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.”

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

1
“Anthropologists tell us that storytelling is central to human existence. That it’s common to every known culture. That it involves a symbiotic exchange between teller and listener – an exchange we learn to negotiate in infancy. Just as the brain detects patterns in the visual forms of nature – a face, a figure, a flower – and in sound, so too it detects patterns in information. Stories are recognizable patterns, and in those patterns we find meaning. We use stories to make sense of our world and to share that understanding with others. They are the signal within the noise.”

2
“Every new medium has given rise to a new form of narrative.”

3
Definition deep media:
“Under its [the Net's] influence, a new type of narrative is emerging – one that’s told through many media at once in a way that’s nonlinear, that’s participatory and often gamelike, and that’s designed above all to be immersive. This is “deep media”: stories that are not just entertaining, but immersive, taking you deeper than an hour-long TV drama or a two-hour movie or a 30-second spot will permit. This new mode of storytelling is transforming not just entertainment (the stories that are offered to us for enjoyment) but also advertising (the stories marketers tell us about their products) and autobiography (the stories we tell about ourselves).”

8
“We can see the outlines of a new art form, but its grammar is as tenuous and elusive as the grammar of cinema a century ago.”

21
“At the end of the meeting [with Jordan Weisman], [Kathleen] Kennedy called the head of marketing at Warner Bros., which was making the picture [A.I.]. As Weisman recalls it, she made an announcement: ‘I’m sending Jordan over. I want you to write him a very big check. And don’t ask what it’s for.’
‘It’s good to be kind,’ Weisman remarked when the call was over.
‘Yes,’ she said, ‘it is.’”

27
Trent Reznor’s Year Zero entarch was “‘the world’s most elaborate album cover,’ he said, ‘using the media of today.’”

32
“Where earlier forms of literature had been expected to hew to history, myth, or legend, novels were judged by their ‘truth to individual experience,’ as the critic Ian Watt put it.” (Watt, Ian; 1957; The Rise of the Novel)

43
“At expos like Comic Ichi and Super Comic City, thousands of amateurs sell slickly produced, self-published manga in which well-known characters express forbidden desires and otherwise behave in clear violation of intellectual property laws. Yet commercial publishers show no inclination to send out their copyright attorneys and shut the markets down. Instead they’ve learned to look the other way, because thy know that the fervor these fan-created manga generate can only lead to increased sales for everyone.”

67
“McDonald’s, Coca-Cola – these were the deals the people at Fox could understand. The Ubisoft game was not.”

68-75
He describes the difference between Star Wars set up as a franchise and entarch – and how it became more entarch-like in the late eighties (72-73). Essentially, in the beginning everybody who owned a piece of the franchise did whatever they wanted – novel ghost written by somebody in the name of Lucas; Marvel created Jaxxon, a giant rabbit as an homage to Bugs Bunny (68); Luke Skywalker getting affectionate with twin sister Princess Leia (71) – while later Lucas took control and a bible was created.
-> It’s still not entarch (weak glue), but getting closer.

69
Star Wars movies generated USD 4 bn box office income. The franchise as a whole USD 15 bn.

73
“In addition to not contradicting the movies or each other, the new stories had to adhere to the core precepts of Star Wars: the struggle between good and evil, the role of mysticism and spirituality, the focus on family relationships, mythic depth beneath an apparently simple story. Working with a team of in-house editors, [Howard] Roffman set the story arcs and decided, in consultation with Lucas, whether major characters would live or die.”
-> Two EAs!

74
“In Star Wars, a Holocron is a repository of mystical Jedi knowledge. In real life, it’s a FileMaker database that [Leland] Chee maintains as Lucasfilm’s ultimate internal reference. Chee’s Holocron contains more than 30,000 entries coded for levels of canonicity, with the highest level – “G” for George – standing as the word of God.”
-> Entarch Bible with George as EA!

75
“Somewhere along the way, Lucas himself has been left behind. In December 2008, when Del Rey published The Complete Star Wars Encyclopedia – a three-volume, 1,224-page boxed set – Roffman gave it to him and joked that he probably didn’t know 60 percent of what was in there. Lucas may have created Star Wars, but even he had to admit to Roffman that the fans own it now [figuratively].

87
“there’s nothing inherent in humans that makes them want to be passive consumers of entertainment, or of the advertising that pays for it.”

90
“Inevitably, serialization changed the structure of stories. Dickens fashioned tales with cliff-hanger endings to keep readers coming back [...]. More significant, however, was the way he improvised in response to his readers’ reactions.”

98
“The entire motion picture industry was essentially a real estate operation, with mass-produced entertainment the come-on.” So cinemas were where the money was. Nonetheless the majors sold them off after Paramount.

