Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
Week 1: The Economics & Business of the Creative Industries
This week’s literature:
• Peltoniemi, M. (2015), Cultural industries: Product–market characteristics,
management challenges and industry dynamics. International Journal of
Management Reviews, 17(1), 41-68.
• Frey, B. S. & Steiner, L. (2010): Pay as you go: A new proposal for museum pricing,
CESifo working paper, Public Choice, No. 3045.
• Caves, R.E. (2003). Contracts between art and commerce. Journal of Economic
Perspectives, 17(2), 73-83.
• Wijnberg, N.M. & Gemser, G (2000). Adding value to innovation: Impressionism and
the transformation of the selection system in visual arts, Organization Science, 11(3),
323-329.
PELTONIEMI (2015)
Cultural/ creative industries
Cultural/creative as concepts are used simultaneously. Both of them are not entirely well
defined. But what is a creative industry? Peltoniemi defines cultural industries as those that
produce experience goods with considerable creative elements and aim these at the
consumer market via mass distribution.
Many cultural industries definitions begin from the nature of the value of cultural goods.
Such goods offer a low level of utilitarian value, and a high level of aesthetic, social
meaning and social display value.
What do people speak about when they speak of business models?
A business model is a strategic plan of how a company will make money. The model
describes the way a business will take its product, offer it to the market, and drive sales.
Included in business models:
1. Where to find revenues.
2. Where to find the stuff that will make revenues come to us at minimal costs.
3. If we can do 1 and 2, how to make sure it stays that way and my competitors do not
imitate me and destroy my relative advantages.
Core sectors of the creative industries include film, music, publishing, TV and radio, fashion,
and video games.
1
, Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
More on the Peltoniemi Article (2015)
Peltoniemi reconceptualizes cultural industries by clarifying their boundaries, defining
their distinctive features, and analyzing the dynamics that result from these features. Drawing
on 314 studies, she develops a classification system (three main themes and six
subcategories) and proposes a framework for future research.
Two defining characteristics of cultural industries are
• Persistent oversupply of creative labor, independent of economic cycles.
• Extreme uncertainty about product success, since consumers cannot fully evaluate
cultural goods before consumption.
→ These lead to overproduction and reliance on gatekeepers (studios, publishers, critics,
retailers) to filter which products reach audiences.
Levels of analysis within the cultural industries
• Product level: Why some cultural products succeed while others fail.
• Organizational level: How firms, managers, and artists interact in production
processes.
• Industry level: How structures and dynamics shape creative outcomes.
Research Streams within the cultural industries
• Product–market characteristics: Cultural goods are experiential, demand novelty,
and exhibit hit–miss dynamics. Taste evolves through class, cumulative learning, and
nostalgia, while popularity is shaped by information cascades, signals (superstars),
the balance of novelty and familiarity, and distribution strategies.
• Management challenges: Tensions between artistic ambition and profit motives are
central. Research shows both conflictual and complementary relations, with dual
leadership and micro-level negotiations enabling creativity. Oversupply creates
precarious labor conditions, low wages, and reliance on networks, while copyright
and piracy shape incentives and corporate dominance.
Cultural industries operate as communities where sensemaking is shaped by charts, events,
and awards. Structures are divided between majors and independents, with debates on
concentration and diversity, and new dynamics introduced by digitalization and flexible
specialization.
2
, Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
FREY & STEINER (2010)
Sources of revenue in the creative industries
Selling the creative good (the most obvious one). However, selling the creative good is not
the core focus.
Advertising goods of other producers. For example: Rijksmuseum design collaboration with
Audi. Experienced a lot of critique and caused an ethical dilemma about the
commercialization of museums.
Subsidies or no subsidies
Other types of support for what we are because we are that (grants from foundations,
mecenae, corporate sponsorship, loyalty programs etc)
Revenues for the creative/cultural goods we offer or for other goods we offer on the side (the
shop, the restaurant etc). In the Rijksmuseum: during renovation included a big restaurant
inside the museum which is visible when cycling through it. They added the business model
of the restaurant to attract more visitors to the museum
Examples of pricing strategies in museums
Metropolitan Museum of Art, New York: Admission is officially free, but visitors are
encouraged to give a voluntary contribution. At the entrance, marble plaques display the
names of donors, and as visitors climb the stairs they are prompted to donate, creating
strong social pressure that often leads people to contribute.
