IDEAS home Printed from https://ideas.repec.org/p/clg/wpaper/2019-13.html
   My bibliography  Save this paper

Hollywood Studio Filmmaking in the Age of Netflix: A Tale of Two Institutional Logics

Author

Listed:
  • Allègre L. Hadida
  • Joseph Lampel
  • Amit Joshi
  • W. D. Walls

    (University of Calgary)

Abstract

New online streaming services are challenging long-standing decision-making processes in the traditional motion picture industry, thus placing Hollywood major studios at a crossroads. We use the institutional logics perspective to examine how both traditional studios and new online streaming services make strategic decisions on which films to produce and how these films should be distributed, and scenario analysis to anticipate how their interaction will likely evolve. We argue that the key criteria that studio executives use to make such decisions are shaped by what we define as a commitment institutional logic: decision making heuristics that focus their attention on theatrical release and box office intakes. In contrast, the new online streaming services follow a convenience institutional logic, the product of advanced data analytics to increase subscriptions. In the convenience institutional logic, the need to drive online traffic by providing users with an extensive catalogue of film offerings guides film development and distribution decisions. Whereas the commitment logic aims for mass-market hits in cinemas, the convenience logic seeks to reach a wide range of subscribers at home with micro-segmented content. We compare the two logics, develop four scenarios of how the interaction between them may shape the film industry, and offer recommendations.

