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Cultural Industries Revisited

Author(s): Paul M. Hirsch


Source: Organization Science , May - Jun., 2000, Vol. 11, No. 3, Special Issue: Cultural
Industries: Learning from Evolving Organizational Practices (May - Jun., 2000), pp. 356-
361
Published by: INFORMS

Stable URL: https://www.jstor.org/stable/2640268

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Cultural Industries Revisited

Paul M. Hirsch
J. L. Kellogg Graduate School of Management, Department of Organization Behavior, Northwestern University,
Evanston, Illinois 60208-2001, paulhirsch@northwestern.edu

It is a commonplace in most lines of economic endeavor that those who process raw materials, transform
them and merchandise the finished product receive the lion's share of economic rewards. The field of
cultural endeavors is relatively unique in that we strongly desire to reward our creators, commune with
their audiences, but avoid or ignore the organizational middlemen linking each to the other.
(Hirsch 1985 p. 110)

see is a wondrous expansion in the disciplinary approaches be-


Abstract
ing taken to examine the multitude of topics available for ex-
In my early "Processing Fads and Fashions: An Organization-
amination under the broad rubric and framiing of the term, "cul-
Set Analysis of Cultural Industry Systems" (1972), the middle
tural industries." Because I was a graduate student at the time
"throughput" phase, or most organizational aspect of cultural
(my roommate dared me to submit the "Processing. . ." paper
industries, was emphasized. In this depoliticized exploration of
to the American Journal of Sociology), it is a great pleasure to
what Adorno (1991) had earlier characterized as the industri-
find the concept has retained its value for other researchers since
alization of high culture, and Powdermaker (1950) as Holly-
that time.
wood's "dream factory," I emphasized the key roles of gate-
In this article, I will (1) reexamine and discuss the original
keeper and distributor organizations as critical in connecting the
framing of the term cultural industries; (2) briefly review some
artist/creators to audience/consumers of mass, or "popular"
of the more recent complementary perspectives which expand
culture (as it had more acceptingly come to be called). Alto-
the possible arenas for studying this topic; and (3) append a
gether, this network of organizations-from creators (artists, short note on how the more recent inclusion of nonprofit cul-
musicians, actors, writers) and brokers (agents), through the tural products (e.g., symphonies, museums) in this framework
cultural product's producers (publishers, studios), distributors poses interesting analytical questions and opportunities.
(wholesalers, theaters), and media outlets-collectively consti- (Economic Sociology; Organizational Field; Cultural
tute cultural industries. This article on industries producing Industry; Mass Media; Entertainment)
"cultural products" -defined as " 'nonmaterial' goods di-
rected at a public of consumers, for whom they generally serve
an esthetic or expressive, rather than a clearly utilitarian func-
tion" (Hirsch 1972 p. 641)-appeared at the same time that Revisiting the Original Framework
organizational sociology's focus on what became known as the
The concept of industry system takes the focus of atten-
"production of culture" took off, and continued to flourish into
tion away from any single firm or role in the sequence of
the 1990s (Peterson 1994, Crane 1992).
discovering, producing, and delivering a product, redi-
How has the study of cultural industries changed over the
recting attention to the interconnections and interdepen-
last generation? A simple answer is that the subject-the key
dencies between them in order to get to the final ("fin-
role of distribution and the importance of organizational mid-
ished") product or outcome. As Scott (1995) notes, it is
dlemen in the making and sale of popular culture-remains an-
similar to the concept of organizational field (DiMaggio
alytically the same. From actors, musicians, and writers;
through studios, labels and publishers, to videocassettes, movie
1991), which maps out the universe of organizations en-

theaters, record stores, and booksellers (in stores or via the In- gaged in processing a product or project from its incep-
ternet)-cultural products flow. How this sequence is organized tion to completion.
and traversed remains a fascinating forest of power plays and In the case of cultural products, by the start of the new
techniques, employed by role-occupants in the same positions millennium the organizational field would encompass
as have existed since the advent of mass media. While this roles and organizations ranging from the talent agencies
substantive field has changed little analytically, what we also and personal managers handling the artist's career to the

