Cultural Industries Revisited

Paul M. Hirsch
J. L. Kellogg Graduate School of Management, Department of Organization Behavior, Northwestern University, Evanston, Illinois 60208-2001, [email protected]

t is a commonplace in most lines of economic endeavor that those who process raw materials, transform them and merchandise the nished product receive the lions share of economic rewards. The eld of cultural endeavors is relatively unique in that we strongly desire to reward our creators, commune with their audiences, but avoid or ignore the organizational middlemen linking each to the other. (Hirsch 1985 p. 110)

Abstract
In my early Processing Fads and Fashions: An OrganizationSet Analysis of Cultural Industry Systems (1972), the middle throughput phase, or most organizational aspect of cultural industries, was emphasized. In this depoliticized exploration of what Adorno (1991) had earlier characterized as the industrialization of high culture, and Powdermaker (1950) as Hollywoods dream factory, I emphasized the key roles of gatekeeper and distributor organizations as critical in connecting the artist/creators to audience/consumers of mass, or popular culture (as it had more acceptingly come to be called). Altogether, this network of organizationsfrom creators (artists, musicians, actors, writers) and brokers (agents), through the cultural products producers (publishers, studios), distributors (wholesalers, theaters), and media outletscollectively constitute cultural industries. This article on industries producing cultural productsdened as nonmaterial goods directed at a public of consumers, for whom they generally serve an esthetic or expressive, rather than a clearly utilitarian function (Hirsch 1972 p. 641)appeared at the same time that organizational sociologys focus on what became known as the production of culture took off, and continued to ourish into the 1990s (Peterson 1994, Crane 1992). How has the study of cultural industries changed over the last generation? A simple answer is that the subjectthe key role of distribution and the importance of organizational middlemen in the making and sale of popular cultureremains analytically the same. From actors, musicians, and writers; through studios, labels and publishers, to videocassettes, movie theaters, record stores, and booksellers (in stores or via the Internet)cultural products ow. How this sequence is organized and traversed remains a fascinating forest of power plays and techniques, employed by role-occupants in the same positions as have existed since the advent of mass media. While this substantive eld has changed little analytically, what we also

see is a wondrous expansion in the disciplinary approaches being taken to examine the multitude of topics available for examination under the broad rubric and framing of the term, cultural industries. Because I was a graduate student at the time (my roommate dared me to submit the Processing. . . paper to the American Journal of Sociology), it is a great pleasure to nd the concept has retained its value for other researchers since that time. In this article, I will (1) reexamine and discuss the original framing of the term cultural industries; (2) briey review some of the more recent complementary perspectives which expand the possible arenas for studying this topic; and (3) append a short note on how the more recent inclusion of nonprot cultural products (e.g., symphonies, museums) in this framework poses interesting analytical questions and opportunities.

(Economic Sociology; Organizational Field; Cultural Industry; Mass Media; Entertainment)