Suggested Citation

  • Allègre L. Hadida & Joseph Lampel & Amit Joshi & W. D. Walls, "undated". "Hollywood Studio Filmmaking in the Age of Netflix: A Tale of Two Institutional Logics," Working Papers 2019-13, Department of Economics, University of Calgary.
    • Handle: RePEc:clg:wpaper:2019-13
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anita Elberse & Jehoshua Eliashberg, 2003. "Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures," Marketing Science, INFORMS, vol. 22(3), pages 329-354.
    2. François A. Carrillat & Renaud Legoux & Allègre L. Hadida, 2018. "Debates and assumptions about motion picture performance: a meta-analysis," Journal of the Academy of Marketing Science, Springer, vol. 46(2), pages 273-299, March.
    3. De Vany, Arthur S. & Walls, W. David, 2004. "Motion picture profit, the stable Paretian hypothesis, and the curse of the superstar," Journal of Economic Dynamics and Control, Elsevier, vol. 28(6), pages 1035-1057, March.
    4. repec:ulb:ulbeco:2013/249805 is not listed on IDEAS
    5. Andrew Ainslie & Xavier Drèze & Fred Zufryden, 2005. "Modeling Movie Life Cycles and Market Share," Marketing Science, INFORMS, vol. 24(3), pages 508-517, November.
    6. W. D. Walls, 2005. "Modelling heavy tails and skewness in film returns," Applied Financial Economics, Taylor & Francis Journals, vol. 15(17), pages 1181-1188.
    7. Ravid, S Abraham, 1999. "Information, Blockbusters, and Stars: A Study of the Film Industry," The Journal of Business, University of Chicago Press, vol. 72(4), pages 463-492, October.
    8. Royston Greenwood & Amalia Magán Díaz & Stan Xiao Li & José Céspedes Lorente, 2010. "The Multiplicity of Institutional Logics and the Heterogeneity of Organizational Responses," Organization Science, INFORMS, vol. 21(2), pages 521-539, April.
    9. Ramya Neelamegham & Pradeep Chintagunta, 1999. "A Bayesian Model to Forecast New Product Performance in Domestic and International Markets," Marketing Science, INFORMS, vol. 18(2), pages 115-136.
    10. Victor Ginsburgh & Sheila Weyers, 1999. "On the Perceived Quality of Movies," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 23(4), pages 269-283, November.
    11. Gerben Bakker, 2007. "The Evolution of Entertainment Consumption and the Emergence of Cinema, 1890–1940," Advances in Austrian Economics, in: The Evolution of Consumption: Theories and Practices, pages 93-137, Emerald Group Publishing Limited.
    12. Amit Nigam & William Ocasio, 2010. "Event Attention, Environmental Sensemaking, and Change in Institutional Logics: An Inductive Analysis of the Effects of Public Attention to Clinton's Health Care Reform Initiative," Organization Science, INFORMS, vol. 21(4), pages 823-841, August.
    13. Hayagreeva Rao & Philippe Monin & Rodolphe Durand, 2005. "Border crossing : Bricolage and the Erosion of Categorical Boundaries in French Gastronomy," Post-Print hal-02311675, HAL.
    14. Arthur De Vany & W. Walls, 1999. "Uncertainty in the Movie Industry: Does Star Power Reduce the Terror of the Box Office?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 23(4), pages 285-318, November.
    15. Durand , Rodolphe & Szostak , Bérangère & Jourdan , Julien & Thornton , Patricia, 2013. "Institutional Logics as Strategic Resources," HEC Research Papers Series 1004, HEC Paris.
    16. Rodolphe Durand & Hayagreeva Rao & Philippe Monin, 2005. "Border Crossing: Bricolage and the Erosion of Categorical Boundaries in French Gastronomy," Post-Print hal-00457938, HAL.
    17. Nicky J. Welton & Howard H. Z. Thom, 2015. "Value of Information," Medical Decision Making, , vol. 35(5), pages 564-566, July.
    18. William Ocasio, 1997. "Towards An Attention‐Based View Of The Firm," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 187-206, July.
    19. Mohanbir S. Sawhney & Jehoshua Eliashberg, 1996. "A Parsimonious Model for Forecasting Gross Box-Office Revenues of Motion Pictures," Marketing Science, INFORMS, vol. 15(2), pages 113-131.
    20. Moul,Charles C. (ed.), 2005. "A Concise Handbook of Movie Industry Economics," Cambridge Books, Cambridge University Press, number 9780521843843, September.
    21. Luis Aguiar & Joel Waldfogel, 2018. "Netflix: global hegemon or facilitator of frictionless digital trade?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 419-445, August.
    22. Patricia H. Thornton, 2001. "Personal Versus Market Logics of Control: A Historically Contingent Theory of the Risk of Acquisition," Organization Science, INFORMS, vol. 12(3), pages 294-311, June.
    23. Durand, Rodolphe & Hadida, Allègre L., 2016. "Logic combination and performance across occupational communities: The case of French film directors," Journal of Business Research, Elsevier, vol. 69(7), pages 2371-2379.
    24. Mary Ann Glynn & Michael Lounsbury, 2005. "From the Critics’ Corner: Logic Blending, Discursive Change and Authenticity in a Cultural Production System," Journal of Management Studies, Wiley Blackwell, vol. 42(5), pages 1031-1055, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicolas R. Weber & André Marchand & Reinhard E. Kunz, 2024. "The global impact of public and private funding on cultural and economic movie success: evidence from German film funding," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 48(2), pages 259-283, June.
    2. Joël Hellier, 2022. "Asymmetric Globalization and Top Performers Income," Working Papers REM 2022/0242, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Nam, Jinyoung & Ro, Dan & Jung, Yoonhyuk, 2023. "Netflix's presence: Investigating content producers' understanding of Netflix in the Korean media industry," Telecommunications Policy, Elsevier, vol. 47(4).
