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Advance Contracting, Word-of-Mouth, and New-Product Success in Creative Industries: A Quantification for Books

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  • Jonathan Beck

Abstract

The odds of success in creative industries (e.g., book, music, or movie) are often said to be particularly low. Furthermore, due to the nature of advance contracting between creator and producer, the standard approach to use sales as a success measure can be misleading from the producer's perspective. This article presents a novel approach to empirically identify producer success by incorporating the standard terms of contract between creator and producer into a parsimonious model of information diffusion (word-of-mouth) about new products. The model is applied to weekly sales data for a representative sample of novels. Estimation results indicate a success rate between 10% and 15% for this market.

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  • Jonathan Beck, 2012. "Advance Contracting, Word-of-Mouth, and New-Product Success in Creative Industries: A Quantification for Books," Journal of Media Economics, Taylor & Francis Journals, vol. 25(2), pages 75-97, July.
    • Handle: RePEc:taf:jmedec:v:25:y:2012:i:2:p:75-97
    DOI: 10.1080/08997764.2012.676581
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    Cited by:

    1. Christian Peukert & Imke Reimers, 2018. "Digital Disintermediation and Efficiency in the Market for Ideas," CESifo Working Paper Series 6880, CESifo.
    2. Georg Goetz & Daniel Herold & Phil-Adrian Klotz & Jan Thomas Schaefer, 2020. "Innovation, Bestsellers and Digitization - Where to Find the Needle in the Haystack?," MAGKS Papers on Economics 202012, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Christian Peukert, 2019. "The next wave of digital technological change and the cultural industries," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(2), pages 189-210, June.
    4. Hviid, Morten & Izquierdo Sanchez, Sofia & Jaques, Sabine, 2016. "From publishers to self-publishing: The disruptive effects of digitalisation on the book industry," MPRA Paper 76057, University Library of Munich, Germany.
    5. Vorndran, Ann-Sophie, 2020. "Einsatz von IT in der Buchbranche: Literaturbericht," Erlangen Contributions to Media Management and Media Economics 12/2020, Friedrich-Alexander University of Erlangen-Nuremberg (FAU), Institute for the Study of the Book, Professorship of E-Publishing and Digital Markets.

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