WHAT IS CRITICAL TO SUCCESS IN THE MOVIE INDUSTRY? A STUDY ON KEY - - PowerPoint PPT Presentation

WHAT IS CRITICAL TO SUCCESS IN THE MOVIE INDUSTRY? A STUDY ON KEY SUCCESS FACTORS IN THE ITALIAN MOTION PICTURE INDUSTRY

Paolo Boccardelli

pboccard@luiss.it

Federica Brunetta

Fbrunetta@luiss.it

Francesca Vicentini

Fvicentini@luiss.it DIME - The Creative Industries and Intellectual Property Conference - London, May 22nd and 23rd, 2008

 Heterogeneity and Key successful factors in the movie industry  The research  Further development and Concluding Remarks

Agenda

 Previous literature has not been able to solve one of the main issues in the explanation of persistent heterogeneity in firm performance, that is the tautology character of the resource- based conceptual room (Priem and Butler, 2001a and b)  Adopting a RB language, scholars still need to turn causal ambiguity into causal understanding, which means:

 explaining heterogeneity in resources and competencies endowments

 specific characteristics affecting success  firm specific strategic paths  the role of managerial factors

The aim of the research: explaining firms heterogeneity

The motion picture industry

 Worldwide, the movie industry, is characterized by some clear characteristics

Creativity Innovative organizational forms The role of information

PROTOTYPICAL NATURE PROJECT – BASED ORGANIZATION ARTISTIC AND ECONOMIC SUCCESS

Source: DeFilippi and Arthur, 1998; Lampel and Shamsie, 2000 and 2003; Delmestri et al., 2005

The role of networks

COMMUNITY OF ARTISTS

Heterogeneous industrial forms

INTEGRATED VS. SPECIALIZED FIRMS

PRODUCTION – DISTRIBUTION - CHANNELS

Integrated Model

Production  Small and big production firms  Either owned or partnered Distribution  Specialized companies to distribute in different channels  Owned Channels  Theatrical companies (partners)  Network (owned and partners)  Web (owned)

Typical in the US industry (e.g. Hollywood Cluster)

Heterogeneous industrial forms Specialized Model

Production  Small production firms  Indipendent Distribution  Specialized companies to distribute in different channels  Indipendent Channels  Theatrical companies (indipendent)  Network (indipendent)  Web (indipendent)

Typical in the Indian and EU industry (e.g. Bollywood Cluster; Italy)

PRODUCTION DISTRIBUTION CHANNELS

Source: Ibidem; Lorenzen and Taeube, 2007

Theoretical Background - general Different scholars have pointed out the role of distinctive and talented resources in the production, measured e.g. by the presence of stars and award.

Miller and Shamsie (1996) focused on the effect of property and knowledge-based resources on the financial performance. Lampel and Shamsie (2000) introduced the concept of momentum Lampel and Shamsie (2003) analyse the role of talented actors to explain economic performance in terms of box-office revenues.

The capability of quickly reconfiguring competences into specific projects appears as a critical issue (Lampel and Shamsie, 2000 and 2003).

Theoretical Background - Relevance of the relational capital

Motion pictures are the collective creation of a large number

• f separate individuals, each contributing their creative

input, unique talents, and technical expertise to the project (Ferriani et al., 2005).  Delmestri et al. (2005) and Sorenson and Waguespack (2006) analyze the vertical ties linking directors to producers and distributors, as well as the horizontal ones with other members of the production team, with the attempt to analyze to what extent the strength of these relations may influence movie performance.  Uzzi and Spiro (2005) demonstrated that the level of connectivity and cohesion in a community that has the characteristics of a small world network positively influences artistic and economic performance

Theoretical Background

Strategic resources, like talent, human capital and stock of awards that characterize resources endowments (Miller and Shamsie, 1996;Lampel and Shamsie, 2000 and 2003; Ravid, 1999; Basuroy et al., 1999)

PROJECT – RELATED FACTORS

Network capital which allows to mobilize and reconfigure project resources; Investments from the distribution phase (Uzzi and Spiro, 2005; Delmestri et al., 2005; Sorenson and Waguespack, 2006; Cattani et al., 2008; Esparza and Rossman, 2008)

INDUSTRY – RELATED FACTORS

ARTISTIC AND ECONOMIC PERFORMANCE

Literature gaps in summary

Understanding the innovative sources of heterogeneity, in terms of resources, competencies and networks

Theoretical gaps

Understanding of the characteristics of strategic resources and the role of networks and external communities on project performance

Industry acknowledgement gaps

Hypotheses

Two main characteristics can be investigated, that are talent and flexibility. Flexibility, seen as the ability of a director/actor to perform in different movie genres and to play different roles within the production might be an interesting issue to partially explain performance heterogeneity. H1: In the Italian motion picture industry directors significantly affect movie

• performance. So flexibility and distinctiveness of director influence movie

performance Similarly: Hp 2: Flexibility and distinctiveness of actors influence movie performance

Hypotheses

An higher degree of centrality and a greater level of brokering of the crew members are two important factors for the project. The degree of centrality can be considered an indicator of centrality of the crew members within the community and can deploy positive effects on either economic and artistic performance The brokering function (betweeness) a variable displaying the capability to activate relations with professionals and artists in the community and appears significant only for the economic variables, enabling a rapid and effective project organization Hp 3: The relational capital is a critical success factor in the movie project performance.

