Risky Business pp7 Flashcards
(39 cards)
Risky Business
Risk is found in all human activity
Very little consensus about how to define risk
Risk is something which can be measured – 1921- Frank knight
Holton- 2004- for risk to exist the following conditions must exist-
Uncertainty about potential outcomes
Outcome has to matter in terms of providing utility
Example: Jumping out of an airplane with no parachute is not risk
What is a risk?
Common definitions:
A situation involving exposure to danger.
To expose someone or something to danger, harm, or loss.
Business definition: NYU School of Business
“…a combination of danger and opportunity…”
History of Risk
Current existence possible due to risk
Someone has to be willing to take a risk and challenge the status quo
We are exposed to risk everyday- deliberate and not deliberate
Risk and survival have gone hand in hand
Prehistoric humans- short lives
Physical risk and reward went hand in hand- risk taker->
food/mate/chance of survival
More on History of Risk
Transportation created further risk
Shipping->wealthy risked their finances
Poor risked their lives
Risk provides opportunities and rewards
Also uncertainty and loss
How does production work To reduce risk?
SURPLUS of talent
This talent must meet needs of PROFIT SEEKING firms
Talent pushes up against an INPUT BOUNDARY
Filter to select small group of creative talent
BOUNDARY SPANNERS help in the process
Boundary Spanners Agents, Managers, Scouts, Others
OUTPUT BOUNDARY
Output Boundary- Sales, Marketing, Publicity, Advertising
GATEKEEPERS Select and disseminate a handful of products to the public
Input and output boundaries
Boundary spanners- people that connect artists and firms
Audition
Social events
Networking
Input boundary may be broken
Manufacture the product- music, movie, book, program
Marketing
Interviews
Promotional events
Contests
Publicists
Sales
Breach the Output boundary- filter to reach the audience
Products aim for…
Surrogate consumers- a commercial enterprise, consciously engaged and paid by the consumer or other interested party on the behalf of the consumer to make or facilitate selection decisions on behalf of that consumer.
Potential social Risks
Surrogate shoppers might behave contrary to the interests of the clients they represent
Might have a powerful vested interest in preserving their own businesses
Incompetence and mistakes in judgment may be compounded by maliciousness, mismanagement, greed, and fraud
The decision criteria of surrogate shoppers may differ significantly from those of clients.
Potential social benefits
Protection from harm and efficient use of resources
Surrogates often possess greater knowledge- Market Maven/Opinion Leader
Have made a large volume of similar decisions
How do surrogate consumers make decisions?
Marketing may reach out to gatekeepers such as EW, People, New York Times, Washington Post
These opinion leaders/market mavens/connectors/surrogate consumers then pick some products
Review those products
Amazon- Vine Voice
Payola= Pay + Victrola- illegal in 1960
Independent Record Promoters- also illegal
Payments made for high visibility displays
SYNERGY- media conglomerates that own a variety of media
Minimizing risk
Adhere to CULTURAL CONVENTIONS
Established genres, topics, and styles
Genres- organizational devices- allow for working within known framework
Not fitting in to a genre can make marketing and salability difficult
Human beings categorize and go with the known
Production Perspective
Producers have to be careful on what they make a film on
Hollywood Surefire
cc
Who is Frank Knight?
Risk is something that can be measured
RISK: UNCERTAINTY OF POTENTIALLY OUTCOMES
Not knowing what will happen
Risk in 2 words!
RISK IS A COMBINATION OF DANGER AND OPPORTUNITY!!!
What did Holton say?
Holton- 2004- for risk to exist the following conditions must exist-
Uncertainty about potential outcomes
Outcome has to matter in terms of providing utility
Example: Jumping out of an airplane with no parachute is not risk
What does risk must have?
Someone has to be willing to take a risk and challenge the status quo
We are exposed to risk everyday- deliberate and not deliberate
Rich and Poor Risks:
poor are risking their lives=
Rich was risking their wealth
What makes a fluke risk?
Chance does.
How does production work To reduce risk?
SURPLUS of talent
This talent must meet needs of PROFIT SEEKING firms
Talent pushes up against an INPUT BOUNDARY
Filter to select small group of creative talent
BOUNDARY SPANNERS help in the process
Boundary Spanners Agents, Managers, Scouts, Others
OUTPUT BOUNDARY
Output Boundary- Sales, Marketing, Publicity, Advertising
GATEKEEPERS Select and disseminate a handful of products to the public
Boundary spanner:
Boundary spanner: person and agency that are looking for ppl that have a certan talent. They seek ppl to bring into their movie
Gatekeepers:
Gatekeepers: they are the ones who decide who ppl with talent make it out to the public
Surrogate consumer
Surrogate consumers- a commercial enterprise, consciously engaged and paid by the consumer or other interested party on the behalf of the consumer to make or facilitate selection decisions on behalf of that consumer.
