Management of Cultural Industries - Module I PDF

Intro to management of cultural industries Attending students​ – Group assignments 60%. Two debates (team vs. team)​ – Cases and discussion (paper and interactive) – Final exam 40% short essay (a reflection on a topic/article) Lecture 1-ambiguity of culture “We cannot direct our behaviour or organ...

Intro to management of cultural industries Attending students​ – Group assignments 60%. Two debates (team vs. team)​ – Cases and discussion (paper and interactive) – Final exam 40% short essay (a reflection on a topic/article) Lecture 1-ambiguity of culture “We cannot direct our behaviour or organise our experiences without the guidance provided by systems of significant symbols” Geertz 1973-11 “Culture is a complex system including knowledge, beliefs, art, moral, law, common behaviour and every other capability and habits acquired by individuals as members of a human society. It includes material and spiritual elements, practical tools and symbolic elements” Taylor 1871 There are individual and collective components Some aspects could become cultural under condition Managerial implications a) Slippery floors.Difficulty to embed discourses and actions in a consistent whole b) Subjectivity significant symbols vary for different communities, individuals, over time, across space. Who should we pay attention to? Where should we refrain ourselves? c) Granularity should we look for differences or for commonalities? What is the appropriate unit of analysis? What is important for one may not be for another d) Multiple goals protecting the tradition, vs keeping the status quo, vs trend setting Intro to management of cultural industries Good governance characteristics: ​ – Protection of owners interests; ​ – Accountability; ​ – Transparency; ​ – Ensuring continuity and long term availability of resources for value creation; ​ – Compliance Good governance of culture​ – Consensus management​ – Multiple interests protection​ – Multiplicity of financial sources​ – A complex accountability system​ – Timing (addressing institutional inertia and market/technology speed) Managerial implications Multi stakeholder approach-a variety of interconnected expectations from a variety of players calls for a constant need to reaffirm goals and a lot of effort consensus management Priority definition-culture embeds several artistic languages, the past, the present, preservation and new creation. Cultural organisations are often not only multi stakeholder organisations but also multiple audiences Areas of accountability-companies are increasingly challenged to extend their responsibility. What should cultural organisations be held responsible for? How about transparency? 3. Cultural organisations ​ Culture is about individuals and their sensemaking ​ Culture is about social relations ​ Culture is about meaningful symbols creation and sharing ​ Culture is a process,as well as artefacts and manifestations ​ Culture is about power, about meaning, about exchanges, about markets ​ Culture is about the past,the present and the future Intro to management of cultural industries ​ We are particularly interested in the following commonalities: ​ High symbolic value (creativity in the production; existence of IP) ​ Build imaginaries ​ Define individuals relationships with:​ – Time, Space, Other people Intro to management of cultural industries Managerial implications A problematic relationship with market logic​ A delicate interplay between private and public logic Performance vs spillover effects Lecture 2 Culture vs commerce Culture is pervasive and ambiguous in terms of boundaries, scope (content vs process), nature (material vs immaterial), economic characteristics (semi public vs merit) The problematic and fluid relation between culture and the market The sistine chapel is conveniently located towards the exit of the Vatican museum Framing the problem: – Preserving the atmosphere of a holy place – Allowing access as it is a holy place… but what type of a holy place? – Protecting paintings – Avoiding massification – protecting visitors’ experience – Creating an icon and profiting from it – Covering maintenance costs for Vatican museums – Without Sistine Chapel, Vatican museums would be empty Intro to management of cultural industries What should the museum do? The difficulty of changing strategy ​ Pricing and opening hours ​ Itineraries ​ IP management (VR, AR, merchandising) ​ Communication ​ Research and publications MoMA and Covid-the mission The market value of one’s art increases significantly as they are displayed at MoMA; The problem for institutions: you are performing a public function but you are also part of the market (how to handle collectors) Framing the issue: Yes, educational services No, educational services – are a variable cost – address a key audience segment – are not central to the museum offer – are central to the museum offer – are not profitable enough – are needed to keep the relationship with audiences – Fairness vs temporary employees What type of organisation is a museum? 1.​ A public institution 2.​ A political actor 3.​ An educational institution 4.​ A market force Intro to management of cultural industries The problematic relationship with the market Culture as – Images and meanings that enact social forces. – Values - Beliefs that give orientation to practices. – Identities – Beliefs that shape self perceptions and communities. has a problematic relation with monetary exchange. Culture implies an intimate transformation of the selves and the communities and represent an exception if compared to other goods A cultural product is defined under the condition of its possible «commodification», as to say the possibility of a trade that happens on market premises price does not discriminate between culture and cultural products (cultural products may be free; culture may or may not be accessed through direct or indirect payment) Deliberate willingness to infantilize the audience via pop music (regressive listener behaves like a child) Intro to management of cultural industries Institutional forms to manage culture Public vs private vs collective vs common Public good-difficult to get a profit since its consumption is non-exclusive (example: street lights) and there is no rivalry in consumption Private good-implies rivalry and exclusivity Collective good-a subset of public good (eg a community space) Common goods-contribute to the realisation of a common social good; related to the fundamental rights of individuals, their rooting and identity (eg water accessibility) The nature of goods impacts pricing and destination We tend to think that the nature of good will correspond to its ownership (eg public good owned by a public org) ->However, there are public uses to private goods or the contrary (think of a public park renting out space for a kiosk) Collective goods can be owned either publicly (municipality common space) or privately (lift in a condominium) Common goods raise the issue of governance (who owns / manages / controls?) Some goods can be simultaneously private and public (public TV broadcasting vs commercial) Intro to management of cultural industries Common goods management - Ostrom 1990 Define the user pool the design of durable cooperative institutions that are organised and governed by the resource users, following eight similar design principles: 1. Clearly define boundaries to identify the members of the user pool, as well as the physical boundaries of the common resources. 2. Define appropriation rules specific to the characteristics of the actual resource 3. All affected individuals decide on the appropriation and provision rules. 4. The appropriators themselves or persons accountable to the appropriators are responsible for monitoring compliance with collective decisions. 5. Sanctions should be graduated to reflect the severity, frequency, and context of the violation. 6. Low-cost and readily available conflict-resolution mechanisms must exist to mediate conflicts among appropriators and between appropriators and officials. 7. Users must have recognition of their own rights to organise institutions. 8. Sets of rules established within a hierarchy of appropriator institutions, must be established for common resources that are within larger resource systems and political jurisdictions. A more nuanced situation: Who owns culture In order for heritage to have a meaning over time you have to constantly do something with it Intro to management of cultural industries Value and meaning of an object can change over time; Preservation alone might not be enough to keep the memory alive Where is the source of value and for whom Casa del fascio in bolzano Hannah Arendt-a Jewish German philosopher studying totalitarian regime Edward Colston in Bristol ERT and the Greek crisis case study Is governance of ERT effective? – Overdependence on government judgement – Difficulty to build loyalty form audience – Aggressive competitive environment – A fragile organization from an economic and from the reputation point of view – An issue of audience education on a very complex economic situation – An issue of representation of the “Voice of the Master” – An issue of pluralism (different parties are given the possibility to appoint board members) – An issue of pax socialis To be accountable for: to keep in mind public interest The career of Venus case study We know that value in the arts takes several forms (economic and non economic) We have addressed the relationship between artifacts and space (where does heritage belong to?) We have identified different stakeholders in culture governance We have addressed agency between owners and governance and between board and management What is the trial all about? A legal battle over a principle An issue of cultural diplomacy A problem of reputation building and destruction Excluding antiques from the market An issue about identity? The dimensions of value Intro to management of cultural industries For the final: your ability to frame issues is very important! 1 hour exam essay question written on the spot The role of academia in defining a city - guest speaker BOOK SUMMARY Chapter 1: culture is the expression of an individual and collective rootedness in a society, the recognition that everything has a past, and that much of what exists is the continuation of what existed previously. = The educational value of culture -> A way of thinking, of believing, of being = culture is a part of identity that allows us to recognize each other’s similarities and differences -> A mechanism that regulates the behavior of both individuals and groups, a set of unwritten yet observable rules that define the belonging to a social group. Eg custom of applauding, standing up etc = the regulatory and political value of culture The distinguishing features of individuals’ lifestyles, shaping their consumption, behavior, and stylistic self-awareness. (eg young adults living in an up-and-coming urban neighborhoods) it feeds on the past to interpret the present,incorporating that past or rejecting it; it is expressed in the market and outside the market; it is visible in products, services, and rules, but is also intimate, implicit and intuited. we have to be aware that it may be extremely divisive and the expression of power and prevarication. Culture is used by dictatorships to enforce propaganda and as a symbol of power. Culture is considered by many as elitist and self exclusive. And although culture is often celebrated as a tool to create bridges among communities, it is often manipulated to exclude or integrate others. In any organization, governance is a set of structures and mechanisms that deal with its long term viability. As we know, specifically, governance is “in-between” ownership, control, and management and is part of the institutional framework of any