Hollywood Studio Filmmaking in the Age of Netflix: A Tale of Two Institutional Logics

Allègre L. Hadida, Joseph Lampel, W. David Walls, Amit Joshi

Research output: Contribution to journalArticlepeer-review

Abstract

Online streaming services are challenging long-standing decision-making processes in the traditional motion picture industry, thus placing Hollywood major studios at a crossroads. We use the institutional logics perspective to examine how both traditional studios and online streaming services make strategic decisions on which films to produce and how these films are to be distributed; and then scenario analysis to explore how their interaction will likely evolve. We argue that the key criteria that studio executives use to make production and distribution decisions are shaped by what we define as a commitment institutional logic: decision-making heuristics that focus their attention on theatrical release and box office intakes. In contrast, online streaming services follow a convenience institutional logic, the product of advanced data analytics to increase subscriptions. In the convenience institutional logic, the need to drive online traffic by providing users with an extensive catalogue of movies guides film production and distribution decisions. Whereas the commitment logic aims for mass-market hits in cinemas, the convenience logic seeks to reach a wide range of subscribers at home with micro-segmented offerings. We compare the two logics, develop four scenarios of how the interaction between them may shape the film industry, and offer recommendations.
Original languageEnglish
JournalJournal of Cultural Economics
Volume2020
Early online date31 Jan 2020
DOIs
Publication statusPublished - 2020

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