High fixed prices: Some museums charge substantial admission fees, such as the
Rijksmuseum in Amsterdam or the Vatican Museums in Rome.
Price differentiation: A common strategy in cultural institutions is differentiated pricing. For
example, the Rijksmuseum offers reduced rates for children, students, and senior citizens,
while charging standard adult visitors more. In contrast, tour groups, such as those from
China or Korea, may pay higher rates than Dutch residents.
3
, Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
Frey & Steiner: Pay as you go
Frey & Steiner introduce the idea of “pay as you go.” They propose a new model: exit
pricing, where visitors are charged when leaving, based on the time spent in the museum. It
builds on earlier schemes (free entry, entry charge, donations, museum clubs) but tries to
overcome their downsides. Exit pricing acknowledges that museum visits are experience
goods: their value is only known after consumption. That makes paying at the end more
natural and potentially fairer.
How/why to price?
The article emphasizes that museums do not just have economic goals; they pursue multiple
objectives
Basic museum responsibilities (Noble's 1970 "Museum Manifesto"): collection,
conservation, study, exhibition, and communication. Pricing influences these, e.g. too many
visitors can harm conservation and reduce exhibition quality.
Economic goals: Museums often rely on subsidies, but they also need to raise revenue.
Pricing can help: Covering costs (admission, shops, restaurants), differentiating between
locals vs tourists, attracting donors (who often prefer low entry fees since their gifts are then
more visible).
Social/political goals: Public support often rests on museums being accessible and non-
elitist. Pricing can increase inclusivity, help educational efforts, and boost cultural prestige for
cities/nations.
So pricing is not just about efficiency (as in neoclassical economics), but about balancing a
portfolio of goals.
Market solution?
In theory, setting ticket prices at the equilibrium (where supply and demand meet) ensures
efficiency. Setting ticket prices at market equilibrium would mean that everyone who values
the museum visit at least as much as the equilibrium price gets access.
But museums also face issues of equity, overcrowding, and social goals, so they often
deviate from pure market equilibrium pricing.
4
Week 1: The Economics & Business of the Creative Industries
This week’s literature:
• Peltoniemi, M. (2015), Cultural industries: Product–market characteristics,
management challenges and industry dynamics. International Journal of
Management Reviews, 17(1), 41-68.
• Frey, B. S. & Steiner, L. (2010): Pay as you go: A new proposal for museum pricing,
CESifo working paper, Public Choice, No. 3045.
• Caves, R.E. (2003). Contracts between art and commerce. Journal of Economic
Perspectives, 17(2), 73-83.
• Wijnberg, N.M. & Gemser, G (2000). Adding value to innovation: Impressionism and
the transformation of the selection system in visual arts, Organization Science, 11(3),
323-329.
PELTONIEMI (2015)
Cultural/ creative industries
Cultural/creative as concepts are used simultaneously. Both of them are not entirely well
defined. But what is a creative industry? Peltoniemi defines cultural industries as those that
produce experience goods with considerable creative elements and aim these at the
consumer market via mass distribution.
Many cultural industries definitions begin from the nature of the value of cultural goods.
Such goods offer a low level of utilitarian value, and a high level of aesthetic, social
meaning and social display value.
What do people speak about when they speak of business models?
A business model is a strategic plan of how a company will make money. The model
describes the way a business will take its product, offer it to the market, and drive sales.
Included in business models:
1. Where to find revenues.
2. Where to find the stuff that will make revenues come to us at minimal costs.
3. If we can do 1 and 2, how to make sure it stays that way and my competitors do not
imitate me and destroy my relative advantages.
Core sectors of the creative industries include film, music, publishing, TV and radio, fashion,
and video games.
1
, Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
More on the Peltoniemi Article (2015)
Peltoniemi reconceptualizes cultural industries by clarifying their boundaries, defining
their distinctive features, and analyzing the dynamics that result from these features. Drawing
on 314 studies, she develops a classification system (three main themes and six
subcategories) and proposes a framework for future research.
Two defining characteristics of cultural industries are
• Persistent oversupply of creative labor, independent of economic cycles.
• Extreme uncertainty about product success, since consumers cannot fully evaluate
cultural goods before consumption.
