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THE BUSINESS OF FILM THE OPEN UNIVERSITY AG

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Culture, economy, value and

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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.

We have seen that while film provides a service that can be bought and
sold in the market place it also provides value in terms of cultural
benefits, which may be social or symbolic.

You’ve seen how 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 are the key
holders of power.

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’s five forces
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. We are going to focus on what happens right
at the very beginning of the value chain and meet some of the key
players.

Further study
Visit OpenLearn for more exciting free learning opportunities from the
Open University.

References
BFI (2014) Statistical yearbook 2014 [Online] (Accessed 6 August 2015).
London: BFI, p. 180.

Porter, Michael E. (1980) Competitive Strategy, Free Press, Macmillan,

New York.

Throsby, D., & Throsby, C. D. (2001). Economics and culture. Cambridge

University Press.

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© The Open University (2015)

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END OF WEEK ASSESSMENT

END OF WEEK 1
TEST

SEE ALSO

FILM: CREATIVE OR CULTURAL?

BFI (2014) STATISTICAL YEARBOOK 2014

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