Revisiting the Original Framework

The concept of industry system takes the focus of attention away from any single rm or role in the sequence of discovering, producing, and delivering a product, redirecting attention to the interconnections and interdependencies between them in order to get to the nal (nished) product or outcome. As Scott (1995) notes, it is similar to the concept of organizational eld (DiMaggio 1991), which maps out the universe of organizations engaged in processing a product or project from its inception to completion. In the case of cultural products, by the start of the new millennium the organizational eld would encompass roles and organizations ranging from the talent agencies and personal managers handling the artists career to the
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satellites carrying signals for both broadcast organizations and consumers, internet delivery of recordings and song lyrics, and video cassettes of movies for purchase and rental. In between these are a small number of powerful intermediate organizations producing and distributing the movies, books, recordings, and television programs which are developed and delivered at the earlier (production) and later (retail) stages of these products creation and distribution (Stearns et al. 1987, Barnett and Starkey 1994, Saundry 1998). The extensive risk sharing and outsourcing of numerous aspects of this production, marketing, promotion, and distribution process began early in the history of entertainment. Interestingly, these practices recently diffused extensively throughout American business organizations, being adopted widely during the 1980s and 1990s (Arthur and Rousseau 1997). At GE and other large corporations, this process mapping conception has been applied to the full production processfrom the start to nish of a product or project. Abrahamson, and Lawrence and Phillips have noted similar sequences of (a) symbiotic interindustry sequences in the production and distribution of management fads and fashions, such as total quality management; (Abrahamson 1996, 1999); and (b) traced the increasing importance of (outsourced) knowledge and design components for increasing numbers of industrial and service products (Lawrence and Phillips 2000). Within this dynamic cultural industry eld, there continues to be much jockeying for entry and positioning as new technologies and legislation enable moves towards vertical integration and cross-ownership of producing and distributing organizations. Stratication within each industry is based partly on each rms ability to control the distribution of marginally differentiated products. Competitive advantage lies with rms best able to link available input to reliable and established distribution channels (Hirsch 1972 p. 646). Recent large-scale corporate mergers have increased concentration ratios and may alter the internal composition of entertainments organizational eld. One sign of a possibly countervailing force is the increasing utilization of the Internet by musical group and author producers to release new materials without going through the more traditional routes of recording companies and publishers as their distributors. These developments within the cultural industry eld continue to move in various unanticipated directions. One signicant indication is the decision of its major distributor organizations to combine, in such recent megamergers as: TimeWarner with Turner Broadcasting; Disney with Capital Cities (ABC) Broadcasting; News Corp.s purchase of Simon and Schuster publishers, combined with its ownership of 20th Century Fox (movies), Fox

Television Network and major newspapers; the Bertelsmann Co.s recent acquisition of Random House; and, nally, AT&Ts purchase of 60% of the cable television industry.1 It is important to note this overall increase in concentration is primarily in the distribution and retail sectors of this industry eld. As the cost of technologies for making a record, printing a book, or lming a movie continues to decrease, control over their distribution becomes more critical for organizations seeking to reduce uncertainty over the outcome of their investments (Miller 1996, 1997, Hirsch 1992, Turow 1992). As the level of concentration increases across these media, an interesting empirical and researchable question will be whether the diversity of what becomes available is diminished. Particularly for books and recordings where consumers access to alternative delivery remains limited, a narrowing in the number of large-selling releases by new authors and publishers, or unknown recording groups and labels may be anticipated (Schiffrin 1996, Peterson and Berger 1975, 1996, Burnett 1992, Lopes 1992). For lms and television, the increase in available outlets (e.g., satellite channels, cassette sales) may offset the increase in concentration of conventional distribution resources. A rise in the number of outlets available for lm and television productions is facilitated largely by the fragmentation of the retail television spectrum. From a small number of three television networks and some ancillary independent channels for the rst 40 years of this commercial medium, the 1990s have seen an explosion of channels available via cable and satellite distribution. Television has joined radio as a medium of formats, with channels now specializing in headline news, courtroom trials, stock market reports, romance movies, and cartoons. The once dominant networks are still important players, but less powerfulwith a vastly reduced audience share, now closer to 40% than their earlier 90%. An intriguing cultural question arising from this is whether the U.S. still has as clear a single dominant popular culture, or whether (like radio, magazines, and now television formats), there is less of a national pop culture (network TV shows, with news at 6:00or nothing else), versus a multitude of what Gans (1974) and Cawelti (1976) earlier envisioned as a variety of taste cultures, each receiving its fare with minimal exposure to the tastes of others. This revisit to the original cultural industry systems model nds the industry rife with substantive changes, yet analytically much the same as at the time of the original formulation. It still costs far less to produce many books, records and lms than it costs to distribute and

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retail them. Competition in the industry is thus more focused in this latter activity. During the 1990s, a series of large mergers was undertaken, probably in large part to lower these costs and enable the reduction of uncertainty in moving successful products through the cultural industry system. Unless (and until) these succeed in virtually ending the market uncertainty endemic to cultural industries over which cultural product will become the next hit or bestseller, this does not alter the analytical focus of the industry system model. Rather, it provides a process-orientation enabling the analyst to trace the critical points at which cultural products are located, sponsored, promoted, and retailed. This tracks the complexity of a cultural products routes and chances for success, at the same time that key industry members seek to reincorporate aspects of production and distribution which had previously been outsourced. The cultural industry system model, initially part of the production of culture school of organizational sociology, has since been extended and complemented by exciting developments in other disciplines, to which I now turn.

