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Bedrijfsstrategieën, overheidsbeleid en de Europese filmmarkt tijdens het Interbellum

Bakker, Gerben (2010) Bedrijfsstrategieën, overheidsbeleid en de Europese filmmarkt tijdens het Interbellum. Tijdschrift Voor Mediageschiedenis, 2 . pp. 13-36. ISSN 1387-649X

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Abstract

This paper identifies four basic economic characteristics underlying the evolution of the motion picture industry. First, the importance of endogenous sunk costs led to a quality race in the 1910s that left European companies behind. Second, the fact that marginal revenues equalled marginal profits led to extreme vertical integration. Third, a public-good characteristic of motion pictures – non-diminishability – led to a skewed income distribution among talent, with a few superstars taking most pay, although the Hollywood studios mitigated this with seven-year contracts. Fourth, the project-based nature of film production yielded large intra- and inter-industry agglomeration benefits, leading to geographical concentration. In reaction to this changing economic environment European firms formed alliances – eventually thwarted by the rise of protection and fascism – and focused on highly differentiated films. Policy makers reacted with protectionist legislation that offered European consumers more variety at the expense of quality; provided a countervailing power to the colluding Hollywood studios at the expense of increased national resources used in film production; enabled an improved balance of payment at the expense of trade friction with the u.s.; and created national agglomeration benefits possibly at the expense of other or new creative industries.

Item Type: Article
Official URL: http://www.mediageschiedenis.nl/
Additional Information: © 2010 Boom Lemma uitgevers
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
P Language and Literature > PN Literature (General) > PN1993 Motion Pictures
Journal of Economic Literature Classification System: L - Industrial Organization > L8 - Industry Studies: Services > L82 - Entertainment; Media (Performing Arts, Visual Arts, Broadcasting, Publishing, etc.)
Sets: Departments > Accounting
Departments > Economic History
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 20 Jun 2011 08:26
URL: http://eprints.lse.ac.uk/36850/

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