Monday, February 27, 2012

Risk and Reward in Media Business

In economics we talk a good deal about the interplay between risk and investment. It could be investment in an emerging market, in human capital (education) or in the government via putting money in the bank; however, the one common thread about all investments is that the reward must outweigh the risk for most people to even consider taking the plunge. Roberts, in his article about the creative/ commercial clash, is giving us a glimpse of how a real world industry deals with this dichotomy of risk and reward, and unfortunately, I think he is right about economics stifling creativity—but things are changing…
Roberts finds that there is a difficult and confusing interaction of decision making processes on both sides of the media industry because of the way that economics influence media content such that the three party system is upheld and networks continue to make a profit. He talks about it briefly but I think Adorno and Horkheimer’s theory about the culture industry, while somewhat over the top or insidious, remains salient in this situation. The synopsis is brief but still helps our understanding. A capitalist system causes our media products inculcate the masses into a false consciousness of new, innovational culture by feeding us the same themes and idea in our media disguised under slightly different “veils” time and time again. Why? So the masses continue to consume the same ideas and subsequent media products and give the producers the ability reduce that risk vs. reward issue I brought up earlier.
While dark and gloomy I do not think the culture industry encapsulates the whole story here; however, it does help to explain why we have 5 Fast and the Furious movies, which in and of itself is fairly gloomy thing. As the article points out sequels already have a built in model for success in that there is substantially less risk involved with its production because it already has a fan following. Therefore, advertisers know who it is geared toward, the film or show will still get people to watch and the network/studios will likely make a profit and uphold the three party system. This situation can also likely explain why so many of the biggest movies out there today are based off of books—there’s usually a large following and room for sequels! (Harry Potter had seven books!!!! Look at the numbers!)
But then there’s Always Sunny. What makes this show different? Cheap to produce also creates less risk if it is a flop. As the article states the producers at FX accepted the potential for reward because the show really didn’t hurt them to produce since the actors, writers, directors and producers all shared only 1M$. So to return to our original question…do economics stifle creativity? I don’t think we are living in the culture industry entirely but I do find the relationship between economics profits and creativity uncanny in that big budget movies are meant to reach a large audience and low budget products are usually a bit different and push the envelope more. Media companies nonetheless want the risk to be outweighed by the reward.

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