Basic elements

Harold L. Vogel

doi:10.1017/CBO9780511976803.004

Chapter 2 - Basic elements

from PART I - Introduction

Published online by Cambridge University Press: 01 June 2011

Harold L. Vogel

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Harold L. Vogel: Affiliation:
Independent Analyst

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Summary

Listen to the technology and find out what it is telling you.

– Carver Mead, chip design pioneer

Entertainment and media industries all operate within a framework of commonly shared elements. All sectors are conditioned by the same underlying rules, are affected by changes in distribution technologies at approximately the same time, and, because of the nature of the products and services offered, are often both buyers and sellers of advertising services. The relevance of these basic and usually invisible aspects common to every entertainment and media business sector is explained in this chapter.

Psychological roots

What does entertainment do for us? What drives our need for it? These basic questions are at the heart of the economics of entertainment because the answers have an important bearing on the quantities and qualities of demand and supply for all types of entertainment and media products and services. Those who study the psychology of entertainment are now just beginning to provide answers to these questions. In what is known as the objectivist approach, for instance, it is suggested that at the most elemental level entertainment and media provide people with at least three psychological benefits (or payoffs, in the lingo of economics).

A sense of competence, that an emotional and intellectual challenge has been successfully met. That is, you got the joke, followed the plotline, understood the lyrics, carried the tune, scored high on the video game, etc.
A feeling of autonomy – Hey, you did this on your own too (you think, even though your selections were probably highly influenced by others).
[…]

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Type: Chapter
Information: Entertainment Industry Economics
A Guide for Financial Analysis
, pp. 41 - 68

DOI: https://doi.org/10.1017/CBO9780511976803.004 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2010

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