High Concept: An Empirical Analysis of Globalization and the Cultural Discount Effect on the American Motion Picture Industry

Abstract

Globalization is making its presence felt in the American motion picture production and distribution industries. With the increasing importance of the international box office, firms are scouring for content strategies that allow them to compete globally. Capturing global audiences is a complex undertaking due to worldwide cultural disparity and its unique effect on the valuation of cultural goods. This creates a “cultural discount effect” – the lower valuation of a cultural good due only to its foreignness. This has led to the proliferation of the “high concept” film – a big budget, highly visual, easily understood piece of content that can ostensibly “travel well”. This paper analyzes the “high concept” strategy and its implications for the organization of the industry and the global marketplace. The paper utilizes a unique multiple OLS approach, a specially constructed discount measurement, and Geert Hofstede’s cultural dimension measurements in accordance with past research. The key findings are: with comprehensive controls, there is a negative correlation between a country’s cultural difference from the United States and its average discount of an American motion picture; there exists a bundle of inputs at which a country’s cultural difference has no observable effect on their average discount; discounts have decreased over time for all countries and most intensely for countries most culturally different from the United States. The statistical results are compelling in their indication of a growing unity in global preferences for cultural goods. The results are further meaningful in their suggestions for specific industry organization and future strategies for both firms and policymakers.