Defining the Audiovisual Industry

This chapter defines the perimeter of the audiovisual industry based on theoretical approaches adopted in literature, as well as the regulatory one used by policy makers. The perimeter of the audiovisual industry will be defined also with reference to classifications based upon statistics and accounting needs. Implementing an empirical approach, the chapter defines the different audiovisual sectors based on the intersection of three variables: the nature of audiovisual products, production process and distribution dynamics. In accordance to these variables, it is possible to identify three macrosectors: television, cinema and web. For each sector, this chapter will explore the peculiarities of the main audiovisual products.


Introduction
A satisfactory analysis of the audiovisual industry requires defining the perimeter of the different audiovisual markets. Markets identification implies an in-depth knowledge of specific products circulating in those markets. With reference to the audiovisual industry, the definition of the typical product is more complex than it could be for other industries. Indeed, the approach cannot focus only on technical and commercial features. Besides a mere technical aspect, that is to say the definition of the product as a combination of sounds and images, it is worth considering the deep connection existing between audiovisual and cultural product. That is the reason why the audiovisual industry is considered as a subset of the cultural one.
This chapter defines the perimeter of the audiovisual industry based on theoretical approaches adopted in literature, as well as the regulatory one used by policy makers. The perimeter of the audiovisual industry will be defined also with reference to classifications based upon statistics and accounting needs. Implementing an empirical approach, the chapter defines audiovisual sectors based on the intersection of three variables: the nature of audiovisual products, production process and distribution dynamics. In accordance to these variables, it is possible to identify three macro-sectors: television, cinema and web. For each sector, this chapter will explore the peculiarities of the main audiovisual products.

The perimeter of the audiovisual industry Theoretical approach to cultural industry
All attempts to find a taxonomic definition for cultural industries have different roots, but they all share the same common need: the measurement of the actual value of cultural industry, as well as its impacts in economic and social terms 1 . This purpose can be achieved considering different perspectives (Table 3.1).
Traditionally, literature has always focused on the "intrinsic value" of culture and, therefore, on its ability to communicate moral and ideological messages, studying impacts in terms of aesthetic excellence and individual enjoyment -associated with the concept of beauty or moral DOI: 10.1057/9781137378477.0008 improvement and spiritual development -and, in general, in terms of social welfare 2 .
Another branch of the research has been investigating the "economic value" of culture. In this field, two approaches can be followed: the first one is focused on the "institutional value" of culture and analyses impacts associated to macroeconomic effects generated by cultural production; the second one is aimed at investigating the "micro-economic value", meant as people's preferences expressed by price or willingness to pay 3 .
Literature based upon the "institutional value" of culture has inspired the current definition of cultural industry, frequently used by governments and institutions while undertaking a cost-benefits analysis of public financial support to be granted to the cultural industry. The "micro-economic value" has been less explored by scholars and policy makers. This perspective is deeply connected to the economic value of cultural products, as well as to the cultural firm itself. The underestimation of this perspective has caused the current distance between cultural industries and financial markets: investments are inspired by expectations and measures of the risk-return factors inherent to the projects, as well as the rating of the company that benefits from the financing. Therefore, those analyses do not consider macroeconomic impacts, nor cultural or intrinsic value.
In this perspective, the philosophical discussion about culture is not relevant -though very interesting by the way -on the contrary, theories based upon economic value and focused on a mere empirical approach are crucial at this point of our study. It is then quite useful to anticipate that the inclusion of audiovisual within the cultural industry is mostly due to theories inspired by "institutional value", more than the "intrinsic value" of culture.