organization. Governance structures take care of: ​ Ensuring that owners interests are protected, and that consensus is reached among several and often conflicting expectations; ​ When “ownership” is collective by definition, mediating among a variety of stakeholders; ​ Ensuring that resources are available to the organization to guarantee long term viability and autonomy of decision; ​ Mobilizing resources to guarantee that the organization creates value over time; Intro to management of cultural industries ​ And, of course, complying with the law, paying particular attention to the transparency of action. Cultural organizations: ​ Material heritage (e.g., monuments, museums, collections, archives) and immaterial heritage (e.g., dance, theatre, classical music): all artifacts and cultural expressions from the past that are being preserved for future generations. ​ Visual arts: production, display, and commerce of paintings, internet art, sculptures, illustrations, photography, and videos. ​ Performing arts: production and permanent or temporary distribution of dance, opera, recitals, prose, solos, and other live performances by actors like ensembles, choirs, and orchestras. The temporality of the exhibition and the live interplay with an audience are specific to these artistic domains. ​ Cultural industries. They deal with the production of an intellectual property outcome in the form of audio, video, text-based products or services that can be sold, exchanged, or donated. ​ Welfare. Several organizations leverage culture to address social issues. In the case of urban regeneration programs, or programs targeting marginalized groups or chronically ill people, cultural activity is effective leverage to reach social goals. Others, such as Fifty Shades of Grey or songs by one-hit-wonder bands, can be classified more accurately as leisure products, or are more similar to mass-consumer goods rather than cultural products. However, from a strictly economic perspective, the companies that manage their production and distribution are often the same. Street art has originated as an artistic expression of protest is now part of the realm of contemporary art. Certain products have come to be identified with certain social groups and lifestyles. The so-called creative industries (i.e., fashion, design, architecture) are definitely symbolic in nature and might be related to specific know-how or aesthetics, as it is the case of crafts. Culture is not a sphere separate from other dimensions of social life (e.g. the political and the economic), but also is a component of all social actions, including the economic and political ones. SDG - sustainable development goals The goals addressed by different cultural organizations through their ongoing activities or as part of their mission include: Intro to management of cultural industries Goal 1: fight poverty, with specific attention to educational and cultural poverty. The two are strongly related and are drivers of poverty. Goal 4: Provide high-quality, fair, and inclusive education and learning opportunities Target 4.7: educate students to promote sustainable development, sustainable lifestyles, human rights, equal opportunities, diversity, and global citizenship. Target 5.b: enhance the use of enabling technologies, in particular ICT, to promote women’s empowerment. Target 9.c: significantly increase access to ICT and strive to provide universal and affordable access to the internet. Target 16.10: ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements. Museum - Among cultural organizations, museums are particularly articulated in terms of their goals, span of activities (e.g., consider the difference between natural history museums and science museums), and institutional forms. Specifically, concerning institutional forms, some museums are expressions of the State, some preserve the history and the traditions of cities, some are private, some belong to the church, and some belong to companies. The core set of business decisions for museums are: ​ Preserving/increasing a collection of documents/artifacts/traditions; ​ Making it possible to visit it; ​ Creating knowledge around it; ​ Triggering learning by different audiences (specialized, non-specialized, local, national, international audiences); ​ Increasing the reputation and visibility of the organization; ​ Multiplying the possibilities to interact with other cultural forms of expression, in particular with digitalization and contemporary media. Cost and investment bearing decisions need to be leveled with revenues. Sometimes non-commercial goals are dominant. Interest in culture has increased for a variety of reasons: ​ Growing attention to conservation and an international effort in protecting heritage worldwide as a form of identity ​ An understanding of the problematic relationship between culture and globalization. On the one hand, culture stresses identity, uniqueness, and specificity. On the other hand, If globalization means greater integration and/or interconnection, would this overwhelm the world’s cultural diversity? ​ Does globalization encourage cultural homogenization, polarization, or hybridization? ​ An understanding of culture as a possibility to promote diversity ​ The blending of subcultures in mainstream consumer products Intro to management of cultural industries ​ The attention at international, national, and local policy levels to culture as an asset for territorial marketing, tourists’ attraction, and economic development The context for cultural organizations is increasingly challenging: ​ Traditional cultural industries and legacy media have been shrinking and reconfiguring, while live and digital offering has grown and articulated; ​ Cultural organizations, namely museums, have increased in number; ​ While cultural supply, in general, has increased significantly, growth in demand has not been homogeneous; ​ Climate change puts heritage protection at risk; ​ Increasing social inequalities and mounting attention on pluralism question the role of cultural organizations; ​ There has been a drop in public resources allocated to culture and not significant growth in private funds (e.g., donations and sponsorships). The decline in public resources has been a consequence of both the 2008 crisis and the political sentiment of “déeattisation”; ​ From a financial point of view, while the available resources have decreased, the variety of forms of incentives has increased, although often project- and program-based. That makes it increasingly tricky for cultural organizations to cover fixed costs; Cultural institutions (think of national museums, opera houses, libraries) are the archetypical institutional structure consistent with this vision. The ownership structure is essentially public, as it is the funding, unless patrons are available; the main purpose is educational. From an economic point of view, culture is a merit good that justifies public support. One way to use culture as a means to pursue political and economic goals is to commercialize culture by reducing it into exchangeable cultural commodities and turning people into passive consumers of cultural goods. Absent patrons as in the past, and with public funding to culture being progressively reduced, the creation of markets for cultural products makes it possible for artists to become part of the creative class, reach status, and be remunerated for their work. Remuneration is created through the creation of artificial scarcity(e.g., copyright, intellectual property protection). Moreover, the tendency of companies in several sectors to enhance their offering with an experiential component has contributed to increasing interest around cultural industries. The boundaries between practice, participation, and production are very blurred, making the legitimation of those working in cultural settings very difficult market and non-market logic interplay = culture and commerce balance Intro to management of cultural industries Cultural organizations are fragile; fragility has to do with the constant and objective possibility of breaking up, being destroyed, canceled, forgotten. There are fundamentally four major streams of financing: ​ Grants/contributions ​ Income from endowment ​ Self-financing (e.g., ticketing, commercial sales, sponsorships). ​ Debt institutionalizing fragility requires a coexistence between “authenticity and economic viability”; between dominant artistic values and un-ignorable commercial dictates. Revenue breakdown in cult orgs Intro to management of cultural industries Making Heritage Contemporary Tradition can be defined as the transmission of the past through a constellation of symbols that are received, interpreted, and modified over time. One of the tasks of cultural organizations is to “manage tradition”, i.e. to participate to the collective process of sense-making in urban settings Digital technologies are enabling factors to mobilize and engage audiences and to increase accessibility to their patrimony, but never as substitutes to personal interactions, to live events, to individual experiences with art or culture Value creation within this framework: ​ protection and preservation of intrinsically precious artifacts, documents, and memories from previous generations; ​ research and knowledge generation; ​ new cultural and artistic production around cultural products; ​ communication, diffusion, and distribution to different audiences leveraging on emerging channels, technologies, forms of expression; ​ strengthening the reputation of the organization. Italy considers as part of heritage in principle any monument over 50 years of age and has article 9 of the constitution expressing the responsibility of the Republic to protect heritage. Objects and places are not, in themselves, what is important about cultural heritage: they are important because of the meanings and uses that people attach to them and the values they represent Authenticity. Authenticity can be defined as the quality of being authentic, truthful, or genuine. In heritage conservation, authenticity has been associated with notions of the ‘original’ and the ‘genuine’. The overwhelming emphasis until very recently has been on the integrity or ‘true’ nature of objects, defined in relation to their origins, fabric, and the intentions of their makers. A work of art is inseparable from its authenticity Distinction. The social position of individuals is determined by the combination of economic capital (driven by income and profession), cultural capital (deriving from education and family) and social capital (driven by interpersonal relations). Thus, “consumption of heritage” is an habitus distinguishing higher social classes; consequently, cultural organizations involved with the management of heritage are perpetuating social distinction. More recent theories state both an increased breadth of cultural tastes and participation and a willingness to transgress previously entrenched boundaries between hierarchically ranked cultural items or genres. Intro to management of cultural industries Competencies. Adapting new competences to the heritage sector is a long process, requiring a research approach. In this respect, there are several areas of research worth mentioning: 1.​ there has been a tendency to install contemporary pieces in heritage settings, as a thought-provoking experience and a curatorial challenge 2.​ digital technologies allow different interactions with artifacts and the possibility to socialize art. Several experiments are noteworthy: starting from digital collections of images and documents, some organizations develop contests for contemporary designers, others foster crowdsourced projects. 3.