Jones, Candace
2006
From Technology to Content: The Shift in Dominant Logic in the Early American Film Industry

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“The history of cultural industries is littered with successful incumbents who, failing to see or respond to dramatic shifts in their competitive landscapes, were replaced by newcomers. In essence, cultural industries showcase how one dominant logic – the means and practices for achieving desired goals (Bacharach, Bamberger, & Sonnenstuhl, 1996; Prahalad & Bettis, 1986) - is replaced by another dominant logic. For example, early technology firms, which dominated the film industry from 1895 to 1911, dismissed the importance of films containing stories and stars, only to be replaced by content firms that focused on stories and stars and attracted larger audiences (Jones, 2001).”

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“In short, dominant players were unable to see the value of resources and alternative strategies that newer entrants brought into the industry and how these resources and strategies shifted the basis of competitive advantage.”

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“Why is it that dominant players are unable to see and adapt to shifts in their environments, opening the door for new players who eventually replace them? Manage- rial attention is a scarce resource (Ocasio, 1997), creating competitive blindspots or judgmental mistakes (Zajac & Bazerman, 1991), when attention is restricted to existing competitors and practices. Two conditions are likely to focus incumbents’ managerial attention on existing resources and practices: intense rivalry among dominant firms and shared career backgrounds of top decision makers.”

“The more similar the dominant players’ backgrounds, the more likely they are to interact in industry forums, build overlapping social networks, and develop taken-for-granted rules of competition, creating an industry macroculture that may be maladaptive (Abrahamson & Fombrun, 1994). When tacit rules are shared among dominant players, alternatives are neither seen nor imagined (Scott, 1995).”

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“Because immigrants did not share a common language (the three largest immigrant groups came from Germany, Russia, and Italy), they needed an easily understandable form of story telling, which is a narrative.”

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“Technology entrepreneurs did not at- tend sufficiently to content entrepreneurs until they competed head to head as producers, moving into greater resource similarity (Chen, 1996).”

“When entrepreneurs and top decision makers restrict their focus of attention to either technology or content, this provides an opportunity for smaller or newer competitors to exploit this restricted focus of attention. Ironically, the bit player among the content firms was Warner Brothers, who by developing sound technology in 1927 revolutionized and consolidated its place in the film industry.”

“In today’s media environment, technology and content are finding new ways in which they may live off of and extend one another, requiring that top decision makers attend to both technology and content.“