CULTURAL INDUSTRIES EXAM NOTES
Week 1 - Lecture
Analyzing the creative and cultural industries
Modeling the cultural industries (Throsby, 2008)
- Concept of cultural industries rooted in why a product is valued by consumers, opposed to
product’s utilitarian or material characteristics
- Understanding of dynamics of consumption rather than dynamics of production
- What makes a group of companies a cultural industry is that their products compete in the
symbolic realm rather than competing on some sort of material characteristics
- Practice of consumption not production that is important in defining the boundaries of the
cultural industries
- Article discusses definition of cultural industries, the boundaries of cultural industries, and
examines six tools for economic analysis that can be applied to cultural industries
- Cultural goods and services
- Valued by those who make them and those who consume them for social and cultural
reasons, likely to complement or transcend a purely economic evaluation
- Creative goods and services
- Require some significant level of creativity in their manufacturing without necessarily
satisfying other criteria that would enable them to be labelled cultural; can extend far beyond
cultural goods
- Cultural industries
- Industries that combine the creation, production, and commercialization of contents which
are intangible or cultural in nature (UNESCO), i.e. artworks, music, literature, film, tv
programs, video games
- Input of human creativity in production, symbolic messages, more than utilitarian as they
serve an additional communicative purpose, contain some intellectual property
- Creative industries
- Industries which have their origin in individual creativity, skill and talent, have potential for
wealth and job creation through the generation and exploitation of intellectual property
- Input of human creativity in production, take form of goods and services, predominantly
commercial
- Is a distinction between cultural and creative industries important? Wh or why not?
- Different emphasis on defining the industries leads to different construction of different
models and cultural production sector of the economy
- 2013: cultural and creative industries generated 3% of the world’s GDP, employed 29 million
people
- Therefore importance of definition core group of what is a creative and a cultural industry to
know direct output contributions, direct employment contributions, and policy implications
- Prediction of catastrophical impact on cultural and creative industries due to Covid-19
,- Six economic approaches to analyzing the cultural industries
- (1) Industrial organization theory
- Focus on standard economic variables such as value of production, levels of employment,
and business concentration
- Looks at organizational characteristics of markets with emphasis on market concentration
(seller and buyer concentration), nature of product differentiation, and barriers for entry
and exit of companies
- Also how industries behave in setting prices, marketing, degree of competition, and how
efficiently companies adjust to effective demands
- Relevant to models oriented towards commercial production of cultural goods/services
- (2) Value chain analysis
- Looks at creative ideas and how they are combined with other inputs to produce a creative
good or service
- Production chain with value adding stages from initial idea, production of goods and
services, their marketing and distribution, until consumption
- Research and development (creation); production (artist); marketing (dissemination);
distribution (exhibition); sales (consumption)
- Used by companies to analyze performance in different stages of the production cycle
- (3) Inter-industry analysis
- Focus on how output is produced and distributed in the economy; offers better
understanding of direct and indirect effects on industry, consumers, and governments
- 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
- Used to evaluate the economic impact of cultural policy
- (4) Locational analysis
- Companies in certain industries tend to form clusters in urban and regional settings
- Benefit from being located close to other companies in the same or similar industries (e.g.