​ How to foster interdisciplinary research-oriented collaboration and transfer it into new forms of cultural offerings. New media art considers digital technologies as forms of expression, opening up collaborations with apparently very distant areas of expertise. Eg X-ray mummies at the Museo Egizio in Torino, making visible the internal structure and the jewelry of mummies. Audience behavior. Loyal audiences may question the brand's ongoing status and superiority if the innovation effort is too much detached from the organization’s historical position and generates resistance to change.it is quite common for cultural organizations and artists to “mature with their audiences” (successful digitalization of New York Times in 2020 making more revenues+subscribers from dig sources than print) Challenge of constantly finding new ways to build relationships with audiences while remaining authentic and consistent with their reputation. Cultural markets are supply-driven cultural worlds are characterized by a specific structure, functioning as a judgment device, that it is selective and collective in nature: peers and gatekeepers (publishers, critics, curators, prizes, and so on) select and negotiate which new artists and outcomes are considered innovative or representative of contemporaneity and worth signalling. The output of the system is a market-oriented legitimation process, reproducing the dynamics of a “star system”. Once the new artist / outcome is established and legitimized, the reputation effect will persist. New artists seek visibility outside the mainstream channels and are typically legitimized once recognized and celebrated by mainstream ecosystems of communication/distribution/gatekeeping Who owns culture? Many cities and museums exhibit art that does not belong to their local culture (British Museum) Intro to management of cultural industries 1970 - UNESCO crafted the Convention prohibiting the illicit import, export, and transfer of cultural property 1972 - UNESCO crafted the Convention on the protection of the world cultural and natural heritage. According to the convention, specific landmarks are defined World Heritage Site Therefore, culture is simultaneously time and place-specific and protected and valued as such, and something that belongs to everyone, and that should be taken care of as a public good. Value creation by cult org - determined between the interplay of supply and demand Cultural product nuances: 1.​ Some of the products exchanged tend to be unique therefore making it hard to determine the price which has a limited signaling of the quality. 2.​ Artistic success and commercial success are unrelated making it hard to determine the quality 3.​ Markets for specific content eg music videos is not particularly effective due to copyright infringement and digital duplication 4.​ Cult orgs do not benefit from the positive externalities they create (restaurant owner will benefit from the location next to a monument but not vice versa) Reputation building involves creating and valorizing layers of meaning around places and artifacts: ​ research and publication activities, ​ through the exhibition and touring of own collections, ​ through alliances with prestigious partners and venues, ​ through a careful audience development that leads to audience engagement, with specific activities put in place for each category of stakeholders Branding aims at increasing visibility, sometimes at the expense of meanings associated with cultural destinations, organizations, and artifacts. Reputation is associated with the web of players with whom the organization builds relationships. Value for whom? Cult orgs address a big variety of stakeholders: individuals and communities ​ Identity building: bonding with places and communities ​ Political value: could be propaganda or cultural diplomacy ​ Historical and cultural value: enriching our knowledge on artifacts, periods of time, techniques etc ​ Aesthetic value: sense of beauty, harmony and proportion ​ Educational value for inclusion: creating common knowledge through generations (using same textbooks) Intro to management of cultural industries ​ Competence development: UNESCO recognition of world sites increasingly acknowledges the specificity of man-made landscapes Digital tech enhances the possibilities of creating experiences based around art and culture and destinations. Stakeholders have certain conflicting expectations from the art leading to the development of meaningful strategies for cult orgs. It is difficult to unify a multiplicity of meanings and expectations. Value creation around the Aphrodite of Morgantina The trial determines that the statue belongs to Italy however the know-how around it has been fueled by Getty. It has been kept alive through research, publications, visits etc as collectively meaningful Different facets of value: ​ Sculpted by an outstanding artisan, beautiful and slender statue (stolen and sent to Switzerland) ​ Reputation has been built by the creation of legal status which occurs as a result of a series of sales ​ Getty has a vested interest in increasing the value of the piece ​ Until the trial, Aphrodite has hardly been heard of outside the community of scholars and visitors ​ Later, the statue becomes a symbol of the identity value of Italian heritage Areas of ambiguity (governance structures): 1.​ Who are we addressing? Is culture for everyone? Emphasising the association between beauty and culture or identity and culture we may consider it so ambiguous, pervasive and impalpable to be worthless and non-measurable Intro to management of cultural industries 2.​ The attractiveness of monuments and destinations does not translate into an economic benefit. Privatisation of cult orgs also does not translate into higher chance of value creation 3.​ Culture is time and space specific. Who owns Mona Lisa? If it belongs to all of us, does the state take care of it? Governance structures are responsible for finding a balance among a variety of value drivers, while granting adequate resources to guarantee viability. The balance between economic and non-economic goals is delicate to reach, as well as the efforts to build brands and reputation. Too much emphasis on beauty and aesthetic makes art frivolous and over-subjective. If there is too much emphasis on the political value dimension, the org risks being too dependent on public funding. A business model canvas for cult orgs -> identifying the key elements of a business strategy to its economic terms outcomes The value proposition represents what the cult org offers to the audiences ie mix of services, material and immaterial elements of the experience provided. It consists of core elements (books, spaces) and specialized services, ancillary services (cafeteria, parking, lockers) and the pricing scheme Channels include physical and digital communication and ticketing tools a museum could be defined as an icon – should the emphasis be put on its architecture as an attractor – a place with a specific history – should there be part of the collection and the monument being associated to a specific historical moment etc Stakeholders: 1.​ Audiences 2.​ Territory 3.​ Governance As many value propositions as audiences targeted Audiences need to be transformed into loyal users and advocates Due to cost, scale and competence constraints, resource allocation will orient the composition of the value proposition and make the cult org more attractive to specific audiences. Territory involves public agencies, enterprises, public opinion, media, local schools (“friends of”) Founders, donors, public agencies are part of governance structures Pressure to widen the variety of revenue streams could lead to a dilution of the identity of the organization Intro to management of cultural industries Governance structures In any organization, the institutional framework consists of structures and mechanisms regulating: ​ ownership (whoever has rights and responsibilities to set up, structurally modify and terminate specific organizations); ​ governance (structure – such as the board of directors, the board of trustees – and mechanisms to ensure continuity and sustainability of the organization and adequate representation and protection of owners’ vested interests); ​ control (structures and mechanisms to ensure that decisions are made in the best interest of the firm and compliance with regulations); ​ their relationship and the impact on management. The interplay between ownership and governance Article 9 Roman law - public monuments to be oriented to “publica utilitas” (common use), “decor urbis” (decoration for the city), “servitus publica” (serving the collectivity), “legatum ad patriam” (heritage for the homeland), “bonum commune” (common good). Another area of ambiguity is the relation between owners and boards on one hand and boards and management on the other. The key issue around designing governance structures is to assure an ROI to suppliers of finance (max shareholders value). There is a separation between who runs the company and who provides finance Principals need to arrange safeguarding mechanisms (contracts, controls etc) to contrast the power imbalance: different types of shares, independent directors, stock options are used to minimize agency costs. Both directors and managers may put their own interest first: ​ Prefer risky growth to profitability (power, visibility, benefits, networking) ​ Put in place risk-averse behavior, minimize personal commitment ​ Enhance personal wealth through improper practices: overcompensation, conflicts of interest, robberies ​ Building up barriers against takeovers to avoid the subsequent risk of being fired ​ Excessive focus on short term results and low commitment to long-term performance ​ Transfer of benefits to other people: nepotism ​ Insider trading The typical tools used to fix the imbalances are contractual/regulatory Organisations are political players whose strategic activity is based on the interplay between resources, industry structure and the specific social setting of which they are part. Intro to management of cultural industries According to that view, the responsibility of the org goes beyond the reward of shareholders and employees but includes society in general (from an environmental and social point). The most important CSR justifications are: ➔​ Moral obligations (company to be a good citizen) ➔​ Sustainability (environment and community stewardship) ➔​ License to operate (consensus from shareholders) ➔​ Reputation (justification towards stakeholders) Pressures on governance: shareholders vs stakeholders view The public private dichotomy and the role of mass media - Habermas Theory Different meanings attracted to the public/private distinction: ​ Society vs individual (collective vs personal) ​ Visibility vs concealment (what is public is transparent). We use the terms “public power”, “public interest” ​ Openness vs closure to undermine the power of authoritarian states (what is public is freely accessible). A public institution though may be extremely opaque when it is heavily bureaucratic ​ Several vs limited stakeholders (private orgs act in the interest of their members). Philanthropy and volunteering are examples of private orgs performing a public function The two spheres are distinct and also mutually dependent and inclusive The discursive nature of the bourgeois public sphere manifests itself in 3 forms of critique: 1.​ The tension between universal civic interests and particular class 2.​ The tension between communicative and instrumental reason. The public os created by socialized subjects who relate to one another but is also colonized by private objects in a profitability-driven market Intro to management of cultural industries 3.