gives suggestions for future research
638: some statistics about size of film industry
640: “no major American industry ever operated with so little research of its market as did the motion picture industry during the period of its greatest influence, from its early years until the mid-1950s.”

PRODUCTION

The Success Rate of the Traditional “Green-Lighting” Process Can be Improved
641: “type II error”
“Type I errors, which involve rejecting a potentially successful project”

Studios Will Increasingly Pursue “Hit Franchises” Based on Established Intellectual Properties in an Effort to Reduce Risks
642: “In 2003, a major studio movie required nearly $64 million in production (“negative”) costs and another $40 million for prints and advertising costs”
“Managing increased costs with fewer potential investors has created a serious funding problem for major studios and independents alike.”
“It is increasingly important that the establishment of a movie franchise also seems advantageous in the home video window—sequels appear to have particularly strong DVD sales—and in ancillary windows such as video games and merchandising.”
643: “Studios’ eagerness to produce movie sequels, remakes, and movies based on properties established in other media—such as musicals, books, comics, old TV programs, and video games—is likely to continue.”

More Effective Portfolio Management Strategies Will Help Studios to Better Balance Risks and Returns
643: “2004d). Other portfolio dimensions include original versus familiar concepts (e.g., remakes and sequels), low versus high budget, in-house financing versus co-financing, track-record talent versus new creative talent, and acquisition versus in-house development.”
“co-financing helps soften release competition, particularly for high-budget movies.”

Conventional Contractual Arrangements with Talent Will Come Under Pressure
644: “Ravid (1999) finds no correlation between star participation and film revenues or profitability, which is consistent with the view that stars capture their “economic rent.”"

The Benefits of Digital Technology Will Change the Production Process but Not Lead to Fundamental Shifts in Power Structures
646: “”I can safely say that I’ll never shoot another fllm on film” (George Lucas)

THEATRICAL DISTRIBUTION

Box-Office Performance Will Increasingly Depend on a Small Number of Blockbusters
647: “Is blockbuster an ex-post or an ex-ante construct?”

Distributors Will Continue to Rely on High Advertising Budgets in Releasing Their Films, But Will Allocate Those Budgets Differently and More Evenly Across Media Vehicles
648: “overall spending on advertising by the studios and major independents was nearly $3.3 billion in 2003″
“all found evidence for a positive relationship between advertising and weekly or cumulative revenues.”
“the positive relationship between advertising expenditures and opening-week revenues is largely due to a second positive correlation between advertising expenditures and the screens allocated to a movie in its opening-week.”
“Television advertising, in particular in network TV, is the largest investment—it accounts for nearly 40% of total advertising budgets for new releases.”

Distributors’ Theatrical Release Timing Will Become an Increasingly Important Strategic Decision
649: “He finds that observed release patterns are closely aligned to observed patterns in sales, but not to the underlying demand. This implies that distributors could significantly increase their revenues by pushing some of their high-season releases to low-season dates.”
650: “Opportunities to save interest on investments, prevent piracy from cannibalizing revenues, and capitalize on the buzz that a movie has generated in the United States, all push distributors toward a simultaneous release strategy. But such practical considerations as the time it takes to subtitle the movie, the cost of additional prints, and the chance to learn from the U.S. performance and adjust marketing strategies for releases in other countries, all push distributors toward a sequential release strategy.”
“the time lag between releases moderates this relationship, which suggests that the buzz generated in the U.S. market may quickly wear out.”

Distributors Will Benefit from Shortening the Time between Theatrical and Nontheatrical Windows—But They Are Walking a Fine Line
650: “DVDs, which have become the largest revenue window, accounting for roughly $20 billion in 2003 – twice what is spent on U.S. theatrical tickets (Standard
& Poor’s 2004). In fact, it is widely believed that most movies do not break even until they are released on DVD.”
“Films are normally first distributed to the market that generates the highest revenues over the least amount of time. They then “cascade” in order of revenue contribution down to markets that return the lowest revenues per unit time. Historically, that has meant that theatrical release was followed by pay-cable programming, home video, network television, and finally local television syndication. But DVDs are capable of generating higher revenue than theatrical tickets over less time, as are other new technologies such as Pay Per View (PPV) and Video On Demand (VOD).”
651: “Focusing on the cable television industry, Chipty (2001) finds that [vertical] integration tends to exclude rivals but does not harm, and may actually benefit, consumers because of the associated efficiency gains.”
“How much do they value the social aspect of movie consumption?”
“Given that going to the theater is a different social experience than watching a movie at home, intense concerns about the substitutability of the theatrical window seems misplaced.”
“domestic theatrical releases have become “loss leaders” for a stream of other products that earn the lion’s share of revenues.”

