Culture and Commerce: The Value of Entrepreneurship in Creative Industries

277 Pages·2017·1.929 MB·English

by  Mukti Khaire

CULTURE AND COMMERCE
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C U LT U R E A N D
C O M M E R C E
THE VALUE OF ENTREPRENEURSHIP
IN CREATIVE INDUSTRIES
M U K T I K H A I R E
Stanford Business Books
An Imprint of Stanford University Press
Stanford, California
Stanford University Press
Stanford, California
© 2017 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved.
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Printed in the United States of America on acid-free, archival-quality paper
Library of Congress Cataloging-in-Publication Data
Names: Khaire, Mukti, 1973– author.
Title: Culture and commerce : the value of entrepreneurship in creative industries /
Mukti Khaire.
Description: Stanford, California : Stanford Business Books, an imprint of Stanford University
Press, 2017. | Includes bibliographical references and index.
Identifiers: LCCN 2016048652 (print) | LCCN 2016050258 (ebook) |
ISBN 9780804792219 (cloth : alk. paper) | ISBN 9781503603080 (e-book)
Subjects: LCSH: Cultural industries. | Entrepreneurship. | Arts—Economic aspects. |
Arts—Marketing.
Classification: LCC HD9999.C9472 K43 2017 (print) | LCC HD9999.C9472 (ebook) |
DDC 658.4/21—dc23
LC record available at https://lccn.loc.gov/2016048652
Typeset by Thompson Type in 10/14 Minion
CONTENTS
Preface vii
Acknowledgments xvii
PART I
MARKETS, ENTREPRENEURS, AND CULTURE
1 The Business of Culture 3
2 Pioneer Entrepreneurs: Creating Markets
and Changing Minds 27
PART II
INTERPRETING CULTURE: INTERMEDIARIES
IN CREATIVE INDUSTRIES
3 Intermediaries: Constructing Meaning and Value for Markets 49
4 Doing Their Job: The Functions of Intermediaries 73
5 Maximizing Influence: The Features of Intermediaries 98
PART III
PRODUCING CULTURE: PRODUCERS IN CREATIVE INDUSTRIES
6 Creators and Producers: Making Art, Making Markets 125
7 Power and Unpredictability: Key Challenges Facing Producers 145
8 Purpose and Profit: Strategies for Balancing Cultural
and Financial Imperatives 163
vi CONTENTS
PART IV
THE CREATIVE INDUSTRIES: PAST, PRESENT, AND FUTURE
9 New World, Old Rules: Creative Industries in the Age of
Digitalization and Globalization 187
Notes 209
Index 245
PREFACE
I begin this preface by discussing two television shows—UnReal and Project
Runway—a surprising choice given that I don’t watch much reality television.
However, the experiences I had with these shows nicely capture two main
themes of the book, so, in the interests of introducing and motivating this
book with some authenticity, I submit to the reader the following cases.
In the first example, my personal experience with the show UnReal, which
premiered in June 2015, illustrates the importance of entities—critics, review-
ers, and the like—that seem peripheral because they do not produce the works
that are consumed but are actually part and parcel of the creative industries. I
had seen promotions for the new show on Lifetime TV while flipping through
my cable provider’s on demand section. The font used in the advertisement;
the way the title was presented; the title itself, which sounded like teen slang;
and the fact that the show was aired on Lifetime TV, which I associated with
cheesy, sentimental films, all put me off, and I paid no further attention to
the advertisement. A few weeks after my initial dismissal, which was based
on nothing other than gut instinct and evidence-free analysis (a classic situa-
tion of judging a book by its cover), I saw that Emily Nussbaum, the television
critic for The New Yorker magazine had reviewed the show. I was surprised—
the show had not struck me as typical New Yorker material. Moreover, Nuss-
baum had praised the show. The very next evening, I watched every episode of
UnReal that was available on demand. I liked the show; it had feminist sensi-
bilities, as Nussbaum had written, but was also hugely entertaining and bril-
liantly acted, and it opened my eyes to the true extent of the unseemliness and
fakeness in the world of reality television shows (such as The Bachelor), while
also shedding light on the complexities of human nature that make reality
television possible. Even though I didn’t like every episode of the first season,
I nevertheless watched the second season, which aired earlier this year, brush-
ing aside any reservations I had, secure in the knowledge that Nussbaum,
viii PREFACE
the television critic at The New Yorker, had endorsed the show. I discovered
and even appreciated the show entirely because of Nussbaum’s review in The
New Yorker.
The second example highlights the other main category of entities in the
creative industries: the firms that actually engage in the production and sale
of creative works such as books, films, music albums, television shows, and
fashion apparel. These are the producers, and they are located at the intersec-