111
“When people say the Internet is wreaking havoc on existing media businesses, they’re really pointing to two things: this ever-growing cascade of information, and the emergence of hyperlinks as a means of dealing with it. On a planet that even in 2002 produced a new Library of Congress print collection every 57 seconds, most information is never going to command the premium it once did. But links to the right information can be extremely valuable – especially to companies tht know how to use those links to their advantage.”
-> ‘glue’ !!!

112f
“This is why, when books [NEXT PAGE] threatened to make us stupid 2,400 years ago [Socrates "complained that books encourage forgetfulness" 112], we responded not by abandoning books but by redefining “stupid.” I suspect we’ll do the same with Google.”

127
“‘Characters were becoming something companies would place great value in, because they knew people would follow. It was a precursor to the story arc.’” Phil Spencer, head of Microsoft Game Studios.

137
“I think of traditional linear storytelling as a roller coaster and games as a dirt bike.” Will Wright.

141
“The best stories lead to the widest variety of play, and the best play leads to the most story. I think they’re two sides of the same coin.” Will Wright.

142
“This suggests, the authors wrote, ‘that readers understand a story by simulating the events in the story world and updating their simulation when features of that world change.’” Speer, Nicole K. et al; 2009; Reading Stories Activates Neural Representations of Visual and Motor Experiences.
-> Consumers literally live in/experience a story – a bit like the mirror neuron.

177
“‘NBC is paying people fake money to do real work,’ he marveled, ‘and MasterCard paid NBC real money to give away fake money.’” Rajat Paharia, founder of Bunchball.

233
“as individuals we’re more connected than ever, and yet as a market we’re atomized. As goes the mass market, so go mass media, spelling chaos for the media industry itself and for the advertisers that rely on it to reach consumers.”

237
“And when consumers are enlisted to tell the story, it’s seen less as advertising than as peer recommendation.”

250
“[...] people don’t want to watch toilet paper give them a 30-second narrative – not when they could be watching real entertainment from real entertainment producers.”
-> He says advertising does not have to be storytelling at all.

274
“Any narrative that has gamelike aspects – which is to say, any story that invites you into its world – can make an appeal to your foraging instincts.”
-> If you conceive an entertainment world, play has to be part of it.

277
“[Japanese players] have no problem playing the bad guy, because they’re used to the idea that fantasy can be divorced from reality. (Hence such otaku fixations as lolicon and tentacle porn.) Others, Americans in particular, take a more moralistic approach.”

318
“‘It is my job to create universes, as the basis of one novel after another. And I have to build them in such a way that they do not fall apart two days later. Or at least that is what my editors hope. However, I will reveal a secret to you: I like to build universes which do fall apart. I like to see them come unglued, and I like to see how the characters in the novels cope with this problem. I have a secret love of chaos. There should be more of it.’” Quotes Philip K. Dick ~ How to Build a Universe That Doesn’t Fall Apart Two Days Later.

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)!

Film history, not economics. But describes the industry beginnings.

10
“Although the technical novelty of moving pictures was enough to thrill the first audiences, producers soon realized that if business was to continue, a steady supply of fresh films was required.”

“[Edison] instituted a series of patent infringement suits in December 1897 against nearly every organization and individual of consequence that had entered the business.”

18
“[...] the movies [and with them nickelodeons] did not remain the province of the working class for long.”

20
“The records of the Biograph Company reveal that in the period 1900-1906, the studio produced more nontheatrical subjects than dramatic films, 1,035 and 774, respectively. By 1908, however, the industry concentrated its production efforts on narratives almost exclusively.”

“Narratives [...] offered the advantage of regularizing and stabilizing production.” Not like docos or news: if there was not news, there was nothing to show; and cameramen had to travel to the news, which was costly.

23
“Edison wanted the entire pie for himself.” He was ruthless, his aim a monopoly with him as king. The other companies weren’t much better, though.

24
“the patent wars seriously hampered expansion of the industry.” People were making money, but the situation was unsure. So nobody invested in anything. Small companies simply “closed their doors.” Barriers to entry had been created.

25
“Edison and Biograph declared a truce in summer 1908, and formed the Motion Picture Patents Company. By joining forces they could now control the industry without a doubt.”

vii
Definition-creative-industries:
“The organization of “creative industries,’ in which the product or service contains a substantial element of artistic or creative endeavor, has received surprisingly little attention from economists, with a sole exception: the question whether public subsidy is warranted for the performing arts.”

1
Definition-creative-industries:
“One has been largely missed, however – the “creative” industries supplying goods and services that we broadly associate with cultural, artistic, or simply entertainment value. They include book and magazine publishing, the visual arts (painting, sculpture), the performing arts (theatre, opera, concerts, dance), sound recordings, cinema and TV films, even fashion and toys and games.”

“Hollywood, which once captured the nerve center of American life, doesn’t matter much anymore.”

