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WHAT IS CRITICAL TO SUCCESS IN THE MOVIE
INDUSTRY? A STUDY ON KEY SUCCESS FACTORS
IN THE ITALIAN MOTION PICTURE INDUSTRY
Paolo [email protected] [email protected] [email protected] DIME - The Creative Industries and
Intellectual Property Conference -London, May 22nd and 23rd, 2008
Heterogeneity and Key successful factors in themovie industry
The research
Further development and Concluding Remarks
Agenda
Previous literature has not been able to solve one of the mainissues in the explanation of persistent heterogeneity in firmperformance, 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 causalambiguity into causal understanding, which means:
explaining heterogeneity in resources and competenciesendowments 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 bysome clear characteristics
Creativity
Innovative organizational forms
The role of information
PROTOTYPICALNATURE
PROJECT – BASEDORGANIZATION
ARTISTIC ANDECONOMIC SUCCESS
Source: DeFilippi and Arthur, 1998; Lampel and Shamsie, 2000 and 2003; Delmestri et al., 2005
The role of networksCOMMUNITY OF
ARTISTS
Heterogeneous industrial forms INTEGRATED VS.SPECIALIZED FIRMS
PRODUCTION – DISTRIBUTION - CHANNELSIntegrated
Model
Production
Small and big productionfirms
Either owned or partnered
Distribution
Specialized companiesto distribute in differentchannels
Owned
Channels
Theatrical companies(partners)
Network (owned andpartners)
Web (owned)
Typical in theUS industry
(e.g. HollywoodCluster)
Heterogeneous industrial forms
SpecializedModel
Production
Small production firms
Indipendent
Distribution
Specialized companiesto distribute in differentchannels
Indipendent
Channels
Theatrical companies(indipendent)
Network (indipendent)
Web (indipendent)
Typical in theIndian and EU
industry
(e.g. BollywoodCluster; Italy)
PRODUCTION DISTRIBUTION CHANNELS
Source: Ibidem; Lorenzen and Taeube, 2007
Theoretical Background - general
Different scholars have pointed out the role ofdistinctive 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 propertyand knowledge-based resources on the financial performance.Lampel and Shamsie (2000) introduced the concept ofmomentumLampel and Shamsie (2003) analyse the role of talentedactors to explain economic performance in terms of box-officerevenues.
The capability of quickly reconfiguring competencesinto specific projects appears as a critical issue (Lampeland Shamsie, 2000 and 2003).
Theoretical Background - Relevance of the relational capital
Motion pictures are the collective creation of a large numberof separate individuals, each contributing their creativeinput, 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 toproducers and distributors, as well as the horizontal oneswith other members of the production team, with theattempt to analyze to what extent the strength of theserelations may influence movie performance.
Uzzi and Spiro (2005) demonstrated that the level ofconnectivity and cohesion in a community that has thecharacteristics of a small world network positivelyinfluences artistic and economic performance
Theoretical Background
Strategic resources, like talent, humancapital and stock of awards thatcharacterize resources endowments(Miller and Shamsie, 1996;Lampel andShamsie, 2000 and 2003; Ravid, 1999;Basuroy et al., 1999)
PROJECT – RELATEDFACTORS
Network capital which allows to mobilizeand 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 andRossman, 2008)
INDUSTRY – RELATEDFACTORS
ARTISTIC AND ECONOMICPERFORMANCE
Literature gaps in summary
Understanding the innovative sources ofheterogeneity, in terms of resources,competencies and networks
Theoretical gaps
Understanding of the characteristics ofstrategic resources and the role ofnetworks and external communities onproject performance
Industryacknowledgement 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 moviegenres and to play different roles within the production might be an interestingissue to partially explain performance heterogeneity.
H1:In the Italian motion picture industry directors significantly affect movieperformance. So flexibility and distinctiveness of director influence movieperformance
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 crewmembers are two important factors for the project.
The degree of centrality can be considered an indicator of centrality of thecrew members within the community and can deploy positive effects on eithereconomic and artistic performanceThe brokering function (betweeness) a variable displaying the capability toactivate relations with professionals and artists in the community and appearssignificant only for the economic variables, enabling a rapid and effectiveproject organization
Hp 3:The relational capital is a critical success factor in the movie projectperformance.
•Hp 3a:The level of centralization influences positively both the economic andartistic performance.•Hp 3b: The brokering degree influences positively the economicperformance.
Heterogeneity and Key successful factors in themovie industry
The research
Further development and Concluding Remarks
Agenda
Our analytical model
MOVIE PROJECTSPERFORMANCE
ARTISTICSUCCESS
ECONOMICSUCCESS
Awards / NominationsCritics and Reviews
Box Office RevenuesBox Office Admissions
RESOURCES RELATIONALCAPITAL
Human CapitalTalent (stock of awards andnominations; flexibility of genre)Experience (# of projects done)
Network charateristicsDegree centralityBetweenness centrality
Control VariablesDistribution strategies
The empirical investigation
Data from 1074 movie projects performed in Italybetween 1996 and 2007 have been collected fromvarious sources
Box office data
Awards*
Artists and otherteammates
ECONOMICPERFORMANCE
ARTISTICPERFORMANCE
HUMAN CAPITALAND NETWORK
Cinetel (Association ofItalian Theatres)
“Il cinematografo”Internet Movie Database
“Il cinematografo”Internet Movie Database
Cinetel
Critics* ARTISTICPERFORMANCE
Internet Movie DatabaseAnnuario del cinema
“Mereghetti”
* Data on awards and critics havebeen normalized as follows Source: Freudenberg, 2003
Human Capital data
Human capital data are collected in terms of stock ofawards and nominations and its inherently flexibilityof genres
About 2.800 awards andnominations for a movie
About 4.500 awards andnominations for directors
About 7.600 awards andnominations for actors
About 27.000 awards andnominations for the entire
crew
STOCK OF AWARDSAND NOMINATIONS
DRAWINGDISTINCTIVENESS
OF RESOURCES
HUMAN CAPITALSTOCK OF AWARDS AND
NOMINATION OF THEMEMEBERS 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 PERFORMANCEAWARDS, NOMINATIONS AND
RATINGS GAINED BY THEPROJECT
FINANCIAL PERFORMANCEBOX 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 membersbetween directors, writers,photographers and other
creative staff
About 1.000 membersbetween editors, producers
and other staff
A Mean of 15 members perproject
Some preliminary results: the role of directors (1)
Supported
Some preliminary results: the role of directors (2)
Not supportedNeed 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 themovie industry
The research
Concluding Remarks and Further development
Agenda
Limits and further development
The project is at its dawn, and it needs to be refinedin the theoretical constructs as well as in thedefinition of variables and data
Theoreticalconstructs
Variables
Definition of organizationalcompetencies
Analysis of flexibility ofresources
Better definition of variableslike awards, critics
The concept and measure ofroutines
Flexibility in terms of role(i.e. director-actor/actor-
director)
Splitting of data andanalysis of specific
awards,…
Development of network dataand the relative constructs
Analysis of ego-network(directors) and small world
networks
Box office skewness and descriptive statistics
ABSOLUTEVARIABLE
TRANSFORMEDVARIABLE
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)