Abstract
This chapter explores key issues in film financing from the perspective of organizational economics. It examines the contractual relationships between investors and producers and analyzes how these relationships affect the formation and implementation of a single film project strategy. I argue that contracting problems can arise as a “natural” part of the financing process and can harm the project strategy in two important ways: (1) Through an incomplete alignment of objectives, which may lead to the formation of ambiguous strategies and (2) through a weak governance structure with insufficient contractual safeguards for the strategy implementation, which may result in deviations from the agreed strategy. Based on an examination of these two problem areas, I suggest a contracting-dependent model that leads to four generic film project strategies and further discuss the performance implications for each of these. Finally, to demonstrate the likely effects in a Scandinavian context, I apply the model to a case study of the current Norwegian film support system.
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Notes
- 1.
Due to the multiplicative production function relationship found between inputs in film production, where every input must be present and do its job above some level of proficiency and in conformance with other inputs for a viable film to result (Caves, 2000).
- 2.
This approach to generic project strategies builds on the research of Artto et al. (2008), who use project independence and number of strong stakeholder organizations as distinguishing parameters.
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Gaustad, T. (2018). How Financing Shapes a Film Project: Applying Organizational Economics to a Case Study in Norway. In: Murschetz, P., Teichmann, R., Karmasin, M. (eds) Handbook of State Aid for Film. Media Business and Innovation. Springer, Cham. https://doi.org/10.1007/978-3-319-71716-6_8
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