Exam notes
Date @October 19, 2023
Last edit @October 25, 2023 9:04 PM
Week 1
Peltoniemi (2015), Cultural industries: product-market
characteristics, management challenges and industry
dynamic
Cultural industries → those that produce experience goods with considerable creative
elements and aim these at the consumer market via mass distribution
2 features specific to cultural industries:
consistent oversupply of creative labour
extreme uncertainty of success potential
→ System of continuous overproduction, where gatekeepers restrict access to cultural
products to audiences
Cultural industries definitions
Exam notes 1
, cultural goods offer low level of utilitarian value and high level of aesthetic,
symbolic, social meaning and social display value
cultural goods are experiential, so prior to consumption, you don’t know if the
good will succeed in bringing you the entertainment/enjoyment you seek
innovation plays an important role since it does not aim to improve performance
but to constantly introduce different types of goods to please diverse tastes
Sources of revenue in the creative industries:
selling the creative good
advertising goods of other producers
subsidies
other types of support for what we are because we are that (grants from
foundations, corporate sponsorships, loyalty programs)
revenues for the creative/cultural goods we offer or for other goods we offer on
the side (shops, restaurants)
Product market characteristics
Taste and popularity
4 interrelated assumptions made in cultural industries research concerning demand:
cultural goods are experiential and consumers desire novelty
most cultural industries operate under increasing returns
there is extreme variance in sales so products divert into hits and misses
demand is unpredictable in the extreme so it’s impossible to identify hits in
advance
Taste → the preferences customers report
upper classes have more highbrow taste, lower class have more popular tastes
acquired taste rather than pre-existent (heritable)
can be determined by nostalgia effect
gender bias towards male artists (by male consumers)
Exam notes 2
, musical preferences based on: psychological arousal, self-reflection,
communication and coming together with like-minded people
→ source of unpredictability doesn’t necessarily lie in taste but more so how information
diffuses among consumers and the uncertain outcomes of production process
Popularity → sale distribution of cultural industry goods
sales result from information cascades to others and (influential) consumer’s
intention to purchase
signals can be a factor in sales prediction (superstars in films) but it’s not always
the case
sales are determined by balance between novelty and familiarity + innovation
sales determined by distribution and timing in relation to season
3 reasons for unpredictability of demand:
lack of correlation between popularity and quality
assumption that friends have similar tastes (debunks information cascades)
are more familiar products less sensitive to information cascades?
Gatekeeping
filtering systems required to reduce the number of products reaching markets
Upstream selectors
determine if products reach completion (large generalists, small specialists)
artists pre-selected by specialists are slower to succeed but success lasts
longer than if selected by generalists
selection are based on artist conforming to genre and creative prototype,
good reputation, but not imitation of others
large ad budget increase sales and ROI but depends on product
Downstream selectors
determine if finished product reaches an audience
positive critical reviews increase sales (usually for greater, less familiar
highbrow art goods)
Exam notes 3
, negative reviews influence consumer expectations more but positive reviews
influence sales more
awards shown to increase sales
lay critics more influential for niche products but people interested in varied
genres listen to lay and professional critics
two way relationship between critic and consumer tastes can influence
consumer demand
Management challenges
Art for art’s sake and art for profit
creative individuals need to conform simultaneously to both artistic and financial
logistics in cultural production to enable creative outcomes and financial success
artists value a combination of artistic freedom and financial awards
managers and corporations have ability to both redirect and block creative
activity (determine artist’s range of option)
experimentation is often less successful early on and improves with tenure
Creative labour
inferior working conditions → permanent oversupply of creative labour,
employment in cultural industries often means low wages, long working hours
and job insecurity
formal training does not guarantee financial success but artists still pursue it
paid less, suffer from stress and anxiety, poor employment relationships
copyright legislation of major companies may affect degree of creativity in
market
work allocation → importance of informal networks
repeated collaboration allows creatives to exploit and stretch existing
capabilities
success is predicted by contracts rather than talent (notorious for gender
inequality and discrimination)
Industry dynamics
Cultural industries as communities
Exam notes 4
