Sunk costs and the dynamics of creative industries

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

Preparing Negotiations in Services: EC Audiovisuals in the Doha Round.

No abstract is available for this item.

Business to business online revenue management.

With the emergence of the Internet, electronic commerce (e-commerce), revenue management and especially applications that combine both are becoming increasingly an area of innovation for service industries. E-commerce has introduced efficiencies across the service chain and it has allowed improvements to take place within and across organizations. Revenue management when combined with ecommerce and done online not only improves resource management but it can be used as a strategic tool to gain competitive advantage. This chapter examines the current approaches and future trends in these very exciting and promising areas

Revenue Management: Resolving Potential Customer Conflicts

Revenue management is a sophisticated form of supply and demand management that helps a firm maximize revenue by balancing pricing and inventory controls. In recent years, an increasing number of firms have recognized the importance of revenue management in their ability to increase sales and profitability. When a firm that is fundamentally customer oriented also embraces revenue management, however, a series of customer conflicts can result and be detrimental to the firm\u27s long-term success. This paper outlines these potential conflicts and explores various marketing and organizational strategies that can be used to resolve such conflicts

Attendance and Public Participation in the Performing Arts: A Review of the Empirical Literature

While audience and participation surveys, as well as econometric demand studies, generally confirm that performing arts audiences are relatively elite, there are surprises. Education (despite conflicting causal interpretations) is a stronger determinant than income, but that evidence is more reliable from survey results than from econometric estimation, and arts training is often distinguished from formal education. The arts as luxury goods can only be confirmed by those rare studies controlling for the value of time, and price elasticities are often higher than expected, especially when more disaggregated data are examined. Price inelastic demand is more likely the result of low pricing strategies of non-profit arts managements rather than any inherent result of an acquired taste for the arts, while cross-price elasticity evidence is relatively weak, even within the performing arts. Arts demand cannot adequately be estimated without also considering "life-style" variables, or non-standard socioeconomic factors such as sexual orientation, gender and socialization processes, and even the role of age has been notably complex. Quality of arts performance or organization seems important, but the econometric results are mixed. Habit formation must be distinguished from learning-by-consuming and rational addiction in examining dynamic determinants. Sociologists, psychologists, and marketing specialists, as well as economists, have contributed to this literature, which remains unusually enigmatic despite about forty years of increasingly sophisticated analysis. Working Paper 06-2

Sports attendance: A survey of the Literature 1973-2007

Introduction – 1. Theoretical aspects – 2. Demand definition, data andempirical model – 3. Determinants of attendance (I): Economical aspects – 4.Determinants of attendance (II): Expected quality – 5. Determinants of attendance(III): Uncertainty of outcome – 6. Determinants of attendance (IV): Opportunity cost and other factors – Conclusions – Abstract In this paper, we show a review of the empirical analysis literature about the factors that explain attendance to the stadiums on different sports, mainly in the case of professional sports. Apart from the traditional economic determinants of demand (attendance), the sports events in which the performers have more quality and in those which exists uncertainty of outcome of the match or the championship, have a larger number of spectators. On the other hand, these are not the only factors that explain attendance. Variables that capture the opportunity cost of going to the stadium and other determinants, like unobservable factors associated to the contender teams, also have relevance at the time of analyzing this side of the demand related to professional teams of sports eventsAttendance, elasticity, quality, uncertainty of outcome