The Benefits of Digital Technology Will Continue to Outweigh the Costs for Distributors—At Least for the Foreseeable Future
651: “piracy is widely regarded as the key threat to movie distributors’ business models.” But not to film itself!
“There is evidence that piracy is not the significant threat the entertainment industry believes it to be.”
652: “It is not known whether a dollar lost to piracy is one the distributors could have collected, e.g., in theater tickets or DVD sales.”
“How can the impact of movie piracy be quantified? How does it affect production and innovation?”
“Consumers, they fear, might perceive high-quality copies made directly from a digital version (e.g., a DVD screener) to be particularly good substitutes for legitimate DVDs. However, to our knowledge, there is not yet any empirical evidence for this view.”

EXHIBITION

652: “Practitioners consider the theatrical performance of a movie in the United States to be a critical driver of its success in subsequent release windows.”
“theater attendance in 2003 is at record levels in the United States and overseas.”

Is the U.S. Theatrical Motion Picture Market Still Overscreened?
653: “Many industry insiders have argued that, during the 1990s, and possibly later, the U.S. market has been “overscreened,” i.e., that the number of theater screens was too high for the number of movie-goers, their movie-going frequency, and the supply of movies. Some statistics support this hypothesis.”
“The exhibition industry responded by lowering the number of screens from its peak of 37,396 in 2000 to 36,764 in 2001,35,280 in 2002, and 35,786 in 2003.”
“His results suggest that theaters are often local monopolists, and that “business-stealing effects” across theaters are small and decrease significantly with distance, and that theaters are likely to underprovide movie screens relative to a socially optimal number.”
“One rule of thumb used in the industry is that when the estimated movie-going frequency is 5.5 movies per year per person, one screen for every 10,000 people is needed.”
“What determines the optimal level of screens? How will it be affected by changes in home consumption of movies and other leisure activities?”

The Exhibition Market Will Become More Concentrated, More Integrated (Through Mergers and Acquisitions), and New (More Sophisticated) Players Will Emerge

The Contractual Arrangements Between Distributors and Exhibitors Are Inefficient and Will Change—So Will Admission Pricing Strategies
654: “It has two components: an after house allowance (“nut”) split, and a guaranteed minimum (“floor”).”
“The exhibitor’s key power bases appear to be the total number of screens it owns, their location, and the relative shortage (or surplus) of screens available at the time, while the distributor’s key power bases appear to be the expected success of the particular movie and the amount of promotional support the distributor is willing to commit.”
655: “What is an “event” movie, and what sort of unique strategic considerations does it deserve?”

Exhibitors Seeking to Effectively Manage Their Business Will Face a Highly Complex Strategic Space
656: “variables such as movie attributes and advertising expenditures, typically assumed to influence audiences directly, mostly do so indirectly, through their impact on exhibitors’ screen allocations.”
“They showed that the exhibitor could have increased the theater’s profitability nearly 40% by running fewer movies for longer periods, and could have increased the facility’s profitability by over 120% by procuring movies from a larger set of movies running elsewhere in the country.”
“MOVIEMOD, is designed to generate box-office forecasts and to support the strategic release decisions (number and type of screens as well as advertising) for a new movie after the movie has been produced, but before its national release.”
“We can distinguish two different behavioral processes: (1) movie-first-theater-second, and (2) theater-flrst-movie-second. Theater circuits have begun efforts to induce more consumers to adopt the theater-first-movie-second heuristic.”
657: “How can movies’ attendance best be understood as a collective decision-making process?”
“What role do layout, design, and atmospheric marketing play on consumers’ enjoyment of the theatrical experience?”