tion of art and business. Despite my research on the fashion industry and my
particular interest in designers as founders of creative firms, I had never really
watched the show Project Runway (on Bravo from 2004 to 2008 and then on
Lifetime since 2009), which followed participants as they competed for the
approval of a panel of judges comprising well-connected individuals in the
fashion industry. It was never clear to me whether the judges on the show
were looking for creativity (the next Alexander McQueen) or for commer-
ciality (the next Ralph Lauren). It seemed to me that the show, and all other
reality shows seeking the next talented individual, possessed a desire to be
both arbiters of culture and promoters of commerce, a schizophrenic goal that
was unlikely to be achieved to any substantial degree, let alone in full. I felt
perversely vindicated then, on reading in The New York Times1 that Christian
Siriano, the high-profile winner of the fourth season of Project Runway, had
apparently not truly gained acceptance into the inner sanctum of the high-
fashion world, despite having parlayed his win into a viable fashion “line.” The
situation that Siriano found himself in was, I thought to myself, something I
could have predicted, knowing that intangible, social assets do not always fol-
low financial ones, although the reverse can and does happen. The so-called
nouveau riche are familiar with this phenomenon, and anybody working in or
observing the creative industries knows that greater status is accorded to the
penurious artistic genius (writer, painter, sculptor, musician, filmmaker, and
the like) than the creator of best sellers.
These two examples nicely preview the main themes of the book, which is
about the nature, structure, and functioning of creative industries and how
entrepreneurship in these industries can influence broader societal culture.
As the examples above suggest, audiences are often suspicious or ignorant
of new creative works until they are endorsed by critics/reviewers they trust.
Thus producers in creative industries face the daunting task of having con-
sumers discover and accept their product; in addition, producers constantly
struggle to balance the cultural and commercial worlds that they must span to
succeed as a commercial entity that sells cultural creations. These challenges
PREFACE ix
raise some important questions: How and why does any entity (individual
or organization) participate in these highly risky sectors of the economy, let
alone introduce new products? How and why do consumers purchase cul-
tural goods? What do critics stand to gain from introducing audiences to new
works? This book attempts to address these and other relevant questions.
The Key Factors: The Art World, the
Market World, and Entrepreneurship
Although my interest in the creative industries was originally spurred by a
desire to understand the paradox of growth and scaling in commercial firms
that are dependent on selling the work of a single founder (for example, high-
fashion firms are founded to sell the creations of the founding designer), who
presumably cannot create at the scale or speed of an automated process, I
gradually became more interested in how the worlds of art and business co-
exist, interact, and even flourish in the context of creative industries. When I
began to explore the topic in more detail, I found research that described an
entire ecosystem of entities that needed to function together in a particular
pattern of interactions, a situation that engendered stability. Because entre-
preneurship is another area of my interest, I became intrigued by the entre-
preneurial activity and artistic innovations that were occurring throughout
the creative industries, stability notwithstanding, and how these activities af-
fected both the creative industries and society more generally. This book is the
result of my inquiries into the entities that populate the creative industries—
artists, critics and reviewers, and producers—and is informed by decades of
prior academic work that addressed many of these questions from various
angles. I integrate my empirical observations with prior scholarly work to de-
rive conceptual frameworks and models that describe the system of entities,
which I call the value chain, that constitutes the creative industries and facili-
tates the market exchange of cultural goods (the baseline case). In addition, I
explore the implications of the nature and structure of the baseline case for
entrepreneurship and new market creation. Underlying my interest in entre-
preneurship is the belief that entrepreneurship that overcomes the stability
of the creative industries and creates markets for radically innovative artistic
goods, an act I label pioneer entrepreneurship, can have a profound impact on
society and culture. I am aware that this last statement—that commerce can
change culture—is likely to be controversial and therefore is worth interrogat-
ing at multiple levels.