Hollywood)
- Used by governments to attract companies and develop cultural industries clusters
- (5) Contract theory and property rights
- Identifying property rights as basis for contractual arrangements that can be explained by
the uniqueness of cultural industries
- ‘Nobody knows’, i.e. uncertainty of demand
- ‘Art for art’s sake’, i.e. irrational labor market due to passion for art
- ‘Infinite variety’, i.e. all products are more or less differentiated
- ‘Durability’, i.e. ability to yield monetary compensations over a long period
- Particularities used by companies to develop optima contracts with (value chain) partners
- (6) Trade and development
- Theory of competitive advantage to explain specialization of production in different
countries and advocate the elimination of trade distorting measures (import tariffs, quotas)
- Assertion: free trade maximizes world welfare
, - Cultural industries presented challenge as cultural goods are more than just commercial
merchandise rather vehicles of transmission of cultural value
- Used to explain specialization of countries and to eliminate trade barriers
An Individual Business Model in the Making: a Chef’s Quest for Creative Freedom (Svejnova,
Planellas & Vives, 2010)
- Renewal or change in a business model is needed, can provide finer-grained information into its
core benefits (business model as tool for company’s logic for creating and capturing value)
- Examples of business models
- Fractionalization business model: organization can sell entire product or cut it in pieces and
sell each piece as a product separately (e.g. pizzeria can sell whole pizza or a slice)
- Razor and blades business model: one item is sold at low price to increase sales of a
complimentary good (e.g. video game console, only useful with games and accessories)
- Subscription business model: charges customer regular payments in exchange for access to
products or services for a set period of time (e.g. Netflix)
- Article demonstrates that business models have significance and usefulness when extended to
individual level; are organizational devices that reveal a company’s logic for creating and
capturing value; are useful in identifying triggers and mechanisms associated with changes
- Business model
- Consists of content, structure, and governance of transactions designed to create value
through the exploitation of business opportunities
- Useful tool that enhances the understanding, labeling, and classification of a company’s
operation
- Organizational device that reveals the logic of creating and capturing value that reveals the
organization’s approach to renewal
- Ferran Adria’s business model
- Chef, owner of Restaurat “El Bulli”, 3 Michelin stars, world’s 100 most influential citizens
- Adria’s ongoing quest for creative freedom as main trigger, led to persistence
- Period 1: employee, pre-stage of business model, capturing value by accumulating
knowledge and expertise; quest for authenticity as driver
- Period 2: owner, manager, shifting value proposition by developing own style and brand of
equity, value created are new techniques and concepts; quest for recognition as driver
- Period 3: entrepreneurship, evolution, value created originated from creativity workshop;
quest for influence as driver
- Period 4: leader, push limits of cuisine connecting it to science, art, and society, value
created by bridging worlds of art and cuisine to create new culinary language
- Two cycles that led to Adria’s business model transformation
- Change mechanisms
- Main mechanism: creative response (introduction of changes beyond the existing range of
accepted practices)
- Other mechanisms at different intensities across periods allow transformation within and
across various periods: chef’s alertness to opportunities, strategic intent beyond current
Week 1 - Lecture
Analyzing the creative and cultural industries
Modeling the cultural industries (Throsby, 2008)
- Concept of cultural industries rooted in why a product is valued by consumers, opposed to
product’s utilitarian or material characteristics
- Understanding of dynamics of consumption rather than dynamics of production
- What makes a group of companies a cultural industry is that their products compete in the
symbolic realm rather than competing on some sort of material characteristics
- Practice of consumption not production that is important in defining the boundaries of the
cultural industries
- Article discusses definition of cultural industries, the boundaries of cultural industries, and
examines six tools for economic analysis that can be applied to cultural industries
- Cultural goods and services
- Valued by those who make them and those who consume them for social and cultural
reasons, likely to complement or transcend a purely economic evaluation
- Creative goods and services
- Require some significant level of creativity in their manufacturing without necessarily
satisfying other criteria that would enable them to be labelled cultural; can extend far beyond
cultural goods
- Cultural industries
- Industries that combine the creation, production, and commercialization of contents which
are intangible or cultural in nature (UNESCO), i.e. artworks, music, literature, film, tv
programs, video games
- Input of human creativity in production, symbolic messages, more than utilitarian as they
serve an additional communicative purpose, contain some intellectual property
- Creative industries
- Industries which have their origin in individual creativity, skill and talent, have potential for
wealth and job creation through the generation and exploitation of intellectual property
- Input of human creativity in production, take form of goods and services, predominantly
commercial
- Is a distinction between cultural and creative industries important? Wh or why not?