​ The tension between empowering and disempowering potential. The state and the market are two forces shaping the transformation of the public sphere Mass media and their progressive standardization are highly responsible for the systematic regulation of the public sphere. Core component of the culture industry = tendency towards constant commodification. Habermas theory has been heavily criticised: it focuses exclusively on the public industry of the ruling class, tends to overestimate the potential of liberal public discourse, it advocates a universalistic conception of public interest, neglecting the multiplicity of competing public spheres The digital public sphere (blogs, websites, media) is open and free participation of everyone interested. It is conceptualized to be a substitute of the “old” public sphere. The optimists emphasize such facets: 1.​ The open and easy access makes it easier for much broader audience to stay informed 2.​ Online media facilitates the peoples voices being heard in society without the filter of gatekeepers. It also reduces the possibility of authoritarian political control, empowering the marginalized 3.​ Collaborative social media enables a novel, decentralized communication and content However, several potential problems include: 1.​ The degree of participation is limited, as digital divides strengthen inequalities. Exclusion from the public debate still exists 2.​ Pluralism is not encouraged as the algorithm strengthens path dependent inf choices with filter bubbles and unconscious bias. Users can decide who to follow and what content to receive and might not encounter opposing views Public service model - a set of relations that are political while trying to keep its autonomy from the political state control. It has to cover its financial needs with constraints that are higher than those of their commercial competitors, despite the huge entry barriers and reputation advantage. Another tension is between the political and market logic. The individual is a producer and a consumer exercising their rights through purchasing power. The tension is apparent: the media market is against state censorship, however, private control of the media is an obstacle to free political communication. From an economic point of view, the growth in information outlets and the variety of business models make it increasingly expensive and challenging for public broadcasters to develop a sustainable strategy, considering resource constraints. Intro to management of cultural industries The role of governance is to micromanage the tensions facing public broadcasters. To ask an org to be simultaneously a commercial organization and a political institution requires a series of laws and rules to separate political from economic control, while putting in place a series of requests for transparency, limiting somewhat the overly commercial activity. We assess the governance quality following this criteria: ​ Accountability - responsibility towards the providers of funds ​ Inclusion - being proactive in assessing risks and sustainability. Requirement to represent communities, advocate on social issues and participate in reconciliation efforts. ​ Creative innovation - to be contemporary in terms of the ability to interpret and give voice to major societal issues ​ Transparency - put in place procedures shedding light on issues such as the provenance of artifacts, sources of funding and their use, compensation of top employees. This protects and enhances reputation ​ Independence - often supported either by public funding or wealthy families At the same time, we cannot address this tension through the interplay of governance and control only, but through a lively relation among social groups, and with the involvement of the audience. This is a very delicate issue, to the extent that globalization pushes towards a separation between people, resources and places Cities as a unit of strategic analysis: 55% of the world population live in urban areas today. Cities are becoming more attractive and important for wealth creation, inequalities within cities increase. Policymakers are facing issues of quality of life and safety as well as developing social capital. -> Gated communities, segregation, ethnic concentration, slums, ghettoes are increasingly relevant phenomena associated with city life, while gentrification and its effects are often on the agenda at the city and neighborhood level in a growing number of cities. Cities are competing at attracting capital, talent, tourism through hosting Olympic games and building uni campuses. Conflicting interests between communities determine complex negotiations and delicate balance between political ,social and economic interests. Policies play a key role in shaping the socio-economic character of a city: sets priorities, promotes specific behavior, frames market and non-market settings. Resource allocation choices determine different patterns of city area development Intro to management of cultural industries In the 80s, the label “creative city” was introduced to stress the relevance of cultural and creative sectors in supporting socio-economic development at the city level. The definition encompasses several characteristics: ​ concentration of firms operating in the cultural and creative sectors. For people operating in these industries, creative cities offer advantages related to a concentration of individual and collective knowledge and a receptive market. Residents enjoy a lively cultural environment, policymakers benefit from the relative density and stability of labor markets ​ Rich hard and soft infrastructures; allows the development of knowledge society ​ The quality of amenities and third spaces (neither home nor work) that allow the development of social capital ​ The ability to attract the creative class, an international cluster of wealthy and curious people Often, the strategic initiative is taken at the local level in a public-private partnership logic. Categories of policies: 1.​ Policies aiming at stimulating aggregated demand - aimed at building an attractive territory at a local, national, or international level, through the valorization of cultural assets. These include material and immaterial cultural heritage, the creation of flagship projects (events, festivals), and buildings (cultural centers, foundations, museums) 2.​ Policies oriented towards artistic and cultural supply - stimulating the creation of productive clusters and clusters of competences (cultural districts, networks of companies). Unique skills are developed, jobs are created and territories acquire unique textures 3.​ Policies aimed at building social and cult capital inside communities - socio-cultural inclusion. Wealth at the territorial level is created by progressively reducing marginalization and poverty through the development of social ties and strengthening the quality of urban living via cultural products and activities eg education and community building projects Architecture plays a key role. Iconic buildings are created in the areas that lack a landmark around to create storytelling. Such buildings function also as symbols of the process of regeneration itself. Indeed, they are oftentimes referred to as iconic buildings and / or landmarks, because they act internally (i.e. for citizens) as catalyzers for identification and imaginaries construction and externally as tools of city branding. Yet, the economic impact is difficult to quantify = calls into question the opportunity costs of such investments + significant maintenance costs. When dealing with iconic structures, we are most of the time referring to buildings destined for cultural functions and museums. They have undergone major expansions over the last 30 years and have mostly been designed by “archistars”. The very idea of functional utilization of museums for other goals than the cultural Intro to management of cultural industries ones (be it social fabric reconstruction, internal image building, or external branding) is something to reflect upon, especially given the contemporary economic context and the progressively shrinking available resources. Increasingly, culture-led policies at city level address cultural diversity, inclusion, and participation, reduce the top-down approach of the central government which determines a “recipient attitude”, and rather try to involve civil society, focusing on specific stakeholders (university students, young adults), and trying to use the available specific cultural elements that characterize a country/a community to mobilize society and work on the community weaknesses. The characteristics of thai shift are: 1.​ Growing attention to the process dimension 2.​ Stakeholder mobilization and consensus management 3.​ Closer attention to the relationship identity - stakeholder engagement - resources The notion of participation corresponds to different features from providing info to being heard to having decision power or to co-production and co-creation. “In contemporary cultural policies, distinct overlapping paradigms thus coexist cultural excellence, cultural democratization, cultural democracy, and creative economy.” ->the paradigm of excellence - independent criterion autonomous from political pressure that respects freedom of expression (support for non-commercial artists -> the paradigm of cult democratization - facilitate access to the broader number of people to high-quality goods and services (citizens as active subjects and stakeholders) The cultural economy paradigm emerged in the 1970s as an academic field, but slowly gained visibility during the 1980s It focuses on the direct economic impact and externalities of the cultural sector, traditionally considered more as a domain of expenditure and also an attempt to justify governmental support for cultural practices with low attendance. The paradigm was heavily reinforced at the end of the 1990s and the beginning of the 21st Century, with the rise of the creative economy and the worldwide development of the Creative Cities strategy A taxonomy of cultural policies Different mechanisms of proactive participation between programmers, creators and audiences are organized based on the four policies identified and as a consequence of a pan European research project on performing arts organizations. Intro to management of cultural industries Cultural City - some cities pay particular attention to the cultural sector ➔​ cities usually self-define as creative or cultural, applying for particular titles (as in the case of UNESCO cities) or as a way to resist globalization. ➔​ In other cases, the label is associated with territorial marketing efforts and city branding by policymakers and some private actors. Cultural infrastructure Geography and logistics matter. Frequently, it is the quality of the infrastructure that determines the quality and equality of social life, as well as the possibility to extract economic value and develop a competitive advantage. Cultural infrastructure makes the city simultaneously attractive to residents, travelers, whoever is curious about it. The cultural infrastructure consists of the places and actors involved in cultural and creative activities (production, distribution). Cities are increasingly paying attention to cultural policies at the local level. Cultural infrastructure consists of: ​ Private and public cultural institutions (e.g., libraries, museums, archives, theatres, institutional exhibition spaces), normally unevenly distributed throughout cities. Public museums are typically in the city center whereas private ones are located in ex-factories ​ Companies in cultural industries (e.g., publishers, music and audiovisual producers, radios,videogame developers). ​ The physical network of commercial venues in charge of distributing cultural products (e.g.,bookshops, comic shops, vinyl record stores)They include commercial activities (e.g., clubs), socio-cultural places (e.g.,cultural Intro to management of cultural industries associations, aggregation spaces), and profit and not-for-profit spaces (e.g., project spaces, galleries, exhibition spaces). They often feature a mix of genres