1047-7039/00/1 103/0356/$05.00 ORGANIZATION SCIENCE, ? 2000 INFORMS


1526-5455 electronic ISSN Vol. 11, No. 3, May-June 2000, pp. 356-361

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PAUL M. HIRSCH Cultural Industries Revisited

satellites carrying signals for both broadcast organiza- Television Network and major newspapers; the Bertels-
tions and consumers, internet delivery of recordings and mann Co.'s recent acquisition of Random House; and,
song lyrics, and video cassettes of movies for purchase finally, AT&T's purchase of 60% of the cable television
and rental. In between these are a small number of pow- industry.! It is important to note this overall increase in
erful "intermediate" organizations producing and dis- concentration is primarily in the distribution and retail
tributing the movies, books, recordings, and television sectors of this industry field. As the cost of technologies
programs which are developed and delivered at the earlier for making a record, printing a book, or filming a movie
(production) and later (retail) stages of these products' continues to decrease, control over their distribution be-
creation and distribution (Stearns et al. 1987, Barnett and comes more critical for organizations seeking to reduce
Starkey 1994, Saundry 1998). uncertainty over the outcome of their investments (Miller
The extensive risk sharing and outsourcing of numer- 1996, 1997, Hirsch 1992, Turow 1992).
ous aspects of this production, marketing, promotion, and As the level of concentration increases across these me-
distribution process began early in the history of enter- dia, an interesting empirical and researchable question
tainment. Interestingly, these practices recently diffused will be whether the diversity of what becomes available
extensively throughout American business organizations, is diminished. Particularly for books and recordings
being adopted widely during the 1980s and 1990s (Arthur where consumers' access to alternative delivery remains
and Rousseau 1997). At GE and other large corporations, limited, a narrowing in the number of large-selling re-
this process mapping conception has been applied to the leases by new authors and publishers, or "unknown" re-
full production process-from the start to finish of a prod- cording groups and labels may be anticipated (Schiffrin
uct or project. Abrahamson, and Lawrence and Phillips 1996, Peterson and Berger 1975, 1996, Burnett 1992,
have noted similar sequences of (a) symbiotic interindus-
Lopes 1992). For films and television, the increase in
try sequences in the production and distribution of man-
available outlets (e.g., satellite channels, cassette sales)
agement fads and fashions, such as "total quality man-
may offset the increase in concentration of conventional
agement;" (Abrahamson 1996, 1999); and (b) traced the
distribution resources.
increasing importance of (outsourced) knowledge and de-
A rise in the number of outlets available for film and
sign components for increasing numbers of industrial and
television productions is facilitated largely by the frag-
service products (Lawrence and Phillips 2000).
mentation of the retail television spectrum. From a small
Within this dynamic cultural industry field, there con-
number of three television networks and some ancillary
tinues to be much jockeying for entry and positioning as
independent channels for the first 40 years of this com-
new technologies and legislation enable moves towards
mercial medium, the 1990s have seen an explosion of
vertical integration and cross-ownership of producing and
channels available via cable and satellite distribution.
distributing organizations. "Stratification within each in-
Television has joined radio as a medium of formats, with
dustry is based partly on each firm's ability to control the
channels now specializing in headline news, courtroom
distribution of marginally differentiated products. Com-
trials, stock market reports, romance movies, and car-
petitive advantage lies with firms best able to link avail-
toons. The once dominant networks are still important
able input to reliable and established distribution chan-
players, but less powerful-with a vastly reduced audi-
nels" (Hirsch 1972 p. 646). Recent large-scale corporate
ence share, now closer to 40% than their earlier 90%. An
mergers have increased concentration ratios and may alter
intriguing cultural question arising from this is whether
the internal composition of entertainment' s organiza-
tional field. One sign of a possibly countervailing force
the U.S. still has as clear a single dominant popular cul-

is the increasing utilization of the Internet by musical ture, or whether (like radio, magazines, and now televi-
group and author "producers" to release new materials sion formats), there is less of a national pop culture (net-
without going through the more traditional routes of re- work TV shows, with news at 6:00-or pothing else),
cording companies and publishers as their distributors. versus a multitude of what Gans (1974) and Cawelti
These developments within the cultural industry field (1976) earlier envisioned as a variety of taste cultures,
continue to move in various unanticipated directions. One each receiving its fare with minimal exposure to the tastes
significant indication is the decision of its major distrib- of others.
utor organizations to combine, in such recent megamer- This revisit to the original cultural industry systems
gers as: TimeWarner with Turner Broadcasting; Disney model finds the industry rife with substantive changes,
with Capital Cities (ABC) Broadcasting; News Corp.'s yet analytically much the same as at the time of the origi-
purchase of Simon and Schuster publishers, combined nal formulation. It still costs far less to produce many
with its ownership of 20th Century Fox (movies), Fox books, records and films than it costs to distribute and

