Game changing business models in the creative industries: the case of reality TV

Abstract

Objectives

This paper critically explores the successful business models adopted in the televised entertainment, reality television (TV) sector. Specifically, we focus on three of the UK’s most successful reality talent shows – The Voice, X-Factor and Britain’s Got Talent (BGT). Our research question is threefold: what are the key components of these business models; how have they influenced success, and what lessons might be derived for other businesses within the sector?

Prior Work

The Creative Industries have been heralded as one of the world’s fastest growing industry sectors. As a sub-sector, reality TV is noted as being particularly innovative, adopting business models that increase viewing figures, enhance customer engagement and boost revenue generation through international franchises (Magder, 2004; Turner, 2006; Essany, 2013). Business models influence stakeholders’ perspectives about what a company does, identify how it adds value and determine how it generates revenues (Osterwalder & Pigneur, 2010; Andries & Debackere, 2013). Contemporary business model approaches include Blue Oceans strategy (Kim & Mauborgne, 2005), whereby a firm avoids using the competition as its benchmark; breaking the rules of the game (Markides, 2008), whereby newcomers to the market introduce new value to their chosen industry; and experimentation, where a firm tests new approaches and analyses what it has learned (Thomke, 2002). The latter approach encourages cumulative learning from a set of “failures” before choosing the best business model for the firm (Chesbrough, 2010).

Approach

We adopt a qualitative case study approach to empirically deconstruct the business models employed by The Voice, X-Factor and BGT. Data were gathered from web material, industry reports, press releases and other relevant sources, and augmented empirically with in-depth interviews and on-set observations.

Results & Implications

Findings reveal a high level of business model innovation within the reality TV sector, as evidenced by carefully crafted professional networks, strategic sharing of industry experience, and frequent movement of ‘expertise’ between production teams. The business models adopted by the Voice, X-Factor and BGT are characterised by an open innovation approach that embraces existing expertise, strategically engaging across the full spectrum of stakeholders.

Value

This paper contributes to theory-building within CI scholarship by enhancing understanding of business model development. Findings should be of value to businesses operating within the reality talent TV sub-sector of the Creative Industries.