5 Culture, economy, value and power
This week you have explored how the film industry has both economic and cultural value and how it is also part of the creative industries.
As you have seen, while film provides a service that can be bought and sold in the marketplace, it also provides value in terms of cultural benefits, which may be social or symbolic.
Public policy plays an important role in the film industry, particularly in markets outside the US. You’ve examined the concept of the value chain in the business of film and you’ve seen who the key holders of power are.
You have looked at the concepts of power and bargaining power. From the wider business perspective, this concept is addressed by Michael Porter’s five forces framework for industry analysis (Porter, 1979). This framework was originally developed to assess the attractiveness (profit potential) of different industries. The five forces make up an industry’s structure:
- the threat of entry into an industry
- the threat of substitutes to the industry’s products or services
- the power of buyers of the industry’s products or services
- the power of suppliers into the industry
- the extent of rivalry between competitors in the industry.
Talent can be seen as being in the supplier position as they are supplying the industry with the product or service it needs. Buyers are those paying for the talent, including the distributors.
The five forces framework can provide useful insight into the powers at play in the film industry. Your analysis of the industry throughout this course may well prompt many questions about the implications of these forces.
Coming up in Week 2
Next week you are going to take a look at the development process, the process that takes an idea for a story and turns it into a valuable film project worth investing in. You'll focus on what happens right at the very beginning of the value chain and meet some of the key players. Go to Week 2.