Recent Formulations on Cultural Industries

In an overview of the recent economics literature, DiMaggio (1994) noted an increase in the number of articles addressing cultural topics. In economics and the related eld of business strategy, an impressive number of studies of cultural industries have appeared since 1990. In Table 1 (Historical Overview of Cultural Industries), we see these publication dates correspond roughly to the industry prole I label as the New Gold Rush, in Column 3 (1980s2000). During this period, not only were the providers and distributors of programming (software) for the major media undergoing dramatic changes; the very equipment (hardware) over which it would be transmitted and received (cables, wireless, satellites, Internet transmissions) was also in a state of ux. (The key issues portrayed on Columns 1 and 2, for the industrys earlier eras, were addressed in the previous section, and are covered more extensively in the attendant production of culture literature.) For economic modelers, this poses a question of how people will allocate their leisure time, i.e., which of the many platforms offering competitive entertainment, and seeking the consumers time and money, would succeed in gaining it? Following Column 3 of Table 1, we nd conceptions of the mass audience giving way to mass customization with attendant changes in marketing campaigns, advertising, and images presented. The 1999

annual meetings of the National Association of Broadcasters was reported (Dretzka 1999) as presenting a contest in which battle lines are being drawn between the old guardradio and televisionand the new mavericks of the Internet. Translated into the language of strategic management, here is a contest between a previously dominant ve-forces economic framework (Porter l980) experiencing threats from new entrants and substitute technologies, as well as changes in relations with suppliers. For disciples of Schumpeter, a possible time for creative destruction; for DAveni and Gunther (1994), an example of overdue hypercompetition. For researchers interested in cultural industries, these potential transformations pose a great opportunity for studies across disciplines, of networks, strategic alliances, new corporate strategies, interorganizational conict, and the implementation of deregulation (e.g., AT&Ts takeover of 60% of the cable television industry). Researchers in each of these subelds are, happily, responding to this challenge and opportunity. For a cultural product to succeed, networks of relationships among a multitude of professionals must be mobilized, coordinated, and managed to get the job done (Burt 1992, Noria and Eccles 1992, Granovetter 1982). In cultural industry systems, the formal and informal contracts required cross-organizational boundaries and often involve freelance professionals and their associates. Quantitative and qualitative studies of these networks, as well as comparisons between those that perform best and worst, are progressing and becoming available. An extensive bibliography of interesting projects examining these social networks is found in Jones (1996). In the corporate strategy arena, we nd the resourcebased theory of strategy (Barney 1991) has been applied to the lm industry and extended by Miller and Shamsie (1996); and innovative studies by Robins (1993), Greve (1996), and Eisenmann and Bower (this issue). These are but a small sample of the expansion of frameworks outside of the production of culture perspective which, all combined, lead to the conclusion that there is much left to examine in the eld, and it is well under way. An additional area of increasing value and importance for social scientistsbut beyond the scope of this review is the study of meaning and discourse conveyed through the books, lms, and television programs to which we are exposed daily.

A Note on Cultural Industries and Nonprot Organizations

To the extent organizational sociology has reestablished the observation that ne art and popular culture both exist in social environments which commingle elements of art and commerce, it

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Table 1

Cultural Industries: A Historical Overview 1940s 1950s1970s Orderly Transitions 1980s2000 New Gold Rush

Industry Prole Framings and Context

Industry Stable, Controlled (Vertical Integration) Mass Culture: lm factories; golden age. 3 Radio Networks 4 Record Companies 5 Movie Studios

Diversity and Segmentation begin: Less Concentration r r Restabilization. New Record Labels; FM stations. Newspaper zoning begins; CATV gets going, MCI shows up.

