Gerda Gemser School of Economics, Finance and Marketing/ Design Research Institute Assessing quality in the creative industries: on the role of gatekeepers

2 Creative Industries Creative industries: demand is highly unpredictable “There are no formulas for producing a hit record….just as there are no pat answers for producing hit [theatre] plays, or sell-out movies or best- selling books” (spokesman recording industry) Strategies to minimize demand uncertainty in the creative industries: – contact men/women – overproduction – cooptation gatekeepers

3 Gatekeepers: filtering of new products Filtering process of new products as they flow from producer to consumer  little attention for ´throughput´ sector: organizations/ gatekeepers that filter the overflow of information and materials intended for consumers Gatekeepers are particularly important when actual quality of products is difficult to ascertain:  Search products vs  Experience products vs.  Credence products Gatekeepers preselect: they save time and effort, helping consumers in their decision making process: ‘curated consumption’ Examples: awarding organizations, experts who write reviews

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7 Award Corporate Performance: - direct gains - indirect gains Corporate Performance: - direct gains - indirect gains Product characteristics (search, experience, credence) Product characteristics (search, experience, credence) Other institutional award characteristics: - Age - Monetary value - Frequency award - Selection criteria - …. Other institutional award characteristics: - Age - Monetary value - Frequency award - Selection criteria - …. Selection System award Selection Selection System industry Selection fit Reputation award Reputation award moderating influences

8 Market Selection Producers Consumers MTV Awards People’s choice awards

9 Peer Selection Producers Academy Awards Directors Guild Awards Independent Spirit Awards Screen Actors Guild Awards

10 Expert Selection Producers Consumers Experts Golden Globes Awards National Society of Film Critic Awards New York Critics Circle Awards

11 On the Role of Film Awards

12 Hypotheses Awards are more effectively as means of certification if they are adapted to the selection system dominating the purchase behavior in the industry (segment). Why? Because of high source credibility and salience in the case of ‘fit’Awards are more effectively as means of certification if they are adapted to the selection system dominating the purchase behavior in the industry (segment). Why? Because of high source credibility and salience in the case of ‘fit’  In the case of mainstream films, consumer-selected awards will be more effective than peer or expert selected awards  In the case of art house films, expert-selected awards will be more effective than consumer or peer selected awards

13 Method Empirical setting: U.S. motion picture industry Awards bestowed on films released in awards: –5 peer-selected (e.g. Academy Awards) –5 expert-selected (e.g. Golden Globes) –3 market-selected (e.g. MTV movie awards)

14 Results On average, expert-selected awards more effective than consumer-selected and peer-selected awards Consumer-selected awards are not more credible sources for mainstream movies Expert awards are more credible sources for art house movies, and have a significant positive effect on film performance for art house but not for mainstream films

15 Implications Proliferation of awards:  Art house movie makers should focus on winning expert-selected awards  Mainstream movie makers do not need to fight to win Academy Awards (peer-prize): MTV seems to be equally effective source. Or maybe not focus on awards at all? Enhance signal effectiveness: examine the types of information normally used by consumers to select products and act accordingly

16 On the role of product reviews Expert reviews: help in selecting (experience) products & entertaining in themselves Impact of expert reviews on performance:  Influence effects vs.  Prediction effects

17 On the role of product reviews

19 Hypotheses Relationship between film reviews and film performance depends on type of film involved: –For art house movies: film reviews have an influence effect –For mainstream movies, film reviews have a prediction effect

20 Setting research Movies with their first theatrical release in The Netherlands, in (n=84)Movies with their first theatrical release in The Netherlands, in (n=84) Box office data: opening weekend & cumulativeBox office data: opening weekend & cumulative Film reviews published in the national daily newspapers on release date or 1 day after release date Film reviews published in the national daily newspapers on release date or 1 day after release date – Nature determined by star rankings (as summarized in Film Krant) – Size in cm 2 (including pictures)

21 Results Average critics’ ratings (nature review) for art house movies not significantly different from mainstream filmsAverage critics’ ratings (nature review) for art house movies not significantly different from mainstream films Average space (cm2) allocated to art house movies significantly less than for mainstream movies Average space (cm2) allocated to art house movies significantly less than for mainstream movies Art house movies have smaller budgets, fewer screens, often no high-profile cast, small-scale distributors, build less on prior work (e.g. less sequels)Art house movies have smaller budgets, fewer screens, often no high-profile cast, small-scale distributors, build less on prior work (e.g. less sequels)

22 Results Effects reviews differ depending on type of movie involvedEffects reviews differ depending on type of movie involved The size (not nature) of film reviews is able to influence early art house movie demandThe size (not nature) of film reviews is able to influence early art house movie demand Nor size nor nature of film reviews influence the success of mainstream moviesNor size nor nature of film reviews influence the success of mainstream movies Thus: try to persuade film critics to write reviews about art house films, whatever their nature (but no need to spill resources in the case of mainstream movies)Thus: try to persuade film critics to write reviews about art house films, whatever their nature (but no need to spill resources in the case of mainstream movies)

Questions?