ORGANIZATION SCIENCE/VO1. 11, No. 3, May-June 2000 357

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PAUL M. HIRSCH Cultural Industries Revisited

retail them. Competition in the industry is thus more fo- annual meetings of the National Association of Broad-
cused in this latter activity. During the 1990s, a series of casters was reported (Dretzka 1999) as presenting a con-
large mergers was undertaken, probably in large part to test in which "battle lines are being drawn between the
lower these costs and enable the reduction of uncertainty old guard-radio and television-and the new mavericks
in moving successful products through the cultural in- of the Internet." Translated into the language of strategic
dustry system. Unless (and until) these succeed in virtu- management, here is a contest between a previously dom-
ally ending the market uncertainty endemic to cultural inant five-forces economic framework (Porter 1980) ex-
industries over which cultural product will become the periencing threats from new entrants and substitute tech-
next hit or bestseller, this does not alter the analytical nologies, as well as changes in relations with suppliers.
focus of the industry system model. Rather, it provides a For disciples of Schumpeter, a possible time for creative
process-orientation enabling the analyst to trace the criti- destruction; for D'Aveni and Gunther (1994), an example
cal points at which "cultural products" are located, spon- of overdue "hypercompetition."
sored, promoted, and retailed. This tracks the complexity For researchers interested in cultural industries, these
of a cultural product's routes and chances for success, at potential transformations pose a great opportunity for
the same time that key industry members seek to rein- studies across disciplines, of networks, strategic alliances,
corporate aspects of production and distribution which new corporate strategies, interorganizational conflict, and
had previously been outsourced. The cultural industry the implementation of deregulation (e.g., AT&T's take-
system model, initially part of the "production of cul- over of 60% of the cable television industry). Researchers
ture" school of organizational sociology, has since been in each of these subfields are, happily, responding to this

extended and complemented by exciting developments in challenge and opportunity. For a cultural product to suc-
ceed, networks of relationships among a multitude of pro-
other disciplines, to which I now turn.
fessionals must be mobilized, coordinated, and managed
to get the job done (Burt 1992, Noria and Eccles 1992,
Granovetter 1982). In cultural industry systems, the for-
Recent Formulations on Cultural mal and informal contracts required cross-organizational
Industries boundaries and often involve freelance professionals and
In an overview of the recent economics literature, Di- their associates. Quantitative and qualitative studies of
Maggio (1994) noted an increase in the number of articles these networks, as well as comparisons between those
addressing cultural topics. In economics and the related that perform best and worst, are progressing and becom-
field of business strategy, an impressive number of stud- ing available. An extensive bibliography of interesting
ies of cultural industries have appeared since 1990. In projects examining these social networks is found in
Table 1 (Historical Overview of Cultural Industries), we Jones (1996).
see these publication dates correspond roughly to the in- In the corporate strategy arena, we find the resource-
dustry profile I label as the "New Gold Rush," in Col- based theory of strategy (Barney 1991) has been applied
umn 3 (1980s-2000). During this period, not only were to the film industry and extended by Miller and Shamsie

the providers and distributors of programming ("soft- (1996); and innovative studies by Robins (1993), Greve
(1996), and Eisenmann and Bower (this issue). These are
ware") for the major media undergoing dramatic
but a small sample of the expansion of frameworks out-
changes; the very equipment ("hardware") over which it
side of the production of culture perspective which, all
would be transmitted and received (cables, wireless, sat-
combined, lead to the conclusion that there is much left
ellites, Internet transmissions) was also in a state of flux.
to examine in the field, and it is well under way. An
(The key issues portrayed on Columns 1 and 2, for the
additional area of increasing value and importance for
industry's earlier eras, were addressed in the previous
social scientists-but beyond the scope of this review-
section, and are covered more extensively in the attendant
is the study of meaning and discourse conveyed through
"production of culture" literature.)
the books, films, and television programs to which we are
For economic modelers, this poses a question of how
exposed daily.
people will allocate their leisure time, i.e., which of the
many platforms offering competitive entertainment, and
A Note on Cultural Industries and
seeking the consumer's time and money, would succeed
in gaining it? Following Column 3 of Table 1, we find Nonprofit Organizations
conceptions of the mass audience giving way to mass To the extent organizational sociology has reestablished the obser-
"customization" with attendant changes in marketing vation that fine art and popular culture both exist in social en-
campaigns, advertising, and images presented. The 1999 vironments which commingle elements of art and commerce, it

358 ORGANIZATION SCIENCE/VOl. 11, No. 3, May-June 2000

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PAUL M. HIRSCH Cultural Industries Revisited

Table 1 Cultural Industries: A Historical Overview

1940s 1950s-1970s 1980s-2000

Industry "Industry" Stable, Controlled "Orderly" Transitions New Gold Rush


Profile (Vertical Integration)

