Risky Business pp7 Flashcards
Risky Business
Risk is found in all human activity
Very little consensus about how to define risk
Risk is something which can be measured – 1921- Frank knight
Holton- 2004- for risk to exist the following conditions must exist-
Uncertainty about potential outcomes
Outcome has to matter in terms of providing utility
Example: Jumping out of an airplane with no parachute is not risk
What is a risk?
Common definitions:
A situation involving exposure to danger.
To expose someone or something to danger, harm, or loss.
Business definition: NYU School of Business
“…a combination of danger and opportunity…”
History of Risk
Current existence possible due to risk
Someone has to be willing to take a risk and challenge the status quo
We are exposed to risk everyday- deliberate and not deliberate
Risk and survival have gone hand in hand
Prehistoric humans- short lives
Physical risk and reward went hand in hand- risk taker->
food/mate/chance of survival
More on History of Risk
Transportation created further risk
Shipping->wealthy risked their finances
Poor risked their lives
Risk provides opportunities and rewards
Also uncertainty and loss
How does production work To reduce risk?
SURPLUS of talent
This talent must meet needs of PROFIT SEEKING firms
Talent pushes up against an INPUT BOUNDARY
Filter to select small group of creative talent
BOUNDARY SPANNERS help in the process
Boundary Spanners Agents, Managers, Scouts, Others
OUTPUT BOUNDARY
Output Boundary- Sales, Marketing, Publicity, Advertising
GATEKEEPERS Select and disseminate a handful of products to the public
Input and output boundaries
Boundary spanners- people that connect artists and firms
Audition
Social events
Networking
Input boundary may be broken
Manufacture the product- music, movie, book, program
Marketing
Interviews
Promotional events
Contests
Publicists
Sales
Breach the Output boundary- filter to reach the audience
Products aim for…
Surrogate consumers- a commercial enterprise, consciously engaged and paid by the consumer or other interested party on the behalf of the consumer to make or facilitate selection decisions on behalf of that consumer.
Potential social Risks
Surrogate shoppers might behave contrary to the interests of the clients they represent
Might have a powerful vested interest in preserving their own businesses
Incompetence and mistakes in judgment may be compounded by maliciousness, mismanagement, greed, and fraud
The decision criteria of surrogate shoppers may differ significantly from those of clients.
Potential social benefits
Protection from harm and efficient use of resources
Surrogates often possess greater knowledge- Market Maven/Opinion Leader
Have made a large volume of similar decisions
How do surrogate consumers make decisions?
Marketing may reach out to gatekeepers such as EW, People, New York Times, Washington Post
These opinion leaders/market mavens/connectors/surrogate consumers then pick some products
Review those products
Amazon- Vine Voice
Payola= Pay + Victrola- illegal in 1960
Independent Record Promoters- also illegal
Payments made for high visibility displays
SYNERGY- media conglomerates that own a variety of media
Minimizing risk
Adhere to CULTURAL CONVENTIONS
Established genres, topics, and styles
Genres- organizational devices- allow for working within known framework
Not fitting in to a genre can make marketing and salability difficult
Human beings categorize and go with the known
Production Perspective
Producers have to be careful on what they make a film on
Hollywood Surefire
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Who is Frank Knight?
Risk is something that can be measured
RISK: UNCERTAINTY OF POTENTIALLY OUTCOMES
Not knowing what will happen
Risk in 2 words!
RISK IS A COMBINATION OF DANGER AND OPPORTUNITY!!!
What did Holton say?
Holton- 2004- for risk to exist the following conditions must exist-
Uncertainty about potential outcomes
Outcome has to matter in terms of providing utility
Example: Jumping out of an airplane with no parachute is not risk
What does risk must have?
Someone has to be willing to take a risk and challenge the status quo
We are exposed to risk everyday- deliberate and not deliberate
Rich and Poor Risks:
poor are risking their lives=
Rich was risking their wealth
What makes a fluke risk?
Chance does.
How does production work To reduce risk?