    4. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    5. Sjøvaag, Helle & Olsen, Ragnhild Kr. & Ferrer-Conill, Raul, 2024. "Delivering content: Modular broadcasting technology and the role of content delivery networks," Telecommunications Policy, Elsevier, vol. 48(4).
    6. Thorsten Hennig-Thurau & S. Abraham Ravid & Olav Sorenson, 2021. "The Economics of Filmed Entertainment in the Digital Era," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 157-170, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Allègre Hadida, 2010. "Commercial success and artistic recognition of motion picture projects," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(1), pages 45-80, February.
    2. Moez Hababou & Nawel Amrouche & Kamel Jedidi, 2016. "Measuring Economic Efficiency in the Motion Picture Industry: a Data Envelopment Analysis Approach," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 3(3), pages 144-158, December.
    3. Natalia Gmerek, 2015. "The determinants of Polish movies’ box office performance in Poland," Journal of Marketing and Consumer Behaviour in Emerging Markets, University of Warsaw, Faculty of Management, vol. 1(1), pages 15-35.
    4. Don M. Chance & Eric Hillebrand & Jimmy E. Hilliard, 2008. "Pricing an Option on Revenue from an Innovation: An Application to Movie Box Office Revenue," Management Science, INFORMS, vol. 54(5), pages 1015-1028, May.
    5. Jehoshua Eliashberg & Anita Elberse & Mark A.A.M. Leenders, 2006. "The Motion Picture Industry: Critical Issues in Practice, Current Research, and New Research Directions," Marketing Science, INFORMS, vol. 25(6), pages 638-661, 11-12.
    6. Fernanda Gutierrez-Navratil & Victor Fernandez-Blanco & Luis Orea & Juan Prieto-Rodriguez, 2014. "How do your rivals’ releasing dates affect your box office?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 71-84, February.
    7. Fei Peng & Lili Kang & Sajid Anwar & Xue Li, 2019. "Star power and box office revenues: evidence from China," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(2), pages 247-278, June.
    8. Angela (Xia) Liu & Tridib Mazumdar & Bo Li, 2015. "Counterfactual Decomposition of Movie Star Effects with Star Selection," Management Science, INFORMS, vol. 61(7), pages 1704-1721, July.
    9. Kim, Taegu & Hong, Jungsik & Kang, Pilsung, 2015. "Box office forecasting using machine learning algorithms based on SNS data," International Journal of Forecasting, Elsevier, vol. 31(2), pages 364-390.
    10. Durand, Rodolphe & Hadida, Allègre L., 2016. "Logic combination and performance across occupational communities: The case of French film directors," Journal of Business Research, Elsevier, vol. 69(7), pages 2371-2379.
    11. Amanda S. King & John T. King & Michael Reksulak, 2017. "Signaling for access to high-demand markets: evidence from the US motion picture industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 41(4), pages 441-465, November.
    12. Katherine Goff Inglis & Saeed Zolfaghari, 2017. "A Review of Scheduling Problems and Research Opportunities in Motion Picture Exhibition," Interfaces, INFORMS, vol. 47(2), pages 175-187, April.
    13. C F Elliott & R Simmons, 2007. "Determinants of UK box office success: the impact of quality signals," Working Papers 584026, Lancaster University Management School, Economics Department.
    14. Gaenssle Sophia & Budzinski Oliver & Astakhova Daria, 2018. "Conquering the Box Office: Factors Influencing Success of International Movies in Russia," Review of Network Economics, De Gruyter, vol. 17(4), pages 245-266, December.
    15. repec:lan:wpaper:1090 is not listed on IDEAS
    16. Jordi McKenzie, 2010. "Do 'African American' films perform better or worse at the box office? An empirical analysis of motion picture revenues and profits," Applied Economics Letters, Taylor & Francis Journals, vol. 17(16), pages 1559-1564.
    17. Darren Filson & James H. Havlicek, 2018. "The performance of global film franchises: installment effects and extension decisions," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 447-467, August.
    18. Ronny Behrens & Natasha Zhang Foutz & Michael Franklin & Jannis Funk & Fernanda Gutierrez-Navratil & Julian Hofmann & Ulrike Leibfried, 2021. "Leveraging analytics to produce compelling and profitable film content," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 171-211, June.
    19. repec:lan:wpaper:1176 is not listed on IDEAS
    20. repec:lan:wpaper:1111 is not listed on IDEAS
    21. Ana Suárez-Vázquez, 2011. "Critic power or star power? The influence of hallmarks of quality of motion pictures: an experimental approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 35(2), pages 119-135, May.
    22. Judy Ma & Dongling Huang & M. Kumar & Andrei Strijnev, 2015. "The impact of supplier bargaining power on the advertising costs of movie sequels," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 39(1), pages 43-64, February.
    23. repec:lan:wpaper:1089 is not listed on IDEAS
    24. Darlene C Chisholm, 2011. "Motion Pictures," Chapters, in: Ruth Towse (ed.), A Handbook of Cultural Economics, Second Edition, chapter 39, Edward Elgar Publishing.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:clg:wpaper:2019-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Department of Economics (email available below). General contact details of provider: https://edirc.repec.org/data/declgca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.