Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE ( © Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 08 August 2020

Abstract and Keywords

This chapter examines the evolution of modern entertainment industries. It reviews ways to conceptualize and quantify the subsequent waves of creative destruction and investigates how sunk costs affected the industry’s evolution through its interaction with variety, market integration, product differentiation and price discrimination. Four tendencies shaped the entertainment industries’ evolution: first, endogenous sunk costs often led to a competitive escalation of production expenditures—‘quality races’—which increased industrial concentration. Second, marginal revenues largely equalled marginal profits, which led to extreme vertical integration through ownership or revenue-sharing contracts, an oversupply of variety, and a dual market structure with high-concept blockbuster products and low-budget niche products. Third, entertainment’s toll good characteristics led to business models optimizing exclusion possibilities in the value chain and to substantial income inequality among creative inputs. Finally, the project-based character of entertainment production implied large within- and between-industry agglomeration benefits and often led to geographical concentration. Dynamic product differentiation allowed various old formats to survive the waves of creative destruction, albeit in much smaller incarnations.

Keywords: entertainment industry—-history, sunk costs, industrial concentration, quality races, price discrimination, market integration, dynamic product differentiation, variety, industrialization, agglomeration economies, vertical integration, business models

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.