The Costs of Digital Technology Will Continue to Outweigh the Benefits for Exhibitors—At Least for the Foreseeable Future

CONCLUSION

657f: “we believe that research on consumer movie-going behavior is critical in addressing many of our proposed research directions”
658: “What is the nature of the power structure in the industry? How has it changed over time? What are its key determinants? What role will each player have in the future? How can media conglomerates best manage their motion picture assets and businesses? How can they find synergies with other assets? Knowledge of these “bigger-picture” issues will not only be interesting in its own right, but will also help frame potential studies on the managerial issues we discuss.”
“Technological advances emerge as an important driver of the research avenues that we propose. Technology has always played a major role in the evolution
of the motion picture industry but today—more than in the past—technological developments seem to be integral to all stages of the value chain.”
“The digital age has just begun, and its ultimate effects on film production, theatrical distribution, and exhibition, and nontheatrical media such as television, video, the Internet, and mobile devices remain largely unknown. It therefore seems wise to take a broad research perspective on the motion picture industry.”
“Consumer behavior within the domain of motion pictures (in all their formats) is critical for the development of new metrics”

Search for ‘transmedia’ on its Google Books page.

47
Definition transmedia intertextuality:
“What I found [from recording Saturday morning children's TV] was a fairly consistent form of transmedia intertextuality, which positions young spectators (1) to recognize, distinguish, and combine different popular genres and their respective iconography that cut across movies, television, comic books, commercials, video games, and toys; (2) to observe the formal differences between television and its prior discourse of cinema, which it absorbs, parodies, and ultimately replaces as the dominant mode of image production; (3) to respond to and distinguish between the two basic modes of subject positioning associated respectively with television and cinema, being hailed in direct address by fictional characters or by offscreen voices, and being sutured into imaginary identification with fictional character and fictional space, frequently through the structure of the gaze and through the classical editing conventions of shot/reverse shot; and (4) to perceive both the dangers of obsolescence (as a potential threat to individuals, programs, genres, and media) and the values of compatibility with a larger system of intertextuality, whithin which formerly conflicting categories can be absorbed and restrictive boundaries erased.”

226?
“the pace of progress that markets demand or can absorb may be different from the progress offered by technology. This means that products that do not appear to be useful to our customers today (that is, disruptive technologies) may squarely address their needs tomorrow. Recognizing this possibility, we cannot expect our customers to lead us toward innovations that they do not now need. Therefore, while keeping close to our customers is an important management paradigm for handling sustaining innovations, it may provide misleading data for handling disruptive ones.”

227?
“Successful companies have a practiced capability in taking sustaining technologies to market, routinely giving their customers more and better versions of what they say they want. This is a valued capability for handling sustaining innovation, but it will not serve the purpose when handling disruptive technologies. If, as most successful companies try to do, a company stretches or forces a disruptive technology to fit the needs of current, mainstream customers—as we saw happen in the disk drive, excavator, and electric vehicle industries—it is almost sure to fail. Historically, the more successful approach has been to find a new market that values the current characteristics of the disruptive technology. Disruptive technology should be framed as a marketing challenge, not a technological one.”

“in many instances, the information required to make large and decisive investments in the face of disruptive technology simply does not exist. It needs to be created through fast, inexpensive, and flexible forays into the market and the product. The risk is very high that any particular idea about the product attributes or market applications of a disruptive technology may not prove to be viable. Failure and interactive learning are, therefore, intrinsic to the search for success with a disruptive technology. Successful organizations, which ought not and cannot tolerate failure in sustaining innovations, find it difficult simultaneously to tolerate failure in disruptive ones.”

“Although the mortality rate for ideas about disruptive technologies is high, the overall business of creating new markets for disruptive technologies need not be inordinately risky. Managers who don’t bet the farm on their first idea, who leave room to try, fail, learn quickly, and try again, can succeed at developing the understanding of customers, markets, and technology needed to commercialize disruptive innovations.”

“The evidence is quite strong that companies whose strategy is to extend the performance of conventional technologies through consistent incremental improvements do about as well as companies whose strategy is to take big, industry-leading technological leaps.”

“Perhaps the most powerful protection that small entrant firms enjoy as they build the emerging markets for disruptive technologies is that they are doing something that it simply does not make sense for the established leaders to do. Despite their endowments in technology, brand names, manufacturing prowess, management experience, distribution muscle, and just plain cash, successful companies populated by good managers have a genuinely hard time doing what does not fit their model for how to make money. Because disruptive technologies rarely make sense during the years when investing in them is most important, conventional managerial wisdom at established firms constitutes an entry and mobility barrier that entrepreneurs and investors can bank on. It is powerful and pervasive.”

Written very much from a traditional perspective. He does acknowledge the gigantic problems the film industry is facing, but he still tries to find a way out from the inside instead of from ground zero.

183-194
He basically just mentions that new business models are needed, but doesn’t give any advice.

