Innovation in the Application of Digital Tools for Managing Uncertainty: The Case of UK Independent Film

Abstract

This research investigates innovation in how film producers use social digital tools to engage consumers, reduce demand uncertainty and respond to the challenge of digital disruption that affects the traditional film value chain. Through three empirical case studies of film production and exploitation, we examine examples of innovation in product, service, distribution, marketing and process, each having important implications at the organizational level. Our findings show that innovations in one area have important implications for other areas, distribution impacting on concepts of product and service, for example. We also show that internal firm micro-process dynamics impact directly on external interactions between the firm, consumers en masse and partner firms. Our research thus lies at the nexus of innovation, social media and uncertainty management, and questions the boundaries found in innovation 'types' or dominant taxonomies in traditional R&D frames. *This work was supported by the Economic and Social Research Council Capacity Building Cluster Grant RES 187-24-0014Introduction Film production is facing increasing challenges caused by declining revenues from DVD and TV rights exploitation. Digital tools, applied in new marketing and distribution models, form innovative strategic responses to major threats to film businesses caused by digital disruption (UKFC, 2010). These interventions, however, occur far earlier in the product life cycle and are undertaken by different parties than has traditionally been the case and can be seen as the active management of consumer demand uncertainty (Miller & Shamsie, 1999;Dempster, 2006). We ask how social digital tools are applied to manage uncertainty in the UK film business and adopt an empirical case study approach to investigate this. In doing so, we address a gap in the literature at the nexus of innovation, social media and uncertainty management in a specific creative industry, film. Whilst Dempster (2006) explores risk and uncertainty management in theatre and Sgourev (2012) deals with risk and innovation in opera, the specific 'spreadable' nature of digital media (Jenkins, Ford & Green, 2012) has not been explored in an innovation context for managing uncertainty in this setting.

Creativity and Innovation: State of the Art and Future Perspectives for Research

“…Because methods and tools are deeply contingent to the context of their application and are empirically based rather than theoretically driven, case studies focusing on the specific creativity practices are necessary to explore the complexity of the processes in place. Thus, through case studies, researchers have explored the use of serious games (Agogué, Levillain, & Hooge, 2015), software design (Arrighi, Le Masson, & Weil, 2015), and manual modeling (Schulz, Geithner, Woelfel, & Krzywinski, 2015) of digital tools (Franklin, Searle, Stoyanova, & Townley, 2013 to cite a few very recent published works in 2015).…”

Appropriating value: on the relationship between business models and intellectual property

“…Within independent film production, as the industry is trying to compensate for declining revenues from DVD and TV rights exploitation, social digital tools have shaped the way organisations engage with users, manage demand uncertainty and respond to the challenges of digital disruption. 87 Digitals tools are appropriated to challenge the orthodoxies of the film value chain, for instance, disintermediating the traditionally geographic and sequential distribution of analogue film products with immediate and global digital distribution, and facilitating new marketing and distribution models, e.g. linking multiplatform content, social media and distribution services to build consumer demand for the film itself.…”

The Early Bird Gets the Worm, But the Second Mouse Gets the Cheese: Non‐Technological Innovation in Creative Industries

“…For small, entrepreneurial firms in CIs, non‐technological, organizational innovation is a unique source of potential value (Potts, ; Miles & Green, ; Abecassis‐Moedas et al., ; Stierand, Dörfler & MacBryde, ). For example, Franklin and colleagues () contend that innovation through internally developed projects (as opposed to externally driven R&D initiatives) helps creative firms to reduce demand uncertainty and respond to market disruption. Also, Castañer and Campos () stressed the relationship between organizational innovation dynamics and artistic innovation.…”

“…Studies on innovation in CIs highlight their reliance on non‐technological, organizational sources of innovation, particularly business model innovation (hereinafter, BMI) and management innovation (hereinafter, MI) (Franklin et al., ). BMI is a systematic way of defying conventional ways of doing business by the core business elements and their interrelationships, including the operational, financial and marketing model or the value proposition (Markides, ; Chesbrough, ).…”