The perimeter of cultural industry
The need to measure the impact of cultural production, both in terms of social dimensions and economic nature, has persuaded academics to explore the taxonomic features of cultural sectors. Prior to every kind of analysis, it is necessary to identify those sectors and activities to include in the perimeter of cultural industry. Theories based on the economic value, in particular those connected to the "institutional value", do not exclude cultural aspects; however, they link the "intrinsic value" to the conception of creativity, including in the perimeter of cultural industry, both cultural and macroeconomic features. Consequently, a fundamental difference between the European and the American approach must be stressed: while the first one is focused on the creative industry, the second one concentrates on the creativity of single employees. The evolution of the interpretation guided both approaches to the achievement of an expanded vision of cultural industry's perimeter. According to the European approach, the perspective is based on the evidence that products fulfilling primary functions can contain elements of creativity. The American perspective is based upon the idea that creative professionals work also in other industrial sectors, not necessarily included in cultural industry. In both approaches, anyway, creativity is linked to the construct of intellectual property.
This overview is synthesized in the definition of creative industry provided by the UK Department of Culture Media and Sport (DCMS) in 1998: creative industries "have their origin in individual creativity, skill and talent and have a potential for wealth and job creation through the generation and exploitation of intellectual property". Whichever is the aspect we are focussing on, the importance of the industry, or the role of employees, the creativity rate of a product is defined -mainly -as the ability of the product itself to be the outcome and to represent the expression of the originality, talent and technique of its creator. This does not depend on the economic value; nonetheless, the economic exploitation of the product does not prevent the presence of a creative feature. The originality of this approach is based upon its ability to combine cultural and economic value. It is possible owing to the conception of creativity. Every product characterized by a creative feature, even with primary functions and having an economic value, can be considered as a cultural product; therefore, the productive sector it belongs to is the cultural one. This explains how, and why, along with sectors historically considered to DOI: 10.1057/9781137378477.0008 be cultural -such as the performing arts and visual arts -are now also included in the cultural industry sectors such as fashion or design.
According to this perspective, the 2006 KEA study 4 distinguishes between "cultural sectors" and "creative sectors". "Cultural sectors" are split into "core art fields" and "cultural industries". "Core art fields" are non-industrial sectors producing non-reproducible goods to be consumed on the spot; "cultural industries" include industrial sectors producing cultural products in order to achieve a mass reproduction. "Creative industries" include sectors producing non-cultural goods with creative input.
In 2010, also the European Commission, in the Green Paper on Culture 5 , followed an extensive approach: Cultural industries are those industries producing and distributing goods or services which at the time they are developed are considered to have a specific attribute, use or purpose which embodies or conveys cultural expressions, irrespective of the commercial value they may have. Besides the traditional arts sectors (performing arts, visual arts, cultural heritage -including the public sector), they include film, DVD and video, television and radio, video games, new media, music, books and press ... Creative industries are those industries which use culture as an input and have a cultural dimension, although their outputs are mainly functional. They include architecture and design, which integrate creative elements into wider processes, as well as subsectors such as graphic design, fashion design or advertising. At a more peripheral level, many other industries rely on content production for their own development and are therefore to some extent interdependent with CCIs. They include among others tourism and the new technologies sector.
It is the potential presence of creative aspects in planning and development stages that allows the inclusion of a specific sector in the creative industry. For traditional cultural sectors, the creative element is represented by originality and unicity, as well as by the absence of a primary instrumental function. For example, in a theatre the creative element is characterized by the originality and the unicity of the performance, which is not aimed at achieving any instrumental function. However, in a few sectors, products can be linked to basic functions but can include a creative element. The architectural project of an auditorium, for example, has a specific function: it has to create a space in which to listen to music and can be developed with or without an original creative element. A canvas can be used to paint a picture or to create a dress: the painting is the result of a creative element, since normally it is original and cannot be reproduced; the dress, normally, doesn't incorporate a creative element, since it can be reproduced in series with an industrial process. But if it is a tailored dress, it cannot be reproduced, because it is original, therefore acquiring an unusual creative element. This approach allows the inclusion in the cultural sector of those hybrid products, which can have an original, or a creative and unique, element. The theoretical weakness of this approach is caused by the circumstance that traditional cultural sectors can generate non-creative products. When a painting is the reproduction of another one -and therefore it can be reproducedthe creative element disappears, unless it can be identified in an original reproduction technique.
With reference to the outcomes of the KEA and European Commission studies, the UNESCO approach adds a further detail. In 2009 UNESCO, revising its framework of cultural statistics from 1986, suggested a broader definition of cultural industry 6 . The new classification considers not only cultural products and business products with cultural elements but also cross-sector products, linked to cultural ones. The main news concern: (a) the inclusion of the sector "design and creative services" among cultural sectors; and (b) the inclusion of cross-sector areas aimed at being functional for the production and the distribution of products in several cultural sectors (intangible cultural heritage -considered "merely cultural"archiving and preserving, education and training, equipment and support materials -considered "partially cultural"), represented by "activities that may have a cultural character, but their main component is not cultural".
In brief, the expanded and modern vision of cultural industry is based upon a paramount aspect: creativity. By merging different approaches, it is possible to build up a taxonomy of cultural industry that would be composed of three levels: strong culturality, hybrid culturality and a functional culturality (Table 3.2).
The strongly cultural sectors encompass those products acknowledged as traditional, characterized by an original creative element, as well as by their unicity and the absence of instrumental functions (such as performing arts, visual arts, cultural heritage, books and press, music, radio, film, television, DVD, video, video games and new media).
The hybrid-cultural sectors include two peculiar types of products and sectors: those that are usually characterized by instrumental functions, but that can also involve creative features, being almost impossible to reproduce (i.e., architecture, design, fashion and advertising). This sector can also encompass products linked to culture, since they are aimed at achieving recreation and entertainment functions (i.e., sport, recreation and tourism).
The third dimension is characterized by functionally cultural sectors, peculiar of products useful for the production and the distribution of cultural products. In this perspective, they are cross-sector products (defined as intangible cultural heritage, archiving and preserving, education and training, equipment and supporting materials).

