- Turmoil: internal and external
- External: difficulty to find funding ec
- Internal: difficulty in human assets or dual leadership, therefore, lead to conflict in
organizational objectives, etc.
- Components of a business model:
- Customer value proposition: pricing, type of offering, access options
- Key resources: brand, people, technology, partnership
- Key processes: creative process, production, human resources, marketing,
information technology (for cultural organizaions both key resources and key
processes are people related)
- Profit formula: cost structure, revenue model (perceived value of artsitics offerings)
- When is a new business model needed?
- Address the needs of potential customers (disruptive innovation)
- Capitalize on (new) technology (radical innovation)
- Bring ‘focus’ where one did not yet exist (from how we consume to how much we
consume)
- Respond to a shifting basis of competition (analog to digital recording)
- Quizzes:
- Trosby 2008) discusses the definition and boundaries of the cultural industries. In regards
to cultural products, which of the following statements is/are (un)true?
- Cultural goods require some input of human creativity and should be attributable
to an individual or group producing the good (this is TRUE)
- Cultural goods are simply utilitarian goods but nevertheless serve a larger
communicative purpose (this is UNTRUE)
- Svejeova, S., Planellas, M., & Vives, L. (2010) study the gastronomic innovator and
entrepreneur Ferran Adrià, chef and co-owner of the three-star Michelin restaurant elBulli,
Week 1: Analyzing the creative and cultural industries (CCI)
Lecture
Classification models and economic analyses; Business models (and their evolution) for entrepreneurs and
for organizations
Course literature:
Thorsby, D (2008): Modelling the cultural industries
- 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
- Question: it is possible to find a common group of industries on which all of the models agree
- Definition of cultural industries: those industries that combine the creation, production, and
commercialization of contents which are intangible or cultural in nature (UNESCO)
- Shared characterisic: human creativity input, there must a transmission of symbolic
messages that serves a larger communication purpose, intellectual property that can be
attributed to a certain individual or group propducing the group
- Require some input of human creativity in their production
- Original ideas and novel ways of interpreting the world, expressed in text, sound,
and images
- Vehicles for symbolic messages to those who consume them
- Cultural goods and services are more than simply utilitarian and serve a larger
communicative purpose
- Contain, at least potentially, intellectual property
- Attributable to the individual or group producing it
- Definition of 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)
- Shared characteirsic: human creativity input, can take the form of goods or services, and
predominantly used in commercial application
- Cultural goods: cultural values, transcends purely economic valuation
- IN CONSTRAST, Creative goods: extends beyond cultural goods
- Is a distinction between the cultural and creative industries important?
- Estimates of contribution (the boundaries for that)
- Classification models
- Policy implications
- Economic analysis
- What would happen if the Concentric Circles Model was used instead of WIPO?
- Concentric circles model only include the cores of the cultural industries so it would not be
as sufficient
, - Models of cultural idnustries classificaiton system:
- DCMS model
- Symbold texts model
- UIS model
- American for the arts model
- WIPO mode;
- Concentric circles model
- 6 economic approaches to analyzing the cultural industries:
- Industrial organization theory: relevant primarily to those models oriented towards the
commercial production of cultural goods and services. Focuses on standard economic
variables
- Market concentration
- Barriers to entry and exit
- Degree of competition
- Value chain analysis: used by firms to analyze performance in different stages of the
production cycle
- Production chain with the value-adding stages from initial idea, the production of
goods or services, their marketing and distribution, until consumption
- Creation-Production-Dissemination-Exhibition-Consumption
- 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 matrices; Similar tools require less data for analyzing the impact
of industries
- Locational analysis: used by governments to attract firms and develop (cultural) industry
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
- 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
- ‘Art for art's sake’: irrational labour market
- ‘Infinite variety’: all products are more or less differentiated
- ‘Durability’: ability to yield rents over a long period
, - Trade and development: used to explain the specialization of countries and to eliminate
trade barriers
- Theory of comparative advantage to explain specialization of production in
different countries Assertion: free trade maximises world welfare (UNESCO vs.
WTO)
Svejenova, S., Planellas, M., Vives, L. (2010): An individual business model in the making: A chef’s quest for
creative freedom
- Business model-level of the individual
- Identify triggers/mechanisms of change
- Identified tlements of value: creation, appropriation, sharing & slippage
- Do an individual level of analysis to identify the triggers and mechanisms of change within
a business model
- 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
- Business model definition: the content, structure, and governance of transactions designed
so as to create value through the exploitation of business opportunities. In the core, it is an
organizational device to:
- Reveal the logic for creating and capturing value
- Reveal the organization’s approach to renewal
- Enhance the understanding, labeling, and classification of an organization’s
operations
- Ferran Adria’s Business model: shows the correlation between creativity and time
and Change Mechanism
, Poisson-de Haro, S & Monpetit, D. (2012): Surviving in times of turmoil: Adaptation of the Theatre Lex
Deux Mondes business model
- Adjust components of a business model
- Address challenges resulting from internal/external turmoil
- Summary: the article explores how a performing arts organization can adjust the components of its
business model to meet its current challenges resulting from an environment of turmoil
- Question: how can a performing arts organization adjust the different components of its business
model to meet the challenges resulting from an environment of turmoil?
- Can they solve that turmoil simply by adjusting their business model?
- CONCEPT: Business model: when is a new one needed?
- Understanding the logic of the firm for renewal as well as creating and capturing value
- Important to gain advantages against competitors
- Turmoil: internal and external
- External: difficulty to find funding ec
- Internal: difficulty in human assets or dual leadership, therefore, lead to conflict in
organizational objectives, etc.
- Components of a business model:
- Customer value proposition: pricing, type of offering, access options
- Key resources: brand, people, technology, partnership
- Key processes: creative process, production, human resources, marketing,
information technology (for cultural organizaions both key resources and key
processes are people related)
- Profit formula: cost structure, revenue model (perceived value of artsitics offerings)
- When is a new business model needed?
- Address the needs of potential customers (disruptive innovation)
- Capitalize on (new) technology (radical innovation)
- Bring ‘focus’ where one did not yet exist (from how we consume to how much we
consume)
- Respond to a shifting basis of competition (analog to digital recording)
- Quizzes:
- Trosby 2008) discusses the definition and boundaries of the cultural industries. In regards
to cultural products, which of the following statements is/are (un)true?
- Cultural goods require some input of human creativity and should be attributable
to an individual or group producing the good (this is TRUE)
- Cultural goods are simply utilitarian goods but nevertheless serve a larger
communicative purpose (this is UNTRUE)
- Svejeova, S., Planellas, M., & Vives, L. (2010) study the gastronomic innovator and
entrepreneur Ferran Adrià, chef and co-owner of the three-star Michelin restaurant elBulli,