covered and a variety of government forms ​ The educational system includes all types of schools, universities, and academia that “teach the arts” ​ Places of worship. Increasingly varied ethnic communities require an increasingly diverse network of such This perspective on cultural life entails two dimensions: passive participation, referring to receptive attendance, and active participation, involving engagement in culture as an activity. Temporary initiatives include festivals, outdoor performances and programs organized by theatres, museums etc. Some are iterative events (e.g., festivals ( costly and fragile)), others are pulsar (e.g., Olympics). Some are top-down and formally started by public agencies (e.g., capital of culture, Olympics); others are bottom-up, driven by commercial purposes (e.g., street markets) or by associations or not-for-profit organizations (e.g., religious events). event organizers thrive to become effective and efficient while pursuing their mission and ensuring necessary resources. As participatory initiatives, they need to mediate among several stakeholders and therefore need to be very adaptive. The tension between increased formalization around a core mission and the adaptation to urban needs is at the core of their viability. The possibility that a vibrant cultural supply determines cultural livelihood depends on several elements: ​ Geographical distribution and cultural biodiversity. In Milan there are 88 neighborhoods with a different level of residence density and cultural offering ​ Collaboration among “culture suppliers.” Today, “too much” cultural democracy challenges the Association’s sustainability, its ability to please loyal audiences, and, ultimately, the political ambition to create a polycentric city. Therefore, the term participation needs to be operationalized and routinized while subject to change due to the accomplishment of goals and the changing political landscape and environment. Part of the complexity of this effort depends on the specificity of each stakeholder involved in the participatory process. So, what is a cultural city? The term “genius loci” refers to the specificity and uniqueness of a place, both in terms of structural components and the nature of the Intro to management of cultural industries relationships it fosters. Progressively, the term has been used to define the result of the interplay between nature and culture. The challenge is to understand how ideas are connected to the places where they are produced, to be a sustainable part of a collective process of value generation and cultural innovation. A high concentration of cultural preservation, production, and consumption activities is typical of metropolitan cities where the number of people employed in the cultural economy is between 25% and 40% of the total. -> the cultural economy represents a small percentage of wealth produced in any city cultural labor markets are lively and international but not particularly rich or stable. Therefore, cultural policies at the local level must also be economic policies; cultural productions must be able to have national and international markets, just as the city must be able to be a stage for international productions; A delicate equilibrium: visibility is a challenge even for research-related organizations, as audiences are exposed to increasingly spectacular works of art, media products, buildings. Events, festivals, and happenings multiply, putting pressure on the cost structure of cultural organizations Cultural orgs usually address 4 groups of stakeholders: 1.​ institutional partners where its relationship is political - legitimization and social acceptance is the positive outcome of such a relationship. the successful relationship with this market relates to the possibility to keep grants and other forms of support at a sufficient level to cover fixed costs 2.​ the research community and peer organizations. Credibility and reputation building absorbs a good deal of energy and costs. The payoff is the access to increasingly high-quality relationships and potentially broadening the geographical scope of grant seeking and access to resources. 3.​ The third segment is the audience. Audience-driven organizations are asked to be sensitive to their different needs, attract several visitors, educate, engage, provoke. The size of the markets reached and the number of visitors/users from different segments is indicators of the quality of the artistic activity and the ability of the cultural organization to speak, to be heard, and to be considered meaningful. 4.​ Donors, private, not for profit or even public actors at local, national and international level (foundations, corporations, trusts, families or even individuals). This one is challenged by competition, economic crisis and the number of iconic buildings. This market is the most volatile as individual choices of donors are affected by opportunism, economic cycles, changes in corporate social responsibility strategies, and practices. This market is heavily influenced by reputation and visibility. Intro to management of cultural industries The relationship between the cultural organization and its stakeholders has to be dynamic, to grant long-term sustainability and consensus. In the arts the new is always connected to the old and does not replace it, as the past, present and future are intertwined. Often cultural organizations develop a core audience around their cultural project; unless they keep their transformative energy alive, they risk to “age” with their core community, without being able to be meaningful to new target groups. Institutionalization is often the solution put in place by cultural organizations to overcome their intrinsic fragility; the term refers to the adoption of formal mechanisms to strengthen the structure of the organization and to introduce formalized procedures (become more managerial). often ways to grant to the organization the possibility to have access to some public resources and a significant increase in its size and volume of activity. The book highlights the importance of cult orgs being at the forefront of cult and polit debates. Loss of public, aging audiences, reduction in funding, dependence on a very limited variety of revenue sources, reduced volume of activity are all signs not only of a progressive difficulty to reach sustainability but also of cultural marginalization. Culture and community are, however, intertwined also in the sense that the cultural heritage preserved in a certain community influences the ability of that community to also produce new culture (and not only preserve existing cultural artifacts). to secure increasingly limited resources while facing growing competition with peers, organizations spend a growing amount of time to apply to grants, whose outcome is increasingly uncertain. Similarly, if the organization is favoring the peers and research institutions, it runs the risk to be forgotten by public opinion and unable to sustain adequate levels of scientific production or knowledge diffusion. the established organizations are pressured to find new sources of financing and to become more agile. Relatively few institutions have made the effort to seek out their communities and develop a strategy of civic engagement. Similarly, excessive use of spaces to maximize profitability bears the risk of image dilution and is nevertheless not profitable enough compared with professional services. Cult orgs share the need of any other org to be well managed following the same 4 challenges: ​ to satisfy at best the needs whose satisfaction is their mission; ​ to mobilize the resources they need to perform their activity; ​ to reach economic and financial equilibrium; ​ to incorporate these three aspects into a coherent whole. Intro to management of cultural industries Assets are a first key category of resources that cultural organizations need to mobilize to be able to reach sustainability; it is imperative to make sure that resources, spaces, and activities rented and offered are mutually reinforcing the organization’s identity. The challenge here is to transform necessary and often non-squeezable costs of maintenance of structures and preservation or digitalization of collections into drivers for promotion, engagement, and education. The second category is human resources. Cuts in funding have pushed cult orgs to use volunteers or temporary workers. Front end personnel needs to become the forefront of cultural mediation, and in the back end, collaborators need to act in a managerial way to be able to respond with efficiency and effectiveness to a variety of requests (focus on investment in competence creation and enhancement). The third category refers to resources and is immaterial - Knowledge, relationships, practices to facilitate engagement are critical ingredients to build shared meaning and immaterial value. These immaterial resources are needed to create and manage positive externalities and to develop a sense of civic engagement. -> The possibility to use the income statement as a sort of compass to verify the sustainability of a cultural mediation effort is still to be explored. Several organizations have digitized parts of their collections, to improve accessibility and visibility. Yet, a lot is to be done to generate a collective return (in terms of cultural, artistic, and economic opportunities). In this perspective costs and benefits of digitalization should be considered from a broader perspective; conservation and preservation activities need to have a valorization plan in mind, to become sustainable. If culture is simultaneously individual and social, content and process, then governance of cult orgs need to be solid enough to “protect” the organization and flexible enough to mingle with ever-changing external conditions. 1.​ Cultural activities may occur outside the market, in the sense that they are *not* organized as economic exchanges of goods or services, or may explicitly negate the possibility to be transformed into exchanges of goods and services while involving economic transactions 2.​ An often *misleading* distinction between public institutions and private organizations providing a public cultural or artistic (or educational, or social) function. Or, rather, selling cultural products in a highly imperfect market 3.​ Increasingly, cultural organizations are described as service organizations. Yet are they operating in the market and therefore provide cultural services in exchange for money, or rather are they at the service of their community 4.​ The performance of cultural organizations is inevitably assessed in terms of impact and not just in terms of direct results. Yet, the way this impact is Intro to management of cultural industries measured is often reductionist and confined to the calculation of economic results. -> novelty is a key element and reason for being for cultural organizations, their entrepreneurial feature is the constant search for creative destruction. Three characters can be highlighted for cultural organizations as hybrid and entrepreneurial: 1.​ A strong vision rooted in culture. In cultural entrepreneurship, innovations are designed to explicitly produce signs meaningful for the collectivity. The idea is linked to an ideological ambition (being it cultural, social, or political), justifying the community involvement and the imperative to act. The entrepreneur believes in the possibility to initiate, guide, or contribute to a change in society. 2.​ The cultural and ideological project drives the development of the business idea and acts as a bonding element. Despite roles well defined, the cultural project is the result of a co-creation process between all people involved. 3.