Entertainment & Leisure

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HBS Cases: LEGO

LEGO toys have captivated children and their parents for 80 years. But managing the enterprise has not always been fun and games. Professor Stefan H. Thomke explains the lessons behind a new case on the company. Open for comment; 14 Comments posted.

Culture Changers: Managing High-Impact Entrepreneurs

In her new Harvard Business School course, Creative High-Impact Ventures: Entrepreneurs Who Changed the World, professor Mukti Khaire looks at ways managers can team with creative talent in six "culture industries": publishing, fashion, art-design, film, music, and food. Open for comment; 13 Comments posted.

HBS Cases: Sir Alex Ferguson--Managing Manchester United

For almost three decades, Sir Alex Ferguson has developed the Manchester United soccer club into one of the most recognized sports brands in the world. Professor Anita Elberse discusses the keys to Sir Alex's long-time success. Open for comment; 22 Comments posted.

HBS Cases: Branding Yoga

As yoga's popularity has grown into a $6 billion business, a cast of successful entrepreneurs has emerged with their own styles of the ancient practice. Yet yoga's rise underscores a larger question for Professor Rohit Deshpandé: Is everything brandable? Open for comment; 18 Comments posted.

An Exploration of Luxury Hotels in Tanzania

Diego A. Comin

Tanzania is justly famous for its incredible natural landmarks such as the Rift Valley, Ngorongoro Crater, Lake Manyara, Mount Kilimanjaro, Zanzibar, and, above all, the Serengeti and the Great Migration. Why, despite being so richly endowed in touristic resources, does Tanzania receive relatively few tourists and little revenue from tourism? Diego Comin explored the drivers and influencing factors on the size of the tourism sector, using as a starting point the abnormally high prices of upscale hotels in Tanzania, especially in the safari areas. Findings suggest that the cost of supplying upscale hotel services is not sufficient to explain the abnormally high prices, and the more likely candidate is high markups. Interviews with hotel managers supported this conclusion. In addition, while cross-country differences in demand are large, once we control for these differences, discrepancies in upscale hotel prices account for a significant share of cross-country differences in demand, and cross-country differences in demand are very persistent. On the basis of the role of word-of-mouth, learning by doing, and pecuniary externalities in driving differences in demand, there may be room for the Tanzanian government to induce lower hotel prices and to try to independently increase the foreign perception of the country's attractiveness. Read More

Finding the Right Jeremy Lin Storyline

New York Knicks sensation Jeremy Lin is confounding every stereotype we have about modern day basketball stars. Professor Lakshmi Ramarajan suggests that Lin's complex storylines can help us put our own prejudices in focus. Open for comment; 7 Comments posted.

Expectations, Network Effects and Platform Pricing

Andrei Hagiu and Hanna Hałaburda

In markets with network effects, the value that users gain from platforms depends on the number of other users of the same type who join the same platform (direct network effects) or the number of users of a different type that join (cross-group network effects). Examples include social networks like Facebook or Google+, payment systems like PayPal or Visa, videogame systems like PlayStation 3 and Xbox 360, smartphone platforms like Apple's iPhone or Google's Android, etc. Users typically rely on the media, market reports, or word of mouth to form expectations about the total number of other users that join a given platform. However, most of the time these users are unable to calculate the effect of platforms' prices on adoption by other users. In other words, they do not take price into account when forming expectations. To analyze platform profits, Andrei Hagiu and Hanna Hałaburda model different degrees of user sophistication in forming price expectations in markets with network effects. They show that firms have different preferences regarding the average sophistication of their user base depending on market structure. Read More

When to Sell Your Idea: Theory and Evidence from the Movie Industry

Hong Luo

How completely should an innovator develop his idea before selling it? HBS assistant professor Hong Luo addresses this question in a theoretical framework that links the sales stage to the innovator's "observable quality." She uses the context of Hollywood movie script writing-looking at whether it's better to pitch the mere idea for a film or to write the entire screenplay and then try to sell it "on spec." Read More

HBS Cases: Making Lincoln Center Cool Again

When Reynold Levy took over as president of New York's Lincoln Center for the Performing Arts, he faced challenges ranging from crumbling buildings to an aging customer base. How could the venerable institution get its high notes back? Open for comment; 2 Comments posted.