SURPLUS of talent
This talent must meet needs of PROFIT SEEKING firms
Talent pushes up against an INPUT BOUNDARY
Filter to select small group of creative talent
BOUNDARY SPANNERS help in the process
Boundary Spanners Agents, Managers, Scouts, Others
OUTPUT BOUNDARY
Output Boundary- Sales, Marketing, Publicity, Advertising
GATEKEEPERS Select and disseminate a handful of products to the public
Boundary spanner:
Boundary spanner: person and agency that are looking for ppl that have a certan talent. They seek ppl to bring into their movie
Gatekeepers:
Gatekeepers: they are the ones who decide who ppl with talent make it out to the public
Surrogate consumer
Surrogate consumers- a commercial enterprise, consciously engaged and paid by the consumer or other interested party on the behalf of the consumer to make or facilitate selection decisions on behalf of that consumer.
Surrogate shoppers: Influence in ppl
Protection from harm and efficient use of resources
Surrogates often possess greater knowledge- Market Maven/Opinion Leader
Have made a large volume of similar decisions
SYNERGY
SYNERGY- media conglomerates that own a variety of media
EX: DISNEY GET PPL TO BUY SHIT, FAMOUS
GENRE
GENRE: It allows ppl to know what to expect.
Safe way to push a product
What is Paola?
Paola: Pay+Victrola-illegal in 1960s, a lot of bribing to get good reviews, BUT ARE LIES
How do films minize risks?
STICK TO RULES OF CULTURE AND GENRE
Adhere to CULTURAL CONVENTIONS
Established genres, topics, and styles
Genres- organizational devices- allow for working within known framework
Not fitting in to a genre can make marketing and salability difficult
Human beings categorize and go with the known
The secondary market
Alternative opportunities to generate profit from a cultural product beyond its domestic sale in its original format
Risk minimizers
Development and productions costs are already dealt with
Flops can be transformed in to hits in the secondary market
Syndication (television shows)
Certain shows created for syndication
Content tends to follow formula- CSI
Overproduction
EX: JURASSIC PARK, THEY MADE A LOT OF MONEY AND THEN FAILED
Another way to minimize risk
Overproduce the product
One or two products are hopefully bound to take
Some may become sleeper hits
Overproduction allows for the production of products which
would otherwise not have seen the light of day
For example: The success of Jurassic World allowed for the losses
from Blackhat to be less painful
Sequels/prequels/remakes/spinoffs
THEY EXPAND THEIR UNIVERSE TO CONTINUE THE LEGACY OF THE MOVIE
They already have an audience aimed from the past and they will be successful
EX: MY LITTLE PONY
they make the new show so much nicer and fun
Profit
In the music business:
Changes in technology allow buyers to purchase single songs
Profits plummeted between 2002-2010
Fastest growing revenue source today- streaming services
Rights holders are paid as little as $.006 to $.0084 per stream
The music industry powerhouses such as Beyonce, Taylor Swift, Adele keep it going
Winner-Take-All Market
Music created more by professional song writers and producers
Formulaic movies
Amazon, Netflix, they invest big money to put it out to the public
Stories must stay formulaic
Formulaic stories have dominated
Soap operas
Sitcoms
Who dunnit
The conversation is changing with Netflix, Amazon, Hulu etc.
Creating individual shows which go on to become huge hits
Production hits
All mediums go with personnel with proven track records
Actors
Directors
Producers
Studios
Shonda Rhimes- Grey’s Anatomy success How To Get Away With Murder & Scandal
MAKING TRENDS
If media is about minimizing risk and garnering profit
Certain trends come to the fore:
Reality TV- inexpensive to produce but can be huge hits- Survivor, Bachelor/Bachelorette
Making Trends & Reality TV
Compared to soaps and sitcoms, reality TV is often financed by people “starring” in the show
Very little money paid to reality TV stars (unless you are a Kardashian)
No scripts (really?!) so no writer fees
Flexible norms of production- no set scenario,
no set number of episodes or fewer episodes
Profits, if any, from reality TV can be applied to shows which take
a lot of money to produce
Reality TV can feature brands from corporate sponsors
Making Trends & Reality TV
Producers push the main person they wanna win shit on the tv show