187
“Ironically, it has been academic and journalistic work, research and non-film practitioners who have offered fresh thinking and added to the critical debate about the Internet and new business models.”

211
Out of the various theatrical windows, he says, only 2 will survive:

1. Theatrical release
2. Video-on-demand via the Internet

195
“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).”

195f
“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.”

196
“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).”

199f
“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.”

202
“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.“

Related to Starkey et al and Ebbers et al and Robins, J. A. 1993 and Storper, M. 1989 and Storper, M et al 1987 and Jones, C. 1996. Quote all together and mention that international phenomenon across film and TV (USA, UK, Germany at least)!

92

Business Consultant BS! Can’t read.

After industry and services we’re not moving towards information but experience => hence Experience Economy

4
Definition-entrepreneurship:
“Entrepreneurship is an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, processes, and raw materials through organizing efforts that previously had not existed (Venkataraman, 1997; Shane and Venkataraman, 2000).”

8
“the entrepreneurial process requires some form of innovation. By innovation, I do not mean that all entrepreneurial efforts require the grand Schumpeterian (1934) innovations that result in new combinations that spur creative destruction. [...] the entrepreneurial process can involve a type of innovation that is much milder, such as placing a restaurant on a different corner of an intersection from existing restaurants, or using different recipes or employees in a new restaurant in the same location as an old one. [for example Venkataraman, 1997] pointed out that this milder form of innovation is often associated with Kirznerian (1997), rather than Schumpeterian, entrepreneurial opportunities.
However, even Kirznerian opportunities involve innovation. By definition, entrepreneurship cannot involve the perfect imitation of what has been done before. The simple fact that it involves the recombination of resources into a new form according to the judgment of the entrepreneur means that entrepreneurship involves some innovative activity.”

10
“The conceptual framework that underlies this book is quite straightforward. Because the economy operates in a continual state of disequilibrium and change, situations arise in which people can transform resources into a form (new goods and services, new ways of organizing, new methods of production, new markets or new materials) that they believe will have greater value than their cost to create (Venkataraman, 1997). The entrepreneurial process begins with the perception of the existence of opportunities, or situations in which resources can be recombined at a potential profit. Alert individuals, called entrepreneurs, discover these opportunities, and develop ideas for how to pursue them, including the development of a product or service that will be provided to customers. These individuals then obtain resources, design organizations or other modes of opportunity exploitation, and develop strategies to exploit the opportunities.”

52
“a recent American Management Association study determined that no more than 10% of innovation investment at global companies is focused on developing new business models.”

52f
Definition-business model:
“A business model, from our point of view, consists of four interlocking elements that, taken together, create and deliver value. The most important to get right, by far, is the first.”

1. Customer value proposition (CVP). A successful company is one that has found a way to create value for customers – that is, a way to help customers get an important job done. By “job” we mean a fundamental problem in a given situation that needs a solution.
2. Profit formula. The profit formula is the blueprint that defines how the company creates value for itself while providing value to the customer.
3. Key resources. The key resources [not all, just the important ones] are assets such as the people, technology, products, facilities, equipment, channels, and brand required to deliver the value proposition to the targeted customer.
4. Key processes. Successful companies have operational and managerial processes that allow them to deliver value in a way they can successfully repeat and increase in scale.

53
“These four elements form the building blocks of any business. The customer value proposition and the profit formula define value for the customer and the company, respectively; key resources and key processes describe how that value will be delivered to both the customer and the company.”

54
“The most important attribute of a customer value proposition is its precision: how perfectly it nails the customer job to be done – and nothing else.”

56
“Rules, norms, and metrics are often the last element to emerge in a developing business model. They may not be fully envisioned until the new product or service has been road tested. Nor should they be. Business models need to have the flexibility to change in their early years.”

“Pursuing a new business model that’s not new or game-changing to your industry or market is a waste of time and money.”

58
“Creating a new model for a new business does not mean the current model is threatened or should be changed. A new model often reinforces and complements the core business [...].”

59
“Successful new businesses typically revise their business models four times or so on the road to profitability.”

“We recommend companies with new business models be patient for growth (to allow the market opportunity to unfold) but impatient for profit (as an early validation that the model works). A profitable business is the best early indication of a viable model.”

Bob Higgins: “”I think historically where we [venture capitalists] fail is when we back technology. Where we succeed is when we back new business models.”"