HBS Cases: Lady Gaga

What goes into creating the world's largest pop star? Before her fame hit, Lady Gaga's manager faced decisions that could have derailed the performer's career. A new case by Associate Professor Anita Elberse examines the strategic marketing choices that instead created a global brand. Open for comment; 28 Comments posted.

Improving Fairness in Flight Delays

Airlines and the FAA don't like flight delays any more than passengers, but what's to be done? Assistant Professor Douglas Fearing and colleagues propose a "fairness" system that could save travelers time and service providers millions of dollars annually. Open for comment; 5 Comments posted.

Fame, Faith, and Social Activism: Business Lessons from Bono

Many executives struggle to balance work, family, and community, but for rock star Bono the effort is spread across the globe. In the HBS case "Bono and U2," professor Nancy F. Koehn discusses key business lessons to be learned from the famous band. Open for comment; 20 Comments posted.

Casino Payoff: Hands-Off Management Works Best

Micromanagers beware: Research of casino hosts by Harvard Business School's Dennis Campbell and Francisco de Asís Martinez-Jerez and Rice's Marc Epstein makes the case that hands-off management can work to improve employee learning and decision making. Open for comment; 11 Comments posted.

Terror at the Taj

Under terrorist attack, employees of the Taj Mahal Palace and Tower bravely stayed at their posts to help guests. A new multimedia case by Harvard Business School professor Rohit Deshpandé looks at the hotel's customer-centered culture and value system. Closed for comment; 0 Comments posted.

The Learning Effects of Monitoring

Dennis Campbell, Marc Epstein, and Francisco de Asis Martinez-Jerez

It's a challenge that all good managers face: How do you strike the right balance between encouraging autonomy among your employees and mitigating the risk that they'll make bad decisions? Using both field and quantitative data from the MGM-Mirage Group, this paper discusses how management controls affect the learning rates of lower-level employees. Research, focusing on hotel casino hosts, was conducted by Dennis Campbell and Francisco de Asís Martinez-Jerez of Harvard Business School and Marc Epstein of Rice University. Read More

When Does a Platform Create Value by Limiting Choice?

Ramon Casadesus-Masanell and Hanna W. Halaburda

Platforms such as video games and smartphones need to attract users, and the best way to do so is to offer more and more applications. Is there ever a point where a platform should limit the variety available? Researchers Ramon Casadesus-Masanell and Hanna Halaburda observe that in many situations users enjoy consuming applications together. When such consumption complementarities are present, users may benefit if the platform limits choice. With fewer applications to choose from, it is easier for users to take full advantage from shared consumption. Read More

HBS Cases: iPads, Kindles, and the Close of a Chapter in Book Publishing

Peter Olson

Book publishing is changing before our very eyes, even if the industry itself is fighting the transition with every comma it can muster. Harvard Business School professor Peter Olson, former CEO of Random House, wonders if books themselves may be in jeopardy. Read More

File-Sharing and Copyright

Felix Oberholzer-Gee and Koleman Strumpf

The researchers argue that file-sharing technology has not undermined the incentives of artists and entertainment companies to create, market, and distribute new works. The advent of new technology has allowed consumers to copy music, books, video games, and other protected works on an unprecedented scale at minimal cost. Such technology has considerably weakened copyright protection, first of music and software and increasingly of movies, video games, and books. While policy discussion surrounding file-sharing has largely focused on the legality of the new technology and the question of whether declining sales in music are due to file-sharing, the debate has been overly narrow. Copyright protection exists to encourage innovation and the creation of new works—in other words, to promote social welfare. This essay analyzes the landscape and identifies areas for more research. Read More

It Is Okay for Artists to Make Money…No, Really, It’s Okay

Robert D. Austin and Lee Devin

When art and commerce are mentioned in the same sentence, many people become bad tempered or think something needs fixing. This paper argues that more artists ought to make more money more often. HBS professor Robert Austin and theater dramaturg Lee Devin identify and undermine three fallacies about art and commerce, and suggest that it is necessary to carry on a more careful and less emotional conversation about the tensions between art and business and to overcome a general aversion to business common among artists and their patrons. They also stress the need to develop better theories about how art and commerce can achieve integration helpful to both. Read More

Long-Tail Economics? Give Me Blockbusters!

