Final Exam

1. Where is the production risk higher - in opera or in film? Why?

I believe that producing opera shows may be riskier than producing movies for several reasons.
First of all, opera productions have become larger, more physical, more multi-level, more technical,
and more expensive. Due to all these factors, opera production has becoming increasingly risky.
Moreover, operas mobilize a very high number of stakeholders (public, artists, public or private
funders, operating staff, public authorities ...) that must all be satisfied.

The most important risk inherent to opera production is probably the one related to the
management of resources and accidents. If some artists get sick or injured and can no longer perform
on stage, it can become extremely difficult to replace them because of the very short time frames
(opera performances are performed live, unlike films) and also because the artists have very rare and
specific skills and cannot be replaced by just anyone.
In addition, the risk of accidents on stage during performances or rehearsals is much more difficult to
manage than for films, again because operas are performed live

Another very important risk is related to the public's opinion of the performance. Operas are
institutions that rely heavily on the loyalty of their patrons. Since shows are very expensive to
produce, unfilled houses quickly translate into negative profits and revenue shortfalls for the opera.
The risk that the show will not appeal to the public is therefore also a huge risk for opera houses.
Especially since the opera audience sometimes has a very particular profile – big fans of classical art
pieces – if the show is a little innovative and off the beaten track, it may be shunned by the
traditionalist audience.

2. Give an example of risk-management practices from any of the readings.

The example I chose to mention is the one of the Edmonton Orchestra.

Before the reorganizations, the main issues for the Edmonton Orchestra were the funding and heavy
reliance on ticket revenues but also that the budget split was more in favor of the management and
less for musicians. The main risk was to create a feeling of frustration among the musicians, who
could feel that their work was not recognized at its true value, frustration that could be translated
into a high churn rate in the organization.
However, the orchestra has been able to carry out long-term transformations that have led the
organization to greater sustainability, in particular by improving the representation of artists on the
management board. The musicians increasingly started to feel part of the organization and were
taken care of in the process. This probably led to more loyalty and low churn rate in the organization.

We can also mention the the Sadler’s Wells case. Some measures were implemented to manage and
mitigate the risks, such as the ‘Sadler’s Wells Sampled’ that allowed the organization to better
identify the preferences and expectations of its audience and the scheduling weekly meetings, that
were a way to mitigate, reduce and prevent the risks.
 3. Define “democratization” in the creative industries. Where has
“democratization” progressed further: in the art market or in art museums?

Democratization in the art industry means making art accessible to as many people as possible. For a
long time, art was defined as an intellectual and sensitive practice reserved only to the upper class
and aristocracy. But the situation has evolved, artists began inserting themselves into pop-culture
and mass media formats for disseminating information and accessing wider audiences, beginning to
revolutionize the idea of the art inserted in the everyday life.

This phenomenon can sometimes offend the sensibilities of "art purists". This was the case, for
example, when the Museum of Fine Arts in Boston began to organize more "popular" exhibitions in
order to attract a wider audience, which is not used to coming to the Museum (in the image of the
exhibition “Speed, Style, and Beauty: Cars from the Ralph Lauren Collection” who has caused fury
with some art traditionalists). Some people see it as vulgarization of art, but it may prove to be very
useful because these people who were not used to coming to the museum will perhaps become
familiar with other works/collections of the museum than those initially planned, and realize that
finally the visit of museum is not exclusively dedicated to an intellectual elite.

The democratization of art has been supported by the expansion of digital use in the industry and
also means greater diversity and representation of women and racial minorities.

In my opinion, the art market is democratizing faster than museums. First of all because museums
are extremely dependent financially on their public and their donors and have to maintain their
regular audience, that is sometimes very conservative, at the cost of a lack of innovation and
diversity. On the other hand, the art market is by definition a global market that reaches a much
wider audience thanks to digital channels. Internet’s democratic access maximizes the number of
potential buyers, whose ownership desire over the masterpieces raises considerably their price tag.
The expanded competition among buyers, the multitude of offers and the vastly increased speed of
the art market illustrate the democratization phenomenon.

4. Drawing on the Louis Vuitton case, please explain how art is related to the
“paradox of luxury” (p.1).

Yves Carcelle, businessman and former member of the executive committee of the LVMH group,
defined the ‘paradox of luxury’ as follows: « How can you grow year after year, and give the
satisfaction to many more customers, in many more countries, and at the same time keep this sort of
exclusivity of luxury? And managing this paradox is one of the keys for permanent success because
you cannot take the risk to dilute your image or dilute your service”.

The case of the brand Louis Vuitton illustrates perfectly the relationship between art and the
'paradox of luxury'. Indeed, just like traditional art, luxury products are all the more valued as they
are rare and convey a symbolic of social stratification and hierarchical organization. Scarcity and
social symbolism are in fact interdependent since luxury goods reflect rank in society due to their
rarity, highlighting their customers' uniqueness.
Traditionally, luxury's scarcity has been linked to the artisanal aspect of the product, extremely high
prices, limited supply, and a very selective distribution network. However, the rarity aspect has been
reviewed and combined with other, subtler factors such as art. For this reason, many luxury brands,
particularly Louis Vuitton, have systematically and significantly strengthened their ties with art and
artists in recent years.
LV has indeed long-term collaborations with artists such as Stephen Sprouse, who designed a limited-
edition line of graffiti bags, the Japanese artist Takashi Murakami, who created the Monogram
Multicolore line or the American artist Richard Prince, who created a smudged monogram line.
The aim of these collaborations is to re-introduce exclusivity, inspiring consumers by using art as a
distinguishing feature since art remains widely associated with a set of social and cultural codes.
Products associated with art are perceived as more luxurious and evoke connotations of
sophistication, culture and prestige. This could be defined as ‘art infusion” 1, i.e., the influence of the
artistic presence on consumer perceptions.

Luxury maisons therefore rely on the idea that the presence of art will evoke associations of
exclusivity and will increase the positive perception of the maison among its audience. This is also the
reason why LV tried to build a sustainable positioning on art and culture by building the Louis Vuitton
Foundation, intended to promote artistic creation. Through this foundation, Louis Vuitton grants
itself a sustainable positioning on art and culture.

1
Hagtvedt H. & V. Patrick. Art Infusion: the influence of visual art on the perception and evaluation of
consumer products. Journal o Marketing Research, vol. 45, n°3, 379-389