The perimeter of the audiovisual industry
It is quite easy to notice how each classification can include the audiovisual sectors among cultural ones. However, due to the heterogeneity of audiovisual products, it is difficult to understand whether audiovisual sectors have to be enclosed in strongly cultural sectors or in hybrid ones. Indeed, audiovisual products can be related to creativity and intellectual property; meanwhile, they do not have any primary instrumental function. However, not all of them can be recognized as the result of an original creativity, or as characterized by unicity, and, therefore, not all of them can be considered cultural products. This creates a certain discrimination among audiovisual products. Often it concerns the type of products: a film, for example, is usually perceived as a creative product, while TV news is not. Furthermore, with reference to the audiovisual industry, the possibility to reproduce an audiovisual work does not exclude its creative nature: a film is an original creative product, even if it can be reproduced in a variety of copies and in many formats -for example DVDs -aimed at achieving a wider distribution of works. The serial nature of the production process, on the contrary, more than the possibility to reproduce the product, can damage the creative element of audiovisual works. In this perspective, a thousand-episode TV series can certainly suffer from a corruption of its creative aspects more than a single film work.
The need for a working definition of cultural sectors has persuaded policy makers to adopt a more pragmatic approach: the theoretical taxonomy of cultural sectors has been translated into a statistical definition, which also considers international accounting standards for industrial sectors.
The European Competitiveness Report by the European Commission can offer more insights about this topic 7 . Moreover, adopting the same approach of the aforementioned KEA study of 2006, as well as UNESCO study of 2009, it defines creative and cultural sectors, suggesting a definition of the perimeter of cultural industry in accordance to NACE classification 8 .
The European context assumes significance in the work of the European Statistical Systems (ESSnet-Culture), a network of several European Statistical Systems set up at Eurostat in 2009. The study has led to the publication of several guidelines for member States in order to support data collection on culture (ESSnet 2012). The ESSnet-Culture does not only provide a set of cultural domains, but suggests also a link between groups of activities and the NACE codes. The classification of cultural sectors is based upon ten main domains and the corresponding NACE classes and codes 9 (Table 3.3).
NACE section N and P are transversal to all domains, while each single domain includes activities encompassed in one or another of the  residual NACE codes. It is evident that the audiovisual sector appears to be equally rich, showing activities comprised in different NACE codes. More specifically, the audiovisual sectors are composed of ten sub-sectors identifying different activities and corresponding to specific NACE sections and codes (Table 3.4). The EU Audiovisual Media Services Directive is largely consistent with the ESSnet classification 10 . With reference to an audiovisual media service, The Directive states that "the principal purpose [...] is the provision of programmes, in order to inform, entertain or educate, to the general public" where programmes stands for "a set of moving images with or without sound constituting an individual item within a schedule or a catalogue established by a media service provider and the form and content of which are comparable to the form and content of television broadcasting". Therefore, the Directive regulatory framework concerns products containing moving images, regardless of the content and the aim of the product -information, education, entertainment, commercial communication, advertising. The EU approach is largely consistent with the ESSnet and NACE classification: music, radio and other types of artistic creation are excluded, defining a perimeter of interest roughly corresponding to NACE section J. Besides, the fact that the EU Directive is mainly aimed at regulating TV broadcasters' activities does not imply that similar products produced, provided and broadcasted by actors other than TV firms do not belong to the cluster of audiovisual products, as in the case of films for theatrical release or web products released by new media players.
Combining the theoretical approaches present in literature with the working definition based upon accounting and statistical classifications, as well as the existing regulatory framework, it is finally possible to state that the audiovisual industry is represented by those industrial sectors characterized by products containing moving images. The nature of the producer, the scope and feature of the products, as well as the way products can be broadcasted and distributed, identifies different audiovisual markets/sectors, each one with its specific regulations, or even non-regulated, as for new emerging ones.
Taking as perspective the distribution model, it is possible to categorize three main audiovisual markets: TV, cinema and web market (Table 3.5).
The methodological approach followed in this text is consistent with this last classification.

