Building Knowledge about the Consumer: The Emergence of Market Research in the Motion Picture Industry

Bakker, Gerben

doi:10.1080/713999299

Cited by 33 publications

(17 citation statements)

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“…This meant that the cinema-owner kept their marginal gross profits themselves, and the distributors did the same. This made the profit incentive for the film producer small: a good film would lead to some more sales at higher prices to more distributors, but the distributors and cinemas would get all the marginal profits (Bakker 2003). This circumstance drove vertical integration in the industry, with producers often integrating with distributors, the latter sometimes with cinemas, and films increasingly being rented for a percentage of revenue rather than sold outright.…”

Section: Ivb Marginal Revenues Are Marginal Profitsmentioning

confidence: 99%

Sunk Costs and the Dynamics of Creative Industries

Bakker¹

2013

Oxford Handbooks Online

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This chapter examines the long-run evolution of modern entertainment industries such as the film and music industries. It investigates ways to conceptualise and quantify the subsequent waves of creative destruction, and investigates specifically how sunk costs affect the evolution of the industry through its interaction with variety, market integration, product differentiation and price discrimination, and how old entertainment formats almost never became extinct. It finds that within this framework, four economic tendencies shaped the entertainment industries evolution: first, endogenous sunk costs often led to a competitive escalation of production expenditures, which we call 'quality races', which increased industrial concentration. Second, the fact that marginal revenues largely equalled marginal profits led to extreme vertical integration through ownership or revenue-sharing contracts, as well as to an oversupply of variety and a dual market structure with high-concept blockbuster products and low-budget niche products. Third, entertainment's public good characteristics led to substantial income inequality among creative inputs and business models optimising exclusion possibilities in the value chain. Finally, the project-based character of entertainment production implied large intra-and inter-industry agglomeration benefits and often led to geographical concentration. Dynamic product differentiation allowed various old formats to survive the waves of creative destruction, albeit in much smaller incarnations.

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Section: Ivb Marginal Revenues Are Marginal Profitsmentioning

confidence: 99%

Sunk Costs and the Dynamics of Creative Industries

Bakker¹

2013

Oxford Handbooks Online

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“…Concerning the supply understood as those movies released rather than movie projects started we can expect that distributors reacted on their expectation of consumer demand. Bakker (2003) describes that from 1914 to 1964, US producers changed the content of their films according to changes in consumer sentiment: "During the Depression, films portraying big business and wealth positively gave way to films criticizing big business and being slightly more inclusive towards women and minorities. Despite their reliance on Wall Street capital and a draconian Production Code, the studios had to adapt their films to consumer preferences or go under" (Bakker, 2003: 105).…”

Section: Literature Review Supplymentioning

confidence: 99%

It’s not the economy, stupid! External effects on the supply and demand of cinema entertainment

Rimscha

2012

J Cult Econ

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The paper addresses whether the state of the economy impacts the supply of and demand for cinema entertainment. A literature review on the drivers of cinema supply and demand is provided, and two competing hypotheses are extracted. Economic downturns could either lead to a sober mood and drive the interest in serious genres or drive the need for distraction leading to an increased interest in feelgood or action movies. However, characteristics of the movie industry suggest that economic key factors have only limited effects on supply and demand. A time series analysis of supply and demand in three major European markets indicate that demand is unrelated to the state of the economy. In aggregate, the demand does not instruct supply. Fluctuations in individual movie quality superpose potential effects of the economic context on the aggregated demand. Simultaneously, a focus on film as art superposes potential effects of the economic context on the supply. AbstractThe paper addresses whether the state of the economy impacts the supply of and demand for cinema entertainment. A literature review on the drivers of cinema supply and demand is provided, and two competing hypotheses are extracted. Economic downturns could either lead to a sober mood and drive the interest in serious genres or drive the need for distraction leading to an increased interest in feel-good or action movies. However, characteristics of the movie industry suggest that economic key factors have only limited effects on supply and demand. A time series analysis of supply and demand in three major European markets indicate that demand is unrelated to the state of the economy. In aggregate, the demand does not instruct supply. Fluctuations in individual movie quality superpose potential effects of the economic context on the aggregated demand. Simultaneously, a focus on film as art superposes potential effects of the economic context on the supply.

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“…Risk might also be reduced by adjusting a story to the audience demand using market research techniques focusing on familiarity. Although market research has a long tradition in Hollywood (Bakker, 2003), it is not very popular among producers, especially those who consider films as artistic venture (Handel, 1953). Market research for experiential goods like movies demand the product to be all but completed, thus it is used predominantly in the distribution phase (Yoder, 2004).…”

Section: Reducing Risksmentioning

confidence: 99%

Managing Risk in Motion Picture Project Development

Rimscha

2009

Journal of Media Business Studies

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Movies are produced as unique prototypic media content to serve a highly uncertain demand. Film producers have to address the consumption risk while their projects are still in their development phase. This paper provides a literature review of key risk dimensions of movie projects and how to control them. The interviews conducted with movie producers have made it possible to compare the industry's risk control strategies. Content attributes, personnel, and funding emerge as key project resources and risk reducing elements both in theory and practice. Three distinct risk control strategies are identified and assigned to different resource configurations and market constraints of individual producers. Managing Risk in Motion Picture Project Development M. Bjørn von RimschaUniversity of Zurich ABSTRACT Movies are produced as unique prototypic media content to serve a highly uncertain demand. Film producers have to address the consumption risk while their projects are still in their development phase. This paper provides a literature review of key risk dimensions of movie projects and how to control them. The interviews conducted with movie producers have made it possible to compare the industry's risk control strategies. Content attributes, personnel, and funding emerge as key project resources and risk reducing elements both in theory and practice. Three distinct risk control strategies are identified and assigned to different resource configurations and market constraints of individual producers.KEY WORDS: project management, project selection, movie producer, industry structure, project resources This paper focuses on the development phase of movie production in which projects are selected rather than on movie distribution; it concentrates on producers developing a movie package rather than production companies building a portfolio of several movie projects.

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Building Knowledge about the Consumer: The Emergence of Market Research in the Motion Picture Industry

Cited by 33 publications

References 1 publication

Sunk Costs and the Dynamics of Creative Industries

Sunk Costs and the Dynamics of Creative Industries

It’s not the economy, stupid! External effects on the supply and demand of cinema entertainment

Managing Risk in Motion Picture Project Development

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