The business of film
The business of film

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5 Film value chain and innovation

Financing a film is in many ways the most difficult part of the process, and is certainly very complex. You’ve learned about some of the sources of finance, including private and public, and how this affects film’s cultural elements.

Maximising returns from adoption of digital models involves a number of new activities within the film value chain. These include early stage investment in audience engagement activities, such as building a buzz on social media (built into production budgets) and handover of some marketing control and data by the distributor to the producer.

Policy initiatives in the UK have explored the structural financial complexities of setting up similar, permanent joint ventures between producers and distributors. See the further reading section for information on the BFI joint venture scheme.

The value chain when viewed from an innovation perspective presents a sequential, three-phase process: idea generation, idea development, and the diffusion of developed concepts. Across all the phases, the creative film team must perform six critical tasks: internal sourcing, cross-unit sourcing, external sourcing, selection, development, and company-wide spread of the idea (Hansen and Birkinshaw, 2007). Each is a link in the chain.

To ensure the best value in a project, you need to take an end-to-end view of innovation efforts. To improve innovation and creativity, decision makers need to view the process of transforming ideas into commercial outputs as an integrated flow – rather like Michael Porter’s value chain for transforming raw materials into finished goods.

Coming up in Week 5

Next week you’ll see how all of this comes together, and how the film eventually gets produced. Go to Week 5 [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .

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