Framings and "Mass Culture": Diversity and Segmentation begin: "Mass Customizations":

Context "film factories"; "golden age." Less Concentration - Restabilization. postmodern sensibilities;
3 Radio Networks New Record Labels; FM stations. everything everywhere, and
4 Record Companies Newspaper zoning begins; commonly owned (MTV
5 Movie Studios CATV gets going, MCI shows up. & Nick; CNN & Warner Bros.).
New entrants and entrepreneurs;

networks reeling

Locus of "Throughput" Creators ("input") freed up. All negotiable;


Control Production (intermediaries) New production companies arrive. Big mergers - multimedia;
in control Rise of new styles and players. Focus more international

Technology Software > Hardware Television arrives and conquers Computing & Media coverage;
& Legal Technology stable; Radio - Outlet for new genres. websites and Internet emerge;
Arenas mass media as wartime ally New Telecomm Act Restricts Field;
Hardware issues contested.

Analytical Bain, Industrial Peterson, recording industry studies; DiMaggio, broadening culture's
Frameworks Organization Economics Gans, high culture and popular culture. definition;
Include: D'Aveni's hypercompetition;
The Frankfurt School Turow-changing company practices;
Gitlin-political impacts.

has rendered an intellectual service. But in making this point, content has clearer standards (which are taken more se-
we may well have glossed over the question of what are the riously than for pop culture), I am pleased to see the cul-
proportions of, and emphases on, art versus commerce found tural industry concept extended to the nonprofit (more
within each area? (Hirsch 1978 p. 317) elite) sectors of the study of cultural organization. For
consumers, the key feature common to both sectors re-
Both sociological and economic approaches to the arts mains the greater aesthetic value of the cultural produc-
have encouraged the conception of fine art as a "com- tions than for more utilitarian commodities, such as Band-
modity" no different than popular culture. But in fact, it Aids. The extension of the cultural industry concept in
has a far different audience (smaller, more elite), and a this way suggests a continuum from cultural to utilitarian
greater capacity to accurately estimate its costs and the usage of many consumer products, enabling its extension
flows of incoming revenue. Although the fine arts (for- to such additional settings as gourmet food, professional
tunately) fall short of meeting my definition of cultural sports, and symphony orchestras.
"products" and "industries" -as the most entrepreneur-
ial, speculative segments of the industry, and far more
Conclusion
committed to the size of the financial return than to the On a personal note, I am naturally delighted that the cul-
quality of the productions which yield it-the same role- tural industry concept continues to be useful for analyzing
sets are analytically operative: artists and managers at the the popular culture around us. It connects to the wider
input stages, and organizations producing and distributing movements in economic sociology to analyze and con-
their output (classical music, monographs, art films). struct organizational fields, and address the social con-
With the understanding that maximal profits reign less struction of markets of all kinds. The idea of tracing prod-
as the organizational goal in these settings (for nonprofits ucts across organizations rather than limit analysis to a
breaking even is cause for celebration), and that aesthetic single firm was fairly original at the time this article first

ORGANIZATION SCIENCE/VOl. 11, No. 3, May-June 2000 359

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PAUL M. HIRSCH Cultural Industries Revisited

appeared. With some notable exceptions, this processual Burnett, R. 1992. The implications of ownership changes on concen-

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Acknowledgment
study of strategic integration in a global media company. Org.
This article is a revision of presentations at two conferences, "Research
Sci. 11 (3). This issue.
Perspectives on the Management of Cultural Industries" and "Craft
Gans, H. 1974. Popular Culture and High Culture. Basic, New York.
and Commerce in Cinema, " held at New York University's Stem
Granovetter, M. 1982. The strength of weak ties: A network theory
School in 1997 and 1998. The author wishes to thank Joseph Lampel,
revisited. P. Marsden, N. Lin, eds. Social Structure and Network
Stephen Mezias, Jamal Shamsie, and Theresa Lant for organizing these
Analysis. Sage, Newberry Park, CA 105-130.
and making this paper possible, and to thank the Northwestern Uni-
Greve, H. 1996. Patterns of competition: The diffusion of a market
versity's Institute for Policy Research for financial support in con-
position in radio broadcasting. Admin. Sci. Quart. 41 29-60
ducting this research.
Hirsch, P. M. 1972. Processing fads and fashions: An organization-set
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Endnote
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Accepted by Theresa Lant.

ORGANIZATION SCIENCE/VO1. 11, No. 3, May-June 2000 361

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