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November 08, 2007

« The Creative Corporation? | Main | Open Source City »

Henry Chesbrough gets to the nub of the matter in this piece over at Business Week  (via The Intangible Economy):

What makes the often fractious negotiations particularly interesting this time are the underlying business-model challenges confronting both sides. Business models enable companies (and organizations such as the 12,000-member Writers Guild of America or the Alliance of Motion Picture & Television Producers) to create and capture value. Once established, successful models often take on a life of their own. This can lead to inertia, and a prevailing model can drift out of alignment with the future needs of an industry.

That's what has happened here. The traditional business models of both sides worked well when there were a handful of movie studios and three major TV networks. But now everyone can be a writer or a producer, and every computer is potentially a studio, able to create and publish content. More than 1 billion people on the planet are connected to the Internet, a healthy portion of them via high-speed broadband.

This strike is a signal event in the emergence of the creative economy.  The key issue at stake is one that would have fascinated Marx - how will the returns or royalties to creative endeavor be distributed.  In the case, writers are saying they deserve to be treated as more than "workers" and to share in the rewards to the content they are generating.  The real battles of the creative economy have shifted from factory sites and ownership and control of physical assets to those over intellectual property and intangible assets. One dimensions will be determining how creators share in the returns to their creations. A second will be determining how to rejigger and dial-back the current intellectual property regime (patents and more) to enable the optimal spread and diffision of new ideas. A third may well entail the whole building-block nature of knowledge and creativity:  If we truly "stand on the shoulders of giants," how are these past contributions to be recognized and rewarded? Stay tuned.


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Michael R. Bernstein

What I'm most curious about is the longer term effects the ongoing democratization of access to the tools for visual communication and creativity will have on Hollywood's (as a region) dominance as a creative hub for the industry...

Any thoughts, Richard?

Christine Flanagan

This is so darn interesting. I attended an innovation summit a few weeks ago where Irving Wladawsky-Berger (VP of Innovation at IBM) questioned whether any company can reinvent itself without having a near death experience. He was followed-up later in the day by Clay Christensen who likened business model innovation to biological evolution. Populations evolve, even though individuals can't, Clay said. That’s because the capabilities of individuals reside in their processes and their values, and by their very nature, processes and values are inflexible and meant not to change. Until of course, they’re near death. Which, according to Irving, is why Big Blue was able to transform itself.
Is Hollywood near death? To your point Richard, this strike affects the entire building-block nature of knowledge and creativity. This is a near-death experience and while Hollywood as a population will most certainly pull through, the more important question is can all parties concerned recover with it?

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