• Hp 3a:

The level of centralization influences positively both the economic and artistic performance.

• Hp 3b: The brokering degree influences positively the economic

performance.

 Heterogeneity and Key successful factors in the movie industry  The research  Further development and Concluding Remarks

Agenda

Our analytical model

MOVIE PROJECTS PERFORMANCE

ARTISTIC SUCCESS ECONOMIC SUCCESS Awards / Nominations Critics and Reviews Box Office Revenues Box Office Admissions RESOURCES RELATIONAL CAPITAL Human Capital Talent (stock of awards and nominations; flexibility of genre) Experience (# of projects done) Network charateristics Degree centrality Betweenness centrality Control Variables Distribution strategies

The empirical investigation

 Data from 1074 movie projects performed in Italy between 1996 and 2007 have been collected from various sources

Box office data Awards* Artists and other teammates

ECONOMIC PERFORMANCE ARTISTIC PERFORMANCE HUMAN CAPITAL AND NETWORK

Cinetel (Association of Italian Theatres) “Il cinematografo” Internet Movie Database “Il cinematografo” Internet Movie Database Cinetel

Critics*

ARTISTIC PERFORMANCE

Internet Movie Database Annuario del cinema “Mereghetti” * Data on awards and critics have been normalized as follows Source: Freudenberg, 2003

Human Capital data

 Human capital data are collected in terms of stock of awards and nominations and its inherently flexibility

• f genres

About 2.800 awards and nominations for a movie About 4.500 awards and nominations for directors About 7.600 awards and nominations for actors About 27.000 awards and nominations for the entire crew

STOCK OF AWARDS AND NOMINATIONS DRAWING DISTINCTIVENESS OF RESOURCES

HUMAN CAPITAL STOCK OF AWARDS AND NOMINATION OF THE MEMEBERS OF THE PROJECT STOCK_Pnaz STOCK_Pint STOCK_Nnaz STOCK_Nint STOCK_OscarGG STOCK_NOscarGG Pnaz Pint Nnaz Nint OscarGG NOscarGG IMDBrat BO_Rev BO_Adm Schermi GG_proiez ARTISTIC PERFORMANCE AWARDS, NOMINATIONS AND RATINGS GAINED BY THE PROJECT FINANCIAL PERFORMANCE BOX OFFICE DATA, N. OF SCREENS, DAYS ON SCREENS

Variables and data

Network data

 Some figures on network data can be taken

Community

About 16.500 members About 13.000 actors About 2.500 members between directors, writers, photographers and other creative staff About 1.000 members between editors, producers and other staff A Mean of 15 members per project

Some preliminary results: the role of directors (1)

Supported

Some preliminary results: the role of directors (2)

Not supported Need for refinement of variables

Some preliminary results: the role of actors (1)

Supported

Supported

Some preliminary results: the role of actors (2)

Supported

Some preliminary results: the role of network

 Heterogeneity and key successful factors in the movie industry  The research  Concluding Remarks and Further development

Agenda

Limits and further development

 The project is at its dawn, and it needs to be refined in the theoretical constructs as well as in the definition of variables and data

Theoretical constructs Variables

Definition of organizational competencies Analysis of flexibility of resources Better definition of variables like awards, critics

The concept and measure of routines Flexibility in terms of role (i.e. director-actor/actor- director) Splitting of data and analysis of specific awards,…

Development of network data and the relative constructs

Analysis of ego-network (directors) and small world networks

Thank you!

Paolo Boccardelli pboccard@luiss.it Federica Brunetta Fbrunetta@luiss.it Francesca Vicentini Fvicentini@luiss.it

Box office skewness and descriptive statistics

ABSOLUTE VARIABLE TRANSFORMED VARIABLE

Focus on the Italian movie industry: some major trends (1/5)

Focus on the Italian movie industry: some major trends (2/5)

Focus on the Italian movie industry: the distribution (3/5)

Focus on the Italian movie industry: the production (4/5)

Focus on the Italian movie industry: the production (5/5)