​ Complex relationship between cultural vision, relationship with stakeholders, narrative, and business idea explains why cultural entrepreneurship projects are characterized by a relatively long incubation period and early mobilization and involvement of the targeted social groups they address. 4.​ Entrepreneurship is based on discontinuity, change, opportunity seeking. Entrepreneurial ventures are intrinsically fragile and part of their success is the ability to neutralize liability of newness, to consolidate an organization. Cultural entrepreneurship makes fragility a distinctive trait: a.​ acceptance of a constant state of crisis / a continuous questioning; b.​ complete involvement in the present and a process orientation; c.​ resistance towards market forces on the one hand and to an excessive political and social engagement on the other. 5.​ The intrinsic fragility pushes the org to be in a deliberate state of liminality between opposite forces leading on the one hand to stabilization, institutionalization, and bureaucracy and the other to fragmentation and marginalization. 6.​ Complex flexibility in operations. Operations need simultaneously to be extremely structured, as often organizations need to be compliant with the requirements of institutional donors, but also allow for improvisation and be in a constant dialogue with a variety of stakeholders. BBC CASE Intro to management of cultural industries The BBC’s public broadcasting service (i.e., 9 national TV channels plus regional programming, 11 national radio stations, 40 local radio stations, and an extensive website) is financed by license fees License fees are taxes paid by everyone in the UK who watches or records TV programs, regardless of the actual use of the BBC By April 2020, the annual fee will be £157.50, which means that BBC’s services will cost about £13 a month. Besides the public broadcasting service (PBS), representing 74% of the company’s revenue in 2018, the BBC operates other activities: BBC Worldwide, BBC Studios, and Other Commercials. the company broadcasts TV and radio programs in 60 countries across Europe, the Americas, EMEA, and Asia in more than 40 different languages. BBC is the main producer of content produced in the UK. In the period 2010-2017, the BBC’s license fee income remained substantially flat, while costs continued rising, together with the popularity of online broadcasting platforms like Netflix and Amazon Prime Video. As part of the measures taken to cut costs and increase revenues, the BBC moved some small services like BBC Three online. Britbox is an ad-free subscription video-on-demand service poised to compete with Netflix and similar platforms, which targets a niche audience interested in high-quality, distinctive British TV.With BritBox, the BBC deviates from its traditional funding model, adding to the license fee and commercial income subscription revenues received for the provision of additional services. Strong dependence of licence fee puts a cap on revenue possibilities for BBC and thus calls for careful cost management. Over the years, the company has moved in the following directions: ​ enhance efficiency and productivity, especially cutting overheads (currently at around 5% of total costs); ​ decrease content scope, changing programs and services; ​ add commercial income and saving working capital. Considering the financial constraints, the development of BBC’s cultural strategy has become more difficult, in the effort to reconcile sustainability and public service. According to the Royal Charter, BBC’ is managed by the BBC Board, which is its governing body and which consists of fourteen people: ten non-executive and four executive members. Charter lists its public purposes: 1.​ sustaining citizenship and civil society; 2.​ promoting education and learning; 3.​ stimulating creativity and cultural excellence; 4.​ representing the UK, its nations, regions and communities; bringing the UK to the world and the world to the UK; Intro to management of cultural industries 5.​ helping to deliver to the public the benefit of emerging communications technologies and services and taking a leading role in the switchover to digital television. In addition to specify the mission of the Corporation, the Charter lists its public purposes: ➔​ To provide impartial news and information to help people understand and engage with the world around them. ➔​ To support learning for people of all ages. ➔​ To show the most creative, highest quality and distinctive output and services. ➔​ To reflect, represent and serve the diverse communities of all of the United Kingdom’s nations and regions and, in doing so, support the creative economy across UK. ➔​ To reflect the United Kingdom, its culture and values to the world. This structure proved weak in coordination and communication. In particular, the Trust was unable to hold top managers accountable in front of the licence fee payers and to scrutinise executive performance. The company went under severe scrutiny for excessive payments given to executives without good reason.These events had a relevant negative impact on BBC’s credibility and reputation since 2012 Key issues facing the new board include: ​ Independence ​ Funding model ​ Diversity The BBC’s independence is structurally fragile, since it is a publicly funded body and thus needs to ensure its spending is prudent and justified by public interest. At the same time, the number of independent non-executive directors has increased. Intro to management of cultural industries The relationship between BBC and the Government might be problematic; an hostile Government could retaliate on the editorial choices of the broadcasters in several ways: ​ Boycott and barbs: questioning of the media; accusation of bias; refusing to be interviewed by BBC; ​ Looming funding settlement: the BBC is governed by royal charter, that sets out its public service obligation and its independence, and an agreement with the government, which outlines its regulatory duties and its funding. The current agreement on licence fee runs until 2027, but in 2022 the licence fee will be renegotiated; ​ Free TV licences for the elderly. This cost 745 million pounds in 2021/22. BBC has cut ⅔ of this and there is pressure to go back.The deal would come to a price: reducing news online service and privatize part of the service; ​ Decriminalizing non payments: this currently cost 200m in lost income for BBC.Decriminalization will lead to mass evasion; ​ New leadership. tHe current director has been in place since 2012. He could either step down after centenary celebrations of 2022 or before. The decision is made by BBC board, but the Prime Minister may indirectly control it; the chairman and 4 non-executive directors are appointed by the recommendation of the Government. Funding options alternative to licence fee include: ​ Household levy: it ensures universal reach and stable income. It also implies low costs of collection, since it can be linked to existing household payments. However, household levy might be considered unfair, since it also applies on those that do not watch television. Moreover, the model is as fragile as licence fee concerning political independence. ​ Direct government funding: it implies broad reach and no cost of collection. However, it entails a strong dependence on the Government, which jeopardises the stability of available resources. ​ Subscription: it is considered a fair model since the payers are the users of the service. Being the payment decentralised to consumers, political independence is guaranteed, too. Nevertheless, subscription does not ensure universality and is usually based on populist programming. ​ Advertising: it allows consumers to watch TV for free or at a low price, even if viewers can get annoyed because of ads. The model ensures broad reach, which is vital for advertisers, but the desired audiences are usually defined with rationales other than social aims. This funding option also guarantees political independence, but content can be influenced by advertisers’ interests. In the meantime, BBC will stop providing TV service for free for residents older than 75 years old, (nearly 1.5 million households) as of August 2020, arguing the Intro to management of cultural industries alternative would mean big cuts to the broadcaster’s programming. The change was originally planned to be effective June 1st, but was delayed due to Covid pandemic. The decision is part of a funding settlement that allowed the licence fee to rise by inflation and ended almost two decades of state funding for free TV licences for the over-75s. Diversity In July 2017, the BBC disclosed the pay of its top on-air talents and, in doing so, revealed a wide gender pay gap: top women at BBC were paid five times less than top men for the same work. In general, it was argued the company was boosting for the enhancement of all the minorities in its staff, so to create a fair and diverse organisation able to reflect BBC’s universal audience. The Table 1 shows 2017 proportions of underrepresented categories above the whole staff and BBC’s 2020 targets about diversity and inclusion. In 2019, the company appointed a head of editorial diversity, in charge of ensuring a more diverse set of programs, producers, characters and perspectives. 1. How effective is BBC governance in ensuring the organization’s independence? BBC governance has made significant strides toward maintaining organizational independence, but structural vulnerabilities and external pressures still pose challenges. Strengths in Governance: 1.​ Royal Charter Framework: The BBC operates under a Royal Charter, ensuring constitutional independence. This framework is reviewed every ten years and is accompanied by an Agreement with the Secretary of State for Culture, Media, and Sport, which further defines its autonomy and responsibilities. 2.​ BBC Board: The current governance structure, implemented in 2017, replaced the dual-board system (Trust and Executive Board) with a streamlined BBC Board. This structure aims to enhance transparency, accountability, and operational efficiency while balancing public interests. 3.​ Independent Oversight by Ofcom: Ofcom's regulatory role has been expanded, which adds a layer of independent scrutiny to BBC operations. 4.​ Accountability to License Fee Payers: The BBC is directly accountable to the public, as its primary funding source is the license fee. This reinforces its obligation to serve the public interest. Challenges to Independence: Intro to management of cultural industries 1.​ Political Influence: Despite the Charter, the BBC’s funding is subject to governmental decisions, such as renegotiating license fees and determining support for free TV licenses for certain demographics. This dependency exposes the organization to political retaliation. 2.​ Royal Charter Appointments: The government influences BBC leadership through its recommendations for appointments to key non-executive roles, potentially affecting impartiality. 3.​ Financial Constraints: Increasing financial pressures, especially with the rise of digital competitors, necessitate cost-cutting measures, which may compromise the breadth and quality of public service broadcasting. Overall, while the governance structure has improved transparency and independence, financial and political dependencies remain critical concerns. 2. How does the BBC shape the public sphere? The BBC plays a pivotal role in shaping the public sphere in the UK and globally through its programming, cultural representation, and digital innovation. Impact on the Public Sphere: 1.​ Fulfilling Public Service Mandate: ○​ The BBC’s mission is to inform, educate, and entertain, which helps create an informed citizenry. ○​ It provides impartial news, high-quality programming, and culturally significant content, ensuring broad societal engagement. 2.