3.1 Media Production
3.1.1 Introduction
The media sector has three legs: content, distribution and devices. In this chapter, we will address content, its production and, specifically, the following questions:
- What are the ingredients of successful content production?
- How is content production being organized on an industrial scale?
- What management tools can be applied to media production?
When it comes to media content—movies, TV shows, music, books, newspapers—it seems that everybody is an expert. It has surrounded us since birth individually and infused our culture collectively. Media content is not merely art and entertainment. It is also a worldwide role model, a trendsetter and moodsetter. Media content exerts influence on our values, our attitudes, our politics and our lifestyles. It is the subject of intense public fascination and scrutiny. It is also an industry and, for the USA, among the largest export businesses.
Creativity is thought of as an individual activity, but it has become an organized business and social activity. Film, theater, opera and software development are all the result of highly organized collaboration and teamwork. Creative content is being created on an industrial scale—the “Dream Factory.” It is a complex process.
3.1.2 Content Production
Production management aims at a smooth and continuous flow of production. It must allocate resources to different activities. It aims to increase productivity. And it must have a system in place to measure and evaluate performance. Production activities in companies are often headed by the Chief Operations Officer (COO). The responsibilities of production management include: purchasing, inventories, and supply chain; process engineering; production scheduling and capacity planning; subcontracting; and locational choices. A sub-set is project management, which tends to be more limited in scope and time.
3.1.3 Special Characteristics in Content Production
The basic stages of content production are similar to those of production more generally. Typically, production requires the following steps:
- Market analysis;
- Concept creation;
- Selection;
- Funding;
- Product design;
- Development;
- Production planning;
- Procurement and deployment of inputs;
- Production and assembly;
- Post-production improvements and quality control;
- Preparation for distribution.
Each of these steps also exists for content production. However, there are indeed differences, as we discussed in ► Chap. 2 The Information Environment. These include:
- An unusually high level of uncertainty about the commercial success of content products.
- Extremely high fixed production costs and low reproduction costs. They require significant upfront capital to make the initial product. This means unusually high economies of scale, which are further increased by network effects: the users of a product partially increase the value of that product to other users.
- There often exist content producers who do not aim to maximize profit, which affects the nature of competition.
- Media content often has public good characteristics: its value goes beyond the immediate benefits to the producers, and it is often impractical to exclude non-payers from enjoying the content.
We will discuss, in particular, the film industry, as it has always been the most commercialized of content media, with dynamics that has often foretold those of other media. In order to understand the success factors for content production, we will explore why one particular content production center—Hollywood—has been so successful, for so long, in so many countries and, potentially, now the Internet. This is despite the fact that Hollywood is a high-cost producer and that it has usually lacked a long-term strategic vision (e.g. it initially totally missed the significance of broadcast TV, cable TV, home video and the Internet). Also, Hollywood’s success is despite the fact that many major international markets have only been partly open, with many of them imposing import quotas for almost a century.1
Yet, none of this seems to have made a difference. Hollywood productions have remained predominant around the world throughout that time, despite countless efforts to support national production and to restrict Hollywood. In 1920, the Hollywood studios accounted for over 70% of the world’s movie revenues. In 2016, they still maintain about the same market share, 67.7.2 During this time, pretty much the same six firms (Universal, Paramount, Disney, Warner Bros., Columbia, 20th Century Fox) dominated and produced the majority of films. (MGM and RKO dropped out; Disney joined.) Not even Houston’s oil companies, New York’s Wall Street and London’s City financial clusters, or Detroit’s automotive industry maintained such long-term global dominance. What does this tell us about the elements for success in content production?
3.2 Content Industries
3.2.1 Early Content
The production of what we now call “media content” goes back to the early days of humanity, when individuals and groups performed for their community or overlords. Over time, this became organized and institutionalized—theater in ancient Greece, gladiatorial spectacles in Imperial Rome, playhouses in Elizabethan London, opera stages in Italy. Some performers were individual content providers, such as bards, troubadours and minstrels. They provided entertainment and news. Others were teams organized as content companies that produced and performed spectacles, plays and mu...