• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • 2
    CommentGo Back
Download
 
R
ETHINKING
 
BUSINESS
 
MODELS
 
IN
 
THE
 
CREATIVE
 
INDUSTRIES
Version 1.0 of February 28th, 2007
1.Introduction
The recent wave of technical advance has, in principle, made possible new products, services andbusiness models in the creative industries (liquid music, digital cinema, ebook, mobile TV etc.)However, it is difficult to be successful on the market. Many high-value added services just “never happened” (MMS, WebTV, online music by subscription etc.); this suggests that, in today's highlyvolatile environment, systematic investigation of new and emergent business models for thecreative industries (henceforth CIs) might be a good idea. Consistently with recent developmentsin innovation economics, which in their turn draw on cognitive sciences, we recommend that thisthat such an investigation (1) integrates CIs- and ICTs- tacit competences; (2) integrates bestonline and offline practices; (3) integrates field tests, assessment and model building activities.
2.The objective: explaining failures
What makes it so difficult to market products and services embodying new technology? Thefollowing “folk” explanations are often offered.
“Old economy corporations don't understand technology 
”. Old economy corporate decision makershave been known to use misleading metaphors for new media. For example, record industrymajors are thought to have failed to build an effective online retail music service because of their failure to conceive the internet as a social network, rather than an electronic version of asupermarket shelf. Such conservative behaviour resulted in Apple, a cross entrant from analtogether different industry, evolving into the market leader. Similarly, attempts to transfer “broadcasting” (e.g. “one to many” communication) to the web (which makes “many to many”communication possible) typically result in disappointing bottom line results.
“Engineers don't understand consumers” 
. A lot of products and services launched on the marketassume an unrealistically high degree of confidence with ITCs in their target consumers. They areoften turned down by Joe User, who could not be bothered to learn how to program his VCR in the80s and cannot be bothered to learn how to customize the welcome message in his voicemailtoday. Killer apps are typically bonehead simple, like SMS text messages
1
. 
1
An excellent example, since the SMS protocol was incorporated in the GSM code by some obscure engineer because “there was some space we did not know how to use”. [Giussani 2001]
www.thehubweb.net 
 
Business models for the creative industries.odt
“The ontology of marketing is changing fast” 
. The mutation in patterns of social interaction andtheir interference with purchase decisions (web 2.0, viral marketing, peer recommendation etc.) isredesigning the world of marketing. Advertising and broadcast communication is losingeffectiveness
2
;the age of passive consumers driven by mass media through hidden persuasiontechniques may be over. Indeed, the whole ontology of marketing is being reshaped: words like“consumer” “product” or “advertising” are increasingly viewed with suspicion by practitioners – andbuyers – and are replaced by concepts like “professional amateur”, “community”, “buzz”.While folk explanations may have some merit, they do not answer the real question at stake whichis: how do you build business models around ICT intensive for the CIs? While new businessmodels have been known to emerge as a result of a breakthrough technical innovation (thoughthis happens less often than we would like it to), they are rarely the subject itself of self-awareinnovation processes. In fact, we would argue that marketability is under-represented in the CIsdebate on innovation
3
.
3. Innovating for market success: a proposed methodology
We make a case for thinking about business model building in a systematic way, trying tounderstand - and if possible to stimulate - the cognitive processes through which
successfully marketable
innovation – as opposed to technical innovation per se - is produced. This could beachieved by designing interaction environments that are conducive to innovative thinking.According to a reasonably well established strand of literature, the latter tends to happen not somuch in the mind of a stand-alone inventor, as within the context of relationships called generative.These relationships have several characteristics, but the main one is that the agents involved itmust be similar enough to communicate well but different enough to induce cognitive disturbancesin each other. These disturbances “make the agents see things in a different way”; and a new mapallows for new patterns of agent behaviour 
4
.In practice, a good way to do this seems to be to1.Build a team of people coming from different backgrounds, for heterogeneity.2.Give them a real-market field experiment to carry out. The “real market” constraintforces the group to build in their thinking the need to identify and develop a communityof early adopters right from the start; allows for exploiting the full range of marketsignals (including “weak” signals such as event attendance, page views, blogcomments etc.) as inputs to the innovation process; and gives them a common senseof purpose, which should mitigate the incentive to “opt out” of the team notwithstandingthe difference in individual approaches.3.Adopt a time horizon of a couple of years, long enough for cognitive disturbances tosink in.
2
TV advertising has been losing its impact for years: McKinsey projects that by 2010 it will be barely one-third aseffective as it was in 1990, thanks to rising costs, falling viewership, ever-proliferating ad clutter, and viewers'TiVofueled power to zip through commercials. http://www.wired.com/wired/archive/14.12/tahoe.html
3
Bob Garfield on
Wired 
magazine seems to support our view when he notes “It turns out that success is 1%inspiration, 99% monetization.http://www.wired.com/wired/archive/14.12/youtube.html?pg=3&topic=youtube&topic_set=
4
For an example concerning ITCs see Lane, D., and R. Maxfield, “Foresight, Complexity, and Strategy”, in A. Durlauf e D. Lane (eds), The Economy as a Complex System II, SFI Studies in the Sciences of Complexity, vol. XXVII,Addison-Wesley 1997. Scott's work on the location pattern of the recorded music industry, while using a differentframework, is highly consistent with a generative relationships approach. Scott, A.J., 1999, “The US recorded musicindustry: on the relations between organization, location and creativity in the cultural economy”, Environment andplanning
Pagina 2 di 3
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
bailarina

thanks for posting this!

reply05 / 21 / 2007
You must be to leave a comment.
Submit
Characters: ...