​ Promotion of Diverse Voices: ○​ The BBC reflects the diversity of the UK through regional programming and initiatives aimed at minority inclusion in both on-air and production roles. ○​ Projects like BritBox also promote British culture internationally. 3.​ Digital Engagement: ○​ Platforms like BBC iPlayer have transformed how audiences interact with media, offering on-demand content that aligns with contemporary consumption habits. ○​ The BBC’s leadership in digital broadcasting integrates the organization into global discussions about media, technology, and accessibility. 4.​ Representation of National Identity: ○​ Through its public purposes outlined in the Royal Charter, the BBC connects UK communities and represents the nation to the world, contributing to a collective sense of identity and cultural heritage. 5.​ Championing Debate and Pluralism: Intro to management of cultural industries ○​ As one of the most trusted media organizations, the BBC fosters healthy debate and pluralism, essential for democratic engagement. By combining a strong public mandate with technological innovation and cultural representation, the BBC significantly enriches the public sphere despite facing challenges from evolving media landscapes. ERT Case In October 2009, the disclosure of information on national public debt in Greece led to its downgrading by the major international credit rating agencies and to the rise of interest rates on Greek bonds. - > the Greek Government agreed to implement a series of tight austerity measures to reduce public spending. While from March 2012 to December 2013 a total of 141.98 billion euro were given to Greece, on 28 April 2013, a bill including 15.000 job cuts by 2014 (4000 of which by 2013) was approved. Salaries were cut up to 75%, pensions severely reduced, welfare and health coverage available in nominal terms. Corporate investments were depressed due to heavy taxation. Unemployment skyrocketed from approximately 10% in 2010 up to 26%. The general elections of May and June 2012 did not bring the required majority to any political party, paving the way to a coalition government. The crisis was the result of a skyrocketing public debt that had evolved due to mismanagement of resources and corruption; severe measures were needed to reduce the gap between Greece and the rest of Europe. Solidarity and anchoring to traditional values and lifestyles were viewed as the best way to overcome the crisis. Many were worried, confused and disappointed. The media landscape The Greek media landscape at the time of the crisis showed the dominance by far of TV as the preferred source of information and entertainment, Before the closure, ERT – the national public broadcaster – had a total share of 14,9% and its first channel, NET, reached 8,1% of audience share. By June 2012, there were 5.7 million internet users in Greece; A Eurobarometer survey of 2011 revealed that only 28% interviewed stated that they trusted the press and only 22% trusted television news in Greece, compared with an EU average of 43% and 53% respectively. ERT was mainly funded by a fee paid by the citizens through the electricity bill; in 2013 the cost was 4.30 euros per month. The company’s yearly turnover was approximately 240 million euro, from which 85% went to operating costs and salaries. Intro to management of cultural industries ERT had a reputation for being highly politicized; both unions and political parties were very powerful forces orienting programming on the one hand and employment policies on the other. = limited credibility Compared to broadcasters from other countries, ERT was slow in embracing technological innovation. After a series of strikes, on June 11 2013, following the decision of the conservative government, the company was shut down, after 75 years of uninterrupted broadcasting. On June 17, 2013, the Council of State, which is the Greece’s highest court, ruled that the decision was unconstitutional, but the Government refused to back down. “The public sphere is a concept very complex to grasp. (..) The things that we considered public are now threatened by the private (..) in recent years there is a great attack (not only in europe) to what is considered public: health, education, transportation, natural resources. “the most important public good is information. After a month from the shutdown, a channel appeared on the ERT’s frequencies, bearing the name “ΔΤ”. This “New Hellenic Radio, Internet, Television“ (NERIT) started operating under full capacity at the end of April 2014, NERIT operated for one year; in 2015, the government (by then under Alexis Tsipras as Prime Minister) restored ERT as Greece’s public broadcaster. Many citizens expressed that a problematic and inefficient organization cannot be supported with public money. On the other hand, the judges against underlined that the decision was a sign of an excessive power by the government over society particularly on such a delicate issue. 1. Role of ERT During the Greek Crisis ​ Informative Role: ERT served as a critical source of news and cultural programming, targeting diverse audiences including the Greek diaspora, which relied on ERT to maintain a connection with their homeland. ​ Cultural Repository: It played a significant role in preserving and promoting Greek culture, providing programs of higher cultural value than commercial broadcasters. ​ Public Broadcasting Ideal: ERT represented the public good by offering non-commercialized and educational content, serving as a counterbalance to private media dominance. What Should It Be? Intro to management of cultural industries ​ Neutral Information Provider: ERT should have functioned as an impartial platform offering accurate, transparent information about the crisis and government policies to build public trust. ​ Crisis Communicator: As a public broadcaster, ERT could have played a pivotal role in educating citizens about austerity measures, the implications of the crisis, and ways to navigate economic challenges. ​ Cultural Sustainer: Amidst the financial turmoil, ERT should have intensified efforts to preserve Greek cultural identity, fostering social cohesion. 2. Impact of ERT Shutdown ​ Economic Impact: ○​ Job Losses: The immediate unemployment of 2,907 employees contributed to the already dire unemployment rates, exacerbating the economic strain on households. ○​ Privatization Push: The shutdown reflected a broader trend of privatization, which critics argued eroded public assets and services. ○​ Lost Revenue Channels: ERT's shutdown disrupted its role as a potential revenue generator through cultural exports and diaspora engagement. ​ Social Impact: ○​ Cultural Void: ERT’s closure led to the loss of unique cultural and educational programming, leaving private channels with entertainment-focused content to dominate. ○​ Erosion of Trust: The abrupt closure without parliamentary consensus undermined public trust in democratic governance and highlighted the government's excessive control over media. ○​ Civil Protests and Solidarity: The shutdown catalyzed nationwide protests, with citizens and employees uniting to oppose the decision. It also inspired acts of solidarity and collective action, such as artists performing in support of ERT employees. ○​ Diaspora Disconnect: Greeks living abroad lost a vital link to their culture and homeland. In conclusion, the ERT shutdown highlighted tensions between austerity measures and preserving public services, revealing the delicate balance needed to navigate economic crises while maintaining cultural and democratic integrity. THE MET CASE Background of the Met: ​ Founded in 1870, the Met is the largest art museum in the U.S., with a $2.5 billion endowment, 7 million annual visitors, and significant assets. Intro to management of cultural industries ​ The institution underwent leadership changes, with Thomas Campbell becoming director in 2007, following the long tenure of Philippe de Montebello. Campbell's Vision and Initiatives: 1.​ Modernization and Accessibility: ○​ Focused on making the museum less intimidating and more accessible to younger audiences. ○​ Emphasized digitizing collections and promoting contemporary art. 2.​ Strategic Changes: ○​ Expanded the digital media department with a $40 million budget, employing 75 staff (some part-time). ○​ Received major contributions, like Leonard Lauder's $1 billion Cubist art collection, but faced conditions to delve deeper into contemporary art. 3.​ Infrastructure and Financial Ambitions: ○​ Undertook costly projects, including a $600 million new wing for modern art, which was postponed due to funding issues. ○​ Leased and renovated the former Whitney Museum building (Breuer) to house modern and contemporary art temporarily. Challenges During Campbell’s Tenure: 1.​ Financial Struggles: ○​ The 2008 financial crisis significantly impacted the Met's endowment and revenues. ○​ Persistent annual deficits of $4-8 million, escalating to $40 million in 2016. ○​ Costly commitments like the Breuer building lease and renovations strained finances. ○​ A two-year financial restructuring plan included staff cuts, hiring freezes, and reduced programming. 2.​ Leadership and Management Criticism: ○​ Campbell’s leadership style drew criticism, including accusations of misconduct and lack of unity among staff and the board. ○​ High turnover in curatorial leadership resulted in the loss of institutional memory. ○​ Critics argued that his focus on modernization overshadowed the Met’s traditional scholarship mission. 3.​ Unmet Expectations: ○​ Delayed or halted projects, like the new wing, dented confidence in Campbell’s leadership. Intro to management of cultural industries ○​ Discontent grew among traditionalists regarding his approach to digital initiatives and redesigns, such as the logo and website. Achievements and Legacy: ​ Despite challenges, Campbell oversaw an increase in museum attendance to 7 million annually and opened the Breuer wing, exceeding visitor expectations. ​ His efforts highlighted broader trends in cultural institutions struggling with structural deficits and balancing modernization with traditional missions. Question 1: How do cultural organizations balance their dual role as cultural stewards and economic entities? Introduction: Cultural organizations are uniquely positioned as custodians of heritage, education, and creativity, while simultaneously operating in a world that demands economic sustainability. This dual role often places them in a delicate balancing act between cultural stewardship and financial imperatives. From museums to public broadcasters, these institutions face mounting pressures to innovate and adapt in a landscape defined by globalization, digitalization, and diminishing public funding. This essay explores the challenges and strategies cultural organizations employ to reconcile their cultural missions with economic realities, using key case studies such as the Met, the BBC, and ERT. Economic Viability vs. Cultural Mission: Cultural organizations are inherently fragile due to their reliance on resources for preservation, programming, and public engagement. Yet, they are also tasked with providing public value that often transcends financial metrics. For example, museums like the Metropolitan Museum of Art (the Met) in New York City strive to balance their mission of preserving and sharing cultural artifacts with the need to generate income through ticket sales, donations, and special exhibitions. During Thomas Campbell’s tenure as director, the Met faced financial strain due to ambitious modernization projects, such as the Breuer building lease, while simultaneously seeking to broaden its audience base. These financial challenges highlighted the difficulty of maintaining cultural authenticity while adapting to market pressures. Similarly, the BBC, a public broadcaster, exemplifies this tension. As a publicly funded institution through license fees, the BBC operates under a mandate to provide impartial