- Different emphasis on defining the industries leads to different construction of different
models and cultural production sector of the economy
- 2013: cultural and creative industries generated 3% of the world’s GDP, employed 29 million
people
- Therefore importance of definition core group of what is a creative and a cultural industry to
know direct output contributions, direct employment contributions, and policy implications
- Prediction of catastrophical impact on cultural and creative industries due to Covid-19
,- Six economic approaches to analyzing the cultural industries
- (1) Industrial organization theory
- Focus on standard economic variables such as value of production, levels of employment,
and business concentration
- Looks at organizational characteristics of markets with emphasis on market concentration
(seller and buyer concentration), nature of product differentiation, and barriers for entry
and exit of companies
- Also how industries behave in setting prices, marketing, degree of competition, and how
efficiently companies adjust to effective demands
- Relevant to models oriented towards commercial production of cultural goods/services
- (2) Value chain analysis
- Looks at creative ideas and how they are combined with other inputs to produce a creative
good or service
- Production chain with value adding stages from initial idea, production of goods and
services, their marketing and distribution, until consumption
- Research and development (creation); production (artist); marketing (dissemination);
distribution (exhibition); sales (consumption)
- Used by companies to analyze performance in different stages of the production cycle
- (3) Inter-industry analysis
- Focus on how output is produced and distributed in the economy; offers better
understanding of direct and indirect effects on industry, consumers, and governments
- 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
- Used to evaluate the economic impact of cultural policy
- (4) Locational analysis
- Companies in certain industries tend to form clusters in urban and regional settings
- Benefit from being located close to other companies in the same or similar industries (e.g.
Hollywood)
- Used by governments to attract companies and develop cultural industries clusters
- (5) Contract theory and property rights
- Identifying property rights as basis for contractual arrangements that can be explained by
the uniqueness of cultural industries
- ‘Nobody knows’, i.e. uncertainty of demand
- ‘Art for art’s sake’, i.e. irrational labor market due to passion for art
- ‘Infinite variety’, i.e. all products are more or less differentiated
- ‘Durability’, i.e. ability to yield monetary compensations over a long period
- Particularities used by companies to develop optima contracts with (value chain) partners
- (6) Trade and development
- Theory of competitive advantage to explain specialization of production in different
countries and advocate the elimination of trade distorting measures (import tariffs, quotas)
- Assertion: free trade maximizes world welfare
, - Cultural industries presented challenge as cultural goods are more than just commercial
merchandise rather vehicles of transmission of cultural value
- Used to explain specialization of countries and to eliminate trade barriers
An Individual Business Model in the Making: a Chef’s Quest for Creative Freedom (Svejnova,
Planellas & Vives, 2010)
- Renewal or change in a business model is needed, can provide finer-grained information into its
core benefits (business model as tool for company’s logic for creating and capturing value)
- Examples of business models
- Fractionalization business model: organization can sell entire product or cut it in pieces and
sell each piece as a product separately (e.g. pizzeria can sell whole pizza or a slice)
- Razor and blades business model: one item is sold at low price to increase sales of a
complimentary good (e.g. video game console, only useful with games and accessories)
- Subscription business model: charges customer regular payments in exchange for access to
products or services for a set period of time (e.g. Netflix)
- Article demonstrates that business models have significance and usefulness when extended to
individual level; are organizational devices that reveal a company’s logic for creating and
capturing value; are useful in identifying triggers and mechanisms associated with changes
- Business model
- Consists of content, structure, and governance of transactions designed to create value
through the exploitation of business opportunities
- Useful tool that enhances the understanding, labeling, and classification of a company’s
operation
- Organizational device that reveals the logic of creating and capturing value that reveals the
organization’s approach to renewal
- Ferran Adria’s business model
- Chef, owner of Restaurat “El Bulli”, 3 Michelin stars, world’s 100 most influential citizens
- Adria’s ongoing quest for creative freedom as main trigger, led to persistence
- Period 1: employee, pre-stage of business model, capturing value by accumulating
knowledge and expertise; quest for authenticity as driver
- Period 2: owner, manager, shifting value proposition by developing own style and brand of
equity, value created are new techniques and concepts; quest for recognition as driver
- Period 3: entrepreneurship, evolution, value created originated from creativity workshop;
quest for influence as driver
- Period 4: leader, push limits of cuisine connecting it to science, art, and society, value
created by bridging worlds of art and cuisine to create new culinary language
- Two cycles that led to Adria’s business model transformation
- Change mechanisms
- Main mechanism: creative response (introduction of changes beyond the existing range of
accepted practices)
- Other mechanisms at different intensities across periods allow transformation within and
across various periods: chef’s alertness to opportunities, strategic intent beyond current