Although the Long Tail theory might argue otherwise, HBS marketing professor John Quelch believes in the power of blockbusters to excite consumers, motivate salespeople, and attract top talent. Read More

Getting Down to the Business of Creativity

Business leaders must manage and support creativity just as they would any other asset. Harvard Business School professors Teresa Amabile, Mary Tripsas, and Mukti Khaire discuss where creativity comes from, how entrepreneurs use it, and why innovation is often a team sport. From the HBS Alumni Bulletin. Read More

Dynamics of Platform Competition: Exploring the Role of Installed Base, Platform Quality and Consumer Expectations

Feng Zhu and Marco Iansiti

What factors drive platform success, long-run market structure, and market efficiency? Conventional wisdom suggests that for a new platform to be successful, either it must make its technology compatible with the incumbent, or its technical advantage must offer so much value to consumers that it exceeds the combination of functionality, installed base, and complementary goods value offered by the incumbent. Zhu and Iansiti develop a dynamic model to examine the evolution of platform-based markets. They find that a huge quality advantage may not be necessary for an entrant to be successful. Using data from the video game industry, they find support for their theoretical predications. Read More

Exclusivity and Control

Andrei Hagiu and Robin S. Lee

Music, television shows, movies, Internet and mobile content, computer software, and other forms of media often require a consumer to join a platform in order to access or utilize the media. This affiliation may take the form of a subscription to a distribution channel or purchase of a hardware device. One of the primary means of differentiation and competition between platforms for consumer adoption is the acquisition of premium or quality content. However, whether or not certain content is exclusive to one platform or is present on multiple platforms varies significantly from industry to industry. One can even view Apple's exclusive U.S. provision of the iPhone to AT&T as even more variation in the degree of exclusivity across industries. Why is it that some forms of content are available only on one platform, while others are distributed through several or all platforms available—that is, they "multihome"? This paper analyzes industry propensity for exclusivity and presents a model of platform competition. The key driving force is the nature of the relationship between the content and the platforms: outright sale (all control rights, particularly over content pricing, are transferred from the content provider to the platform) or affiliation (the content provider maintains control rights over pricing). Read More

Understanding the ‘Want’ vs. ’Should’ Decision

Todd Rogers and Katy Milkman

Pizza or salad? Consumers use different approaches to buying things they want (pizza) versus items they should buy (salad). In their research on online grocery-buying habits and DVD rentals, Harvard Business School's Katy Milkman and Todd Rogers, along with Professor Max Bazerman, provide insights on the want-should conflict and the implications for managers in areas such as demand forecasting, consumer spending habits, and effective store layout. Read More

Film Rentals and Procrastination: A Study of Intertemporal Reversals in Preferences and Intrapersonal Conflict

Katy Milkman, Todd Rogers, Max H. Bazerman

Throughout our lives, we face many choices between activities we know we should do and those we want to do. Examples of such choices include whether or not to visit the gym, to smoke, to order a greasy pizza or a healthy salad for lunch, and to watch an action-packed blockbuster or a history documentary on Saturday night. Using data on consumption decisions over time from an Australian online DVD rental company, this paper investigates how and why individuals make systematically different decisions when their choices will take effect in the present versus the future. Read More

Will the “Long Tail” Work for Hollywood?

The "long-tail phenomenon" is well documented: Amazon.com makes significant profits selling many low-volume books. But can the long tail work for video sales as well? A new working paper by professors Anita Elberse and Felix Oberholzer-Gee suggests that it may not bring the same benefits to Hollywood. Read More

How Kayak Users Built a New Industry

Carliss Y. Baldwin

Customers have produced some of the most important innovations in industries ranging from oil refining to scientific instruments. But how do user innovations take place? How do they get to market? Professor Carliss Baldwin discusses research into the rodeo kayak industry to understand the world of user innovation. Read More

Resisting the Seductions of Success

"The basic problem with the flow of success is that life can look very good when it really isn't," writes Harvard Business School's Joseph L. Badaracco Jr. His new book, Questions of Character, uses literature to look closely at issues of leadership. Here's an excerpt. Read More

Winners and Losers at the Olympics

Stephen Greyser

We know which athletes won and lost in Turin, but what about the companies and individuals looking for business gold? Professor Stephen A. Greyser looks at the results—and the possibilities ahead in China. Read More

