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 DIME - The Creative Industries and Fvicentini@luiss.it Intellectual Property Conference - London, May 22nd and 23rd, 2008
Agenda Heterogeneity and Key successful factors in the movie industry The research Further development and Concluding Remarks
The aim of the research: explaining firms heterogeneity 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 motion picture industry Worldwide, the movie industry, is characterized by some clear characteristics INTEGRATED VS. Heterogeneous industrial forms SPECIALIZED FIRMS PROTOTYPICAL Creativity NATURE PROJECT – BASED Innovative organizational forms ORGANIZATION COMMUNITY OF The role of networks ARTISTS ARTISTIC AND The role of information ECONOMIC SUCCESS Source: DeFilippi and Arthur, 1998; Lampel and Shamsie, 2000 and 2003; Delmestri et al., 2005
Heterogeneous industrial forms Integrated PRODUCTION – DISTRIBUTION - CHANNELS Model Production Distribution Channels Typical in the Small and big production Specialized companies Theatrical companies US industry firms to distribute in different (partners) channels Either owned or partnered Network (owned and (e.g. Hollywood Owned partners) Cluster) Web (owned) Specialized PRODUCTION DISTRIBUTION CHANNELS Model Production Distribution Channels Typical in the Small production firms Specialized companies Theatrical companies Indian and EU to distribute in different (indipendent) industry Indipendent channels Network (indipendent) (e.g. Bollywood Indipendent Web (indipendent) Cluster; Italy) 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 of 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 PROJECT – RELATED capital and stock of awards that FACTORS characterize resources endowments (Miller and Shamsie, 1996;Lampel and Shamsie, 2000 and 2003; Ravid, 1999; Basuroy et al., 1999) Network capital which allows to mobilize INDUSTRY – RELATED and reconfigure project resources; FACTORS 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) ARTISTIC AND ECONOMIC PERFORMANCE
Literature gaps in summary Understanding the innovative sources of heterogeneity, in terms of resources, Theoretical gaps competencies and networks Industry Understanding of the characteristics of acknowledgement gaps strategic resources and the role of networks and external communities on project performance
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.
Agenda Heterogeneity and Key successful factors in the movie industry The research Further development and Concluding Remarks
Our analytical model Awards / Nominations Box Office Revenues Critics and Reviews Box Office Admissions ARTISTIC ECONOMIC SUCCESS SUCCESS Control Variables MOVIE PROJECTS Distribution strategies PERFORMANCE RELATIONAL RESOURCES CAPITAL Human Capital Network charateristics Talent (stock of awards and Degree centrality nominations; flexibility of genre) Betweenness centrality Experience (# of projects done)
The empirical investigation Data from 1074 movie projects performed in Italy between 1996 and 2007 have been collected from various sources Box office data ECONOMIC Cinetel (Association of PERFORMANCE Italian Theatres) Awards* ARTISTIC “Il cinematografo” PERFORMANCE Internet Movie Database Internet Movie Database Critics* ARTISTIC Annuario del cinema PERFORMANCE “Mereghetti” “Il cinematografo” HUMAN CAPITAL Artists and other Internet Movie Database AND NETWORK teammates Cinetel * Data on awards and critics have Source: Freudenberg, 2003 been normalized as follows
Human Capital data Human capital data are collected in terms of stock of awards and nominations and its inherently flexibility of genres About 2.800 awards and nominations for a movie STOCK OF AWARDS AND NOMINATIONS About 4.500 awards and nominations for directors DRAWING DISTINCTIVENESS About 7.600 awards and OF RESOURCES nominations for actors About 27.000 awards and nominations for the entire crew
Variables and data Pnaz Pint STOCK_Pnaz Nnaz STOCK_Pint BO_Rev Nint STOCK_Nnaz BO_Adm OscarGG STOCK_Nint Schermi NOscarGG STOCK_OscarGG GG_proiez IMDBrat STOCK_NOscarGG HUMAN CAPITAL ARTISTIC PERFORMANCE FINANCIAL PERFORMANCE STOCK OF AWARDS AND AWARDS, NOMINATIONS AND BOX OFFICE DATA, N. OF NOMINATION OF THE RATINGS GAINED BY THE SCREENS, DAYS ON SCREENS MEMEBERS OF THE PROJECT PROJECT
Network data Some figures on network data can be taken Community About 16.500 members About 13.000 actors About 1.000 members between editors, producers and other staff About 2.500 members between directors, writers, photographers and other creative 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
Some preliminary results: the role of actors (2) Supported
Some preliminary results: the role of network Supported
Agenda Heterogeneity and key successful factors in the movie industry The research Concluding Remarks and Further development
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