Date @October 19, 2023
Last edit @October 25, 2023 9:04 PM
Week 1
Peltoniemi (2015), Cultural industries: product-market
characteristics, management challenges and industry
dynamic
Cultural industries → those that produce experience goods with considerable creative
elements and aim these at the consumer market via mass distribution
2 features specific to cultural industries:
consistent oversupply of creative labour
extreme uncertainty of success potential
→ System of continuous overproduction, where gatekeepers restrict access to cultural
products to audiences
Cultural industries definitions
Exam notes 1
, cultural goods offer low level of utilitarian value and high level of aesthetic,
symbolic, social meaning and social display value
cultural goods are experiential, so prior to consumption, you don’t know if the
good will succeed in bringing you the entertainment/enjoyment you seek
innovation plays an important role since it does not aim to improve performance
but to constantly introduce different types of goods to please diverse tastes
Sources of revenue in the creative industries:
selling the creative good
advertising goods of other producers
subsidies
other types of support for what we are because we are that (grants from
foundations, corporate sponsorships, loyalty programs)
revenues for the creative/cultural goods we offer or for other goods we offer on
the side (shops, restaurants)
Product market characteristics
Taste and popularity
4 interrelated assumptions made in cultural industries research concerning demand:
cultural goods are experiential and consumers desire novelty
most cultural industries operate under increasing returns
there is extreme variance in sales so products divert into hits and misses
demand is unpredictable in the extreme so it’s impossible to identify hits in
advance
Taste → the preferences customers report
upper classes have more highbrow taste, lower class have more popular tastes
acquired taste rather than pre-existent (heritable)
can be determined by nostalgia effect
gender bias towards male artists (by male consumers)
Exam notes 2
, musical preferences based on: psychological arousal, self-reflection,
communication and coming together with like-minded people
→ source of unpredictability doesn’t necessarily lie in taste but more so how information
diffuses among consumers and the uncertain outcomes of production process
Popularity → sale distribution of cultural industry goods
sales result from information cascades to others and (influential) consumer’s
intention to purchase
signals can be a factor in sales prediction (superstars in films) but it’s not always
the case
sales are determined by balance between novelty and familiarity + innovation
sales determined by distribution and timing in relation to season
3 reasons for unpredictability of demand:
lack of correlation between popularity and quality
assumption that friends have similar tastes (debunks information cascades)
are more familiar products less sensitive to information cascades?
Gatekeeping
filtering systems required to reduce the number of products reaching markets
Upstream selectors
determine if products reach completion (large generalists, small specialists)
artists pre-selected by specialists are slower to succeed but success lasts
longer than if selected by generalists
selection are based on artist conforming to genre and creative prototype,
good reputation, but not imitation of others
large ad budget increase sales and ROI but depends on product
Downstream selectors
determine if finished product reaches an audience
positive critical reviews increase sales (usually for greater, less familiar
highbrow art goods)
Exam notes 3
, negative reviews influence consumer expectations more but positive reviews
influence sales more
awards shown to increase sales
lay critics more influential for niche products but people interested in varied
genres listen to lay and professional critics
two way relationship between critic and consumer tastes can influence
consumer demand
Management challenges
Art for art’s sake and art for profit
creative individuals need to conform simultaneously to both artistic and financial
logistics in cultural production to enable creative outcomes and financial success
artists value a combination of artistic freedom and financial awards
managers and corporations have ability to both redirect and block creative
activity (determine artist’s range of option)
experimentation is often less successful early on and improves with tenure
Creative labour
inferior working conditions → permanent oversupply of creative labour,
employment in cultural industries often means low wages, long working hours
and job insecurity
formal training does not guarantee financial success but artists still pursue it
paid less, suffer from stress and anxiety, poor employment relationships
copyright legislation of major companies may affect degree of creativity in
market
work allocation → importance of informal networks
repeated collaboration allows creatives to exploit and stretch existing
capabilities
success is predicted by contracts rather than talent (notorious for gender
inequality and discrimination)
Industry dynamics
Cultural industries as communities
Exam notes 4