news, educational content, and entertainment. However, rising Intro to management of cultural industries competition from digital platforms like Netflix has forced the BBC to diversify its revenue streams, exemplified by the launch of BritBox, a subscription-based service. This initiative underscores the necessity of balancing public service objectives with commercial strategies to remain financially viable. Governance and Accountability: Effective governance plays a pivotal role in helping cultural organizations navigate their dual responsibilities. Ostrom’s principles for managing common goods, such as clearly defined boundaries and collective decision-making, provide a framework for cultural governance. For instance, the BBC’s governance structure, guided by its Royal Charter, ensures accountability to license fee payers while promoting independence from political interference. However, this structure has faced criticism for its susceptibility to government influence, particularly during license fee renegotiations. In contrast, the Greek public broadcaster ERT serves as a cautionary tale. Prior to its controversial closure in 2013, ERT struggled with inefficiency, political interference, and a lack of audience trust. Its inability to align governance with public expectations and economic sustainability led to its downfall, highlighting the importance of accountability and stakeholder engagement. Strategies for Balance: Cultural organizations employ various strategies to reconcile their cultural and economic goals. Digitalization has emerged as a key tool for increasing accessibility and engagement. For example, the Met’s digitization of its collections not only enhances public access but also creates opportunities for revenue generation through licensing and partnerships. Similarly, the BBC’s iPlayer platform has redefined audience engagement, offering on-demand content that aligns with modern consumption patterns. Innovative funding models are another critical strategy. While traditional sources such as grants and donations remain important, cultural organizations increasingly explore alternative revenue streams. The BBC’s BritBox initiative and the Met’s focus on high-profile exhibitions and contemporary art demonstrate how diversification can support long-term sustainability. Conclusion: Intro to management of cultural industries Balancing cultural stewardship with economic viability is a complex and ongoing challenge for cultural organizations. While financial imperatives often clash with cultural missions, effective governance, innovative strategies, and a commitment to public value can help bridge this divide. By learning from the successes and failures of institutions like the Met, the BBC, and ERT, cultural organizations can navigate the tensions inherent in their dual role, ensuring their relevance and sustainability in an ever-changing world. Question 2: Discuss the role of cultural organizations in fostering social inclusion and community identity. Introduction: Cultural organizations play a vital role in fostering social inclusion and strengthening community identity by serving as platforms for engagement, education, and representation. From museums to performing arts institutions, these organizations connect diverse audiences with cultural heritage and contemporary creativity. However, achieving these goals is not without challenges, as economic constraints, logistical hurdles, and the tension between tradition and innovation often come into play. This essay examines how cultural organizations contribute to social inclusion and identity-building, explores the obstacles they face, and highlights successful strategies through key case studies. Cultural Organizations as Catalysts for Inclusion: Cultural organizations are uniquely positioned to promote social inclusion by making art and culture accessible to marginalized groups. They address systemic inequities through initiatives such as urban regeneration programs and educational outreach, as emphasized by UNESCO’s Sustainable Development Goals (SDGs). For instance, Goal 4 of the SDGs emphasizes inclusive education, while Target 4.7 highlights the role of culture in promoting diversity and global citizenship. A practical example of fostering inclusion is seen in the efforts of local cultural organizations in cities like Milan, which host festivals and events to engage diverse communities. Such initiatives not only provide access to cultural experiences but also create opportunities for social interaction and cohesion, bridging divides across socioeconomic and ethnic lines. Challenges in Achieving Inclusion: Intro to management of cultural industries Despite their potential, cultural organizations face significant barriers in promoting social inclusion. Financial constraints often limit their ability to implement inclusive programs. Many institutions, like the BBC, rely on shrinking public funding and face pressure to commercialize their offerings, which can alienate underrepresented audiences. Similarly, the ERT’s closure during the Greek financial crisis highlighted how inadequate governance and lack of audience trust can undermine a cultural organization’s social role. Logistical challenges also play a role, particularly in reaching geographically dispersed or underserved populations. For example, the centralization of cultural infrastructure in urban areas often excludes rural communities from access to cultural resources. Additionally, audience resistance to change can hinder efforts to diversify programming, as seen in the New York Times’ shift to digital subscriptions, which initially faced skepticism from loyal readers. Success Stories: Several cultural organizations have successfully fostered inclusion and community identity by embracing innovative approaches. The BBC, for example, has made strides in reflecting the diversity of the UK through regional programming and initiatives aimed at minority inclusion. By addressing gender and racial disparities within its workforce, the BBC has also demonstrated a commitment to representation at an organizational level. Iconic landmarks and cultural institutions can also serve as powerful tools for inclusion. In Milan, the redevelopment of cultural spaces in underrepresented neighborhoods has not only revitalized local economies but also created hubs for community engagement. These efforts underscore the importance of cultural organizations in building identity and fostering pride in local heritage. Conclusion: Cultural organizations have a profound impact on social inclusion and community identity, serving as bridges between diverse populations and their shared heritage. While challenges such as financial constraints and audience resistance persist, innovative strategies and inclusive governance can help overcome these barriers. By drawing on successful examples from institutions like the BBC and urban cultural initiatives in Milan, cultural organizations can continue to play a pivotal role in fostering inclusive, cohesive, and vibrant communities. Intro to management of cultural industries Question 3: Evaluate the impact of globalization on cultural diversity and the role of cultural organizations. Introduction: Globalization has profoundly influenced cultural diversity, creating opportunities for cross-cultural exchange while simultaneously threatening the preservation of local traditions. Cultural organizations stand at the forefront of this dynamic, navigating the complex interplay between global integration and cultural specificity. This essay examines the dual effects of globalization on cultural diversity, the challenges it poses, and the strategies employed by cultural organizations to mediate these impacts. Positive Impacts of Globalization: Globalization has expanded the reach of cultural organizations, enabling them to share diverse cultural expressions with a global audience. Digital platforms and international collaborations have facilitated the dissemination of art and heritage, as exemplified by the Metropolitan Museum of Art’s global exhibitions. These initiatives not only increase accessibility but also foster cross-cultural understanding, showcasing the potential of globalization to enrich cultural diversity. Another positive outcome is the hybridization of cultural forms, where global influences blend with local traditions to create innovative expressions. For instance, contemporary street art, which originated as a form of protest, has gained recognition as a legitimate cultural practice in cities worldwide, reflecting the fusion of global and local elements. Negative Impacts of Globalization: Despite its benefits, globalization poses significant risks to cultural diversity. The commodification of cultural heritage often reduces it to a marketable product, stripping it of its deeper meanings. The British Museum, for example, has faced criticism for exhibiting artifacts removed from their countries of origin, raising questions about ownership and cultural appropriation. Globalization also exacerbates cultural homogenization, where dominant cultural forms overshadow local traditions. The rise of global entertainment giants like Netflix has reshaped cultural consumption patterns, often prioritizing mainstream content over niche or traditional offerings. This trend threatens the survival of unique cultural expressions, particularly in regions with limited resources to compete on a global scale. Intro to management of cultural industries Role of Cultural Organizations: Cultural organizations play a critical role in preserving and promoting diversity amidst globalization. UNESCO’s conventions on cultural heritage protection underscore the importance of safeguarding traditions while encouraging global exchange. Museums and cultural institutions can act as stewards of local heritage, as seen in the Aphrodite of Morgantina case, where Italy reclaimed a stolen artifact to assert its cultural identity. Additionally, cultural organizations can leverage globalization to advocate for inclusivity and pluralism. By collaborating with international partners and embracing digital tools, they can amplify underrepresented voices and challenge cultural homogenization. The BBC’s global programming and the Met’s digitization efforts are prime examples of how cultural organizations can balance global reach with local authenticity. Conclusion: Globalization presents both opportunities and challenges for cultural diversity. While it enables greater cultural exchange and innovation, it also risks commodifying and homogenizing local traditions. Cultural organizations must navigate these tensions by acting as mediators, preserving heritage while embracing global influences. By drawing on examples like UNESCO, the BBC, and the Met, it is evident that cultural organizations can play a pivotal role in shaping a more inclusive and diverse global cultural landscape. Question 4: How can digital technologies enhance the sustainability of cultural organizations? Introduction: In an era of rapid technological advancement, digital technologies have emerged as powerful tools for enhancing the sustainability of cultural organizations. By increasing accessibility, improving engagement, and diversifying revenue streams, digital solutions offer cultural institutions new ways to fulfill their missions. However, the integration of technology also presents challenges, including financial costs and audience adaptation. This essay explores the transformative potential of digital technologies for cultural organizations, drawing on examples such as the Museo Egizio and the BBC. Intro to management of cultural industries Applications of Digital Technologies: Digital technologies have revolutionized the way cultural organizations interact with their audiences. The digitization of collections, such as the Museo Egizio’s use of X-ray technology to reve