Mass Customizations: postmodern sensibilities; everything everywhere, and commonly owned (MTV & Nick; CNN & Warner Bros.). New entrants and entrepreneurs; networks reeling All negotiable; Big mergers r r multimedia; Focus more international Computing & Media coverage; websites and Internet emerge; New Telecomm Act Restricts Field; Hardware issues contested. DiMaggio, broadening cultures denition; DAvenis hypercompetition; Turowchanging company practices; Gitlinpolitical impacts.

Locus of Control

Throughput Production (intermediaries) in control Software Hardware Technology stable; mass media as wartime ally

Creators (input) freed up. New production companies arrive. Rise of new styles and players. Television arrives and conquers Radio r r Outlet for new genres.

Technology & Legal Arenas

Analytical Frameworks Include:

Bain, Industrial Organization Economics The Frankfurt School

Peterson, recording industry studies; Gans, high culture and popular culture.

has rendered an intellectual service. But in making this point, we may well have glossed over the question of what are the proportions of, and emphases on, art versus commerce found within each area? (Hirsch 1978 p. 317)

Both sociological and economic approaches to the arts have encouraged the conception of ne art as a commodity no different than popular culture. But in fact, it has a far different audience (smaller, more elite), and a greater capacity to accurately estimate its costs and the ows of incoming revenue. Although the ne arts (fortunately) fall short of meeting my denition of cultural products and industriesas the most entrepreneurial, speculative segments of the industry, and far more committed to the size of the nancial return than to the quality of the productions which yield itthe same rolesets are analytically operative: artists and managers at the input stages, and organizations producing and distributing their output (classical music, monographs, art lms). With the understanding that maximal prots reign less as the organizational goal in these settings (for nonprots breaking even is cause for celebration), and that aesthetic

content has clearer standards (which are taken more seriously than for pop culture), I am pleased to see the cultural industry concept extended to the nonprot (more elite) sectors of the study of cultural organization. For consumers, the key feature common to both sectors remains the greater aesthetic value of the cultural productions than for more utilitarian commodities, such as BandAids. The extension of the cultural industry concept in this way suggests a continuum from cultural to utilitarian usage of many consumer products, enabling its extension to such additional settings as gourmet food, professional sports, and symphony orchestras.

Conclusion
On a personal note, I am naturally delighted that the cultural industry concept continues to be useful for analyzing the popular culture around us. It connects to the wider movements in economic sociology to analyze and construct organizational elds, and address the social construction of markets of all kinds. The idea of tracing products across organizations rather than limit analysis to a single rm was fairly original at the time this article rst

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appeared. With some notable exceptions, this processual emphasis remains underrepresented in studies of organizations and industries. Future developments will benet from addressing the sites visited as less static and more of a dynamic moving target. Finally, more consideration of whether the cultural products being analyzed are considered creative and/ or well-crafted, and even good or bad by other criteria, is a luxury which our elds can afford to include in our analyses now and then. Our personal interest in cultural industries invites pleasure in knowing that so long as the prediction of demand and taste preferences remains elusive, cultural goods will continue to be overproduced, with the result that we may all have continued access to diverse offeringsa cultural state from which we all benet.
Acknowledgment
This article is a revision of presentations at two conferences, Research Perspectives on the Management of Cultural Industries and Craft and Commerce in Cinema, held at New York Universitys Stern School in 1997 and 1998. The author wishes to thank Joseph Lampel, Stephen Mezias, Jamal Shamsie, and Theresa Lant for organizing these and making this paper possible, and to thank the Northwestern Universitys Institute for Policy Research for nancial support in conducting this research.

Endnote
The description of the degree of separation of these organizational activities was noted as variable in the initial (1972) article. There, I noted both (1) A distinctive feature of cultural industry systems at the present time is the organizational segregation of functional units and subsystems. (p. 644, italics added); and (2) In an earlier, more stable environment, that is less heterogeneous markets and fewer constraints on vertical integration, the production of both lms and popular records was administered more bureaucratically: lower level personnel were delegated less responsibility, overhead costs were less often minimized. . . (p. 646). Which of these states the industry will move towards during the coming decades remains a fascinating empirical question.
1

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