“More than any other form, they [movies] defined us, and to this day, the rest of the world knows us as much for our films as for any other export.”

“Before demographics became the marketing mantra, the movies were the art of the middle. They provided a common experience and language — a sense of unity. In the dark we were one.”

“Now, however, when people prefer to identify themselves as members of ever-smaller cohorts — ethnic, political, demographic, regional, religious — the movies can no longer be the art of the middle. The industry itself has been contributing to this process for years by targeting its films more narrowly, especially to younger viewers. In effect, the conservative impulse of our politics that has promoted the individual rather than the community has helped undermine movies’ communitarian appeal.”

“But it is much more difficult to survive a change in consciousness than a change in taste or technology, and that is what the movies face now — a challenge to the basic psychological satisfactions that the movies have traditionally provided.”

xix
Definition-entertainment:
“the act of diverting, amusing, or causing someone’s time to pass agreeably; something that diverts, amuses, or occupies the attention agreeably.” From Webster’s Third New Unabridged International Dictionary, 1967.

Definition-entertainment:
“Entertainment – the cause – is thus obversely defined through its effect: a satisfied and happy psychological state. Yet, somehow, it matters not whether the effect is achieved through active or passive means. Playing the piano can be just as pleasurable as playing the stereo.”

Definition-entertainment:
“Entertainment indeed means so many different things to so many people that a manageable analysis requires sharper boundaries to be drawn. Such boundaries are here established by classifying entertainment activities into industry segments, that is, enterprises or organizations of significant size that have similar technological structures of production and that produce or supply goods, services, or sources of income that are substitutable.”
He defines entertainment from an industrial perspective.

4
Definition-entertainment:
“The concept of entertainment is thus subordinate to that of recreation: It is more specifically defined through its direct and primarily psychological and emotional effects.”

13
“As this post-war generation matures past its years of family formation and into years of peak earnings power and then retirement, spending may be naturally expected to collectively shift to areas such as casinos, cultural events, and tourism and travel, and away from areas that are usually of the greatest interest to people in their teens or early twenties.”

494
“[There] are several frequently observed industry characteristics.”

“Many are called, but few are chosen: Perhaps the most noticeable tendency of entertainment businesses is that in the steady-state growth phase (i.e., after a segment has attained a size at which long-run domination by several large companies has been established), profits from a very few highly popular products are generally required to offset losses from many mediocrities.”

“Marketing expenditures per unit are proportionally large: [...]“

“Ancillary markets provide disproportionately large returns: [...]“

494f
“Capital costs are relatively high; oligopolist tendencies are prevalent: As happens in many other industries, once beyond the very early stages of a segment’s development, the cost of capital and the amount of it required for operations becomes a formidable barrier to entry by new competitors. Most entertainment industry segments thus come to be ruled by large companies with relatively easy access to large pools of capital. Such oligopolistic tendencies can, for example, be seen in distribution of recorded music and movies, and in the gaming, theme park, cable, video game, and broadcasting industries.”

495
“Public-good characteristics are often present: With pure public goods, the cost of production is independent of the number of consumers; that is, consumption by one person does not reduce the amount available for consumption by another. Although delivered to consumers in the form of private goods, many entertainment products and services, including movies, records, television programs, and sports contests, have public-good characteristics.”

“Many products and services are not standardized (which is good for entrepreneurs and bad for relative-productivity gains): There are four important consequences of such nonstandardization:

1. Despite the oligopolistic framework, there is considerable freedom for the entrepreneurial spirit to thrive. That is, operas, plays, movies, ballets, songs, and video games are uniquely produced and are normally originated by individuals working alone or in small groups and not by giant corporate committees. One can become rich and famous as a direct result of one’s own creative efforts.
2. The entrepreneurial spirit and thus the importance of the individual to the productive process is accommodated by means of widely varying, and uniquely tailored, financing arrangements. This is especially evident in movies, recorded music, and sports. Option contracts are central.
3. Where the production is the product itself (e.g., live performance of music or dance), it is difficult to enhance productivity. To some extent, this aspect also appears in areas as diverse as filmmaking, sports, and casino gaming.
4. Under the aforementioned conditions, the costs of creating and marketing entertainment products such as movies and television programs tend to rise at above-average rates.

”

“Technological advances provide the saving grace: Fortunately, ongoing technological development makes it ever easier and less expensive to manufacture, distribute, and receive entertainment products and services.”

“New entertainment media tend not to render older ones extinct: New ways to deliver entertainment products and services are constantly evolving. Although introduction of new entertainment media may diminish the importance of existing forms, the older forms are rarely rendered extinct.”
-> Thesis

496
“Entertainment products and services have universal appeal: Demand for entertainment cuts across all cultural and national boundaries”

501
“Yet the industries are already quite mature in the United States, and expansion will increasingly be linked to the rate of growth of middle-class populations outside North America.”

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