→ These lead to overproduction and reliance on gatekeepers (studios, publishers, critics,
retailers) to filter which products reach audiences.
Levels of analysis within the cultural industries
• Product level: Why some cultural products succeed while others fail.
• Organizational level: How firms, managers, and artists interact in production
processes.
• Industry level: How structures and dynamics shape creative outcomes.
Research Streams within the cultural industries
• Product–market characteristics: Cultural goods are experiential, demand novelty,
and exhibit hit–miss dynamics. Taste evolves through class, cumulative learning, and
nostalgia, while popularity is shaped by information cascades, signals (superstars),
the balance of novelty and familiarity, and distribution strategies.
• Management challenges: Tensions between artistic ambition and profit motives are
central. Research shows both conflictual and complementary relations, with dual
leadership and micro-level negotiations enabling creativity. Oversupply creates
precarious labor conditions, low wages, and reliance on networks, while copyright
and piracy shape incentives and corporate dominance.
Cultural industries operate as communities where sensemaking is shaped by charts, events,
and awards. Structures are divided between majors and independents, with debates on
concentration and diversity, and new dynamics introduced by digitalization and flexible
specialization.
2
, Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
FREY & STEINER (2010)
Sources of revenue in the creative industries
Selling the creative good (the most obvious one). However, selling the creative good is not
the core focus.
Advertising goods of other producers. For example: Rijksmuseum design collaboration with
Audi. Experienced a lot of critique and caused an ethical dilemma about the
commercialization of museums.
Subsidies or no subsidies
Other types of support for what we are because we are that (grants from foundations,
mecenae, corporate sponsorship, loyalty programs etc)
Revenues for the creative/cultural goods we offer or for other goods we offer on the side (the
shop, the restaurant etc). In the Rijksmuseum: during renovation included a big restaurant
inside the museum which is visible when cycling through it. They added the business model
of the restaurant to attract more visitors to the museum
Examples of pricing strategies in museums
Metropolitan Museum of Art, New York: Admission is officially free, but visitors are
encouraged to give a voluntary contribution. At the entrance, marble plaques display the
names of donors, and as visitors climb the stairs they are prompted to donate, creating
strong social pressure that often leads people to contribute.
High fixed prices: Some museums charge substantial admission fees, such as the
Rijksmuseum in Amsterdam or the Vatican Museums in Rome.
Price differentiation: A common strategy in cultural institutions is differentiated pricing. For
example, the Rijksmuseum offers reduced rates for children, students, and senior citizens,
while charging standard adult visitors more. In contrast, tour groups, such as those from
China or Korea, may pay higher rates than Dutch residents.
3
, Theories of Entrepreneurship and Management in the Creative Industries | EMCI | Fien Dubbeldam
Frey & Steiner: Pay as you go
Frey & Steiner introduce the idea of “pay as you go.” They propose a new model: exit
pricing, where visitors are charged when leaving, based on the time spent in the museum. It
builds on earlier schemes (free entry, entry charge, donations, museum clubs) but tries to
overcome their downsides. Exit pricing acknowledges that museum visits are experience
goods: their value is only known after consumption. That makes paying at the end more
natural and potentially fairer.
How/why to price?
The article emphasizes that museums do not just have economic goals; they pursue multiple
objectives
Basic museum responsibilities (Noble's 1970 "Museum Manifesto"): collection,
conservation, study, exhibition, and communication. Pricing influences these, e.g. too many
visitors can harm conservation and reduce exhibition quality.
Economic goals: Museums often rely on subsidies, but they also need to raise revenue.
Pricing can help: Covering costs (admission, shops, restaurants), differentiating between
locals vs tourists, attracting donors (who often prefer low entry fees since their gifts are then
more visible).
Social/political goals: Public support often rests on museums being accessible and non-
elitist. Pricing can increase inclusivity, help educational efforts, and boost cultural prestige for
cities/nations.
So pricing is not just about efficiency (as in neoclassical economics), but about balancing a
portfolio of goals.
Market solution?
In theory, setting ticket prices at the equilibrium (where supply and demand meet) ensures
efficiency. Setting ticket prices at market equilibrium would mean that everyone who values
the museum visit at least as much as the equilibrium price gets access.
But museums also face issues of equity, overcrowding, and social goals, so they often
deviate from pure market equilibrium pricing.
4
