T H E C R E AT I V E I N D U S T R I E S :

MANAGING PRODUCTS AND

PRODUCT PORTFOLIOS

BY
PAVA N W A D H O N K A R
V I S H E S H B H AT I
VIKKY ANAND

WHAT M AKES P R O D UCT S IN CR E ATIVE

IND USTR IE S D IFFE R E NT?
Costly Negatives, Cheap Copies
Hit products are disproportionately profitable: the more copies are sold,
the more the production costs can be divided over those copies
Holistic Products
The result of all aspects somehow magically coming together to form a
product that works.

WHAT M AKES P R O D UCT S IN CR E ATIVE

IND USTR IE S D IFFE R E NT?
Experience Products
It is difficult for consumers to assess their quality before consuming them
Tastes Matter
Creative products tend be largely horizontally differentiated: whichever is
chosen depends more on inherently subjective tastes than objective quality
differences.

WHAT M AKES P R O D UCT S IN CR E ATIVE

IND USTR IE S D IFFE R E NT?
Low Repeat Purchase Rates
People may buy a lot of music in a given period, but they rarely buy the
same album or song twice.
Demand Is Relatively UncertainAnd Fluctuates Strongly
Some executives in the creative industries are fond of saying that
nobody knows anything,

WHAT M AKES P R O D UCT S IN CR E ATIVE

IND USTR IE S D IFFE R E NT?
Success Breeds Success: A Taste For Winners
One of the key factors that may drive this effect is that people prefer
popular productsthey prefer products also chosen by others.

PR OD UCT STR ATE GI ES IN CR EATIVE

IND USTR IE S

PR OD UCT STR ATE GI ES IN CR EATIVE

IND USTR IE S

PR OD UCT STR ATE GI ES IN CR EATIVE

IND USTR IE S
Why Limited or Grassroots Release
Strategy:
lack of funds
2) control over which audiences become early adopters
3) Is it worthy of further investments
1)

PR OD UCT STR ATE GI ES IN CR EATIVE

IND USTR IE S

PR OD UCT STR ATE GI ES IN CR EATIVE

IND USTR IE S
Why Wide or Mainstream Release Strategy:
1) Recover their investment relatively quickly
2) Experience goods, a push strategy often helps to
drive sales.
3) Establishing a product as a hit early on drives later
sales.

P RODUCT P O R TFOL IO STR ATEGIE S IN CR E ATIVE

IND USTR IE S

P RODUCT P O R TFOL IO STR ATEGIE S IN CR E ATIVE

IND USTR IE S

P RODUCT P O R TFOL IO STR ATEGIE S IN CR E ATIVE

IND USTR IE S
Why Do Blockbuster Strategies Persist?
1)
2)
3)
4)

It
It
It
It

guarantees a steady stream of new material

helps retain top creative workers
fosters internal champions
increases external support

CONCLUSION
Overall, the kind of blockbuster strategies employed by
most of todays larger content producers are certainly
not free of risk but, in the long run, they appear to beat
the alternative of more balanced resource allocation
strategies.
The highest-performing companies in the media and
entertainment sector thrive by taking a chance on
certain titles, and turning those choices into successes
by giving them a higher level of development and
marketing support.
And because the marginal cost of reproducing and
distributing media products is relatively low, especially
compared to their up-front production expenses, any

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