Oprah: A Case Study Comes Alive

Writing a business case on the icon of daytime television and chief executive of a major media empire was challenge enough for HBS professor Nancy Koehn and colleagues. Oprah Winfrey's visit to campus to talk with graduating students made it ample reward. Read More

The Case of the Mystery Writer’s Brand

A look behind how professor John Deighton developed a case study of mystery writer James Patterson. From the HBS Alumni Bulletin. Read More

The Box Office Power of Stars

Anita Elberse

Just how much do movie stars contribute to box office success? HBS professor Anita Elberse researched the notion of "star power" to better understand how A-list players contribute to Hollywood's bottom line. Read More

Advertising and Expectations: The Effectiveness of Pre-Release Advertising for Motion Pictures

Anita Elberse and Bharat N. Anand

This research examines how advertising affects market-wide sales expectations for pre-release movies. The authors use data on advertising expenditures and an online stock market simulation, The Hollywood Stock Exchange (HSX), to track more than 280 movies released between 2001 and 2003. Their findings show that advertising affects the updating of market-wide expectations prior to release, and that this effect is stronger the higher the product quality. Read More

The Power of Stars: Do Stars Drive Success in Creative Industries?

Anita Elberse

The importance of star power is evident in creative industries from music and film to fashion and architecture. Star actors are paid millions of dollars, but is star talent critical to product success? What determines the value of stars? In the context of the movie business, Elberse calculated the returns in a study comparing 1,200 casting announcements on trading behavior in a simulated and real stock market setting. In a separate study, she also looked at the stars' impact on expected revenues. Read More

The Motion Picture Industry: Critical Issues in Practice, Current Research & New Research Directions

Jehoshua Eliashberg, Anita Elberse, and Mark A. A. M. Leenders

This paper reviews research and trends in three key areas of movie making: production, distribution, and exhibition. In the production process, the authors recommend risk management and portfolio management for studios, and explore talent compensation issues. Distribution trends show that box-office performance will increasingly depend on a small number of blockbusters, advertising spending will rise (but will cross different types of media), and the timing of releases (and DVDs) will become a bigger issue. As for exhibiting movies, trends show that more sophisticated exhibitors will emerge, contractual changes between distributor and exhibitors will change, and strategies for tickets prices may be reevaluated. Read More

Music Downloads: Pirates—or Customers?

Felix Oberholzer-Gee

Professor Felix Oberholzer-Gee and co-author Koleman Strumpf floored the disbelieving music industry with their findings that illegal music downloads don’t hurt CD sales. Oberholzer discusses what the industry should do next. Read More

Marketing Wine to the World

Michael Roberto

From consolidation to the growing clout of mass retailers, structural changes have hit the wine industry. Professor Michael Roberto discusses the move from elitism to mainstream appeal. Read More

Making Money Making Movies

Anita Elberse

HBS professor Anita Elberse talks about the state of the international motion picture industry, movie piracy, and how to capture screens in foreign markets. Read More

Unilever—A Case Study

As one of the oldest and largest foreign multinationals doing business in the U.S., the history of Unilever's investment in the United States offers a unique opportunity to understand the significant problems encountered by foreign firms. Harvard Business School professor Geoffrey Jones has done extensive research on Unilever, based on full access to restricted corporate records. This recent article from Business History Review is the first publication resulting from that research. Read More

Read All About It! Newspapers Lose Web War

Newspapers saw a threat to their livelihood from the Internet, and aggressively put their own competing products online. Problem is, says Harvard Business School professor Clark Gilbert, they didn't take advantage of the power of disruptive technology. Read More

Linking the Globe: The Role of Media and Communications

The media industry today is at its most critical juncture since an earlier rush of new technologies made mass media possible. Top executives from three global media firms—Bertelsmann, Vivendi and Reuters—joined HBS Professor Debora Spar in Berlin for a look at the industry at the crossroads of the Information Revolution. Read More

Cable TV: From Community Antennas to Wired Cities

The cable television industry has long outgrown its roots as a source of better TV reception to achieve its present place as a key player in the emerging telecommunications infrastructure. That change, writes HBS Professor Thomas R. Eisenmann in Business History Review, amid different managerial respondes to the twin—and sometimes competing—objectives of stabilty and growth. In this excerpt, Eisenmann looks at the formative years of the industry, from 1948 to 1975. Read More