The audiovisual products
Based on the distribution model, it is possible to identify TV products, film works and products intended for web distribution. It is worth clarifying that this difference is less relevant than it previously was. Indeed, the evolution of the market has encouraged the distribution of hybrid products. The context of the modern audiovisual market does not facilitate the identification of the primary distribution channel for each product. There is a growing trend to produce, for a single product, a variety of specific adaptations -i.e. remakes, sequels, prequels and spin-offs -for different types of distribution markets. Furthermore, the market is experiencing hybrid products which, since the first creative moment, are designed in order to be placed on different distribution platforms, without requiring any special adaptations. Moreover, new media players -mainly the Over the Top 11 -are starting to produce their own original products, including TV shows and films, that are released via web. The taxonomy hereby presented should also be analysed considering its "work in progress" nature. The possibility to recognize a specific distribution model for every product has to be considered within a perspective based upon convergence and integration.

TV products
If an audiovisual product is designed in order to be exclusively or primarily broadcast, it can be defined as a TV product. According to this approach, it is easy to understand that TV broadcasters do not only schedule TV programmes. This is even more evident if we consider all film works televised after their screening period. TV products, in a general conception, can be imagined as a cluster of audiovisual products that the public can watch on a TV platform, hence being a complex construct. To simplify, it is possible to identify two types of TV products: non-fictional audiovisual works and fiction products (Figure 3.1). The first cluster is destined to be exclusively shown on TV, while the second can be watched also in other contexts; therefore, television may not be the priority market of exploitation. Fiction products include programmes with a narrative structure and can be created using TV techniques (TV cameras), or cinematographic ones (film cameras).
In particular, fiction products can be divided based on the following points: Single episode products : include films and TV movies. The first ones are intended to be screened in cinemas, and can be televised only after the theatrical release. TV movies can only be watched on TV. Serial products , composed of a series of episodes, which have a continuous narration and stable characters; serial products are always designed to be shown on TV. There are many types of serial products: telefilms and situation comedies (sit-coms), in which characters are stable, but each episode has a different plot; drama, soap operas and telenovelas, with constant narration and stable characters.
Non fictional programmes include different categories, such as news, entertainment, sport and culture programmes, as well as communication and advertising. Those programmes can be broadcasted live or recorded, while fiction products are always recorded.

Cinema products
Film works are primarily intended to have a theatrical release and are normally sorted by duration or content. Based on the duration in minutes, they can be defined as feature or short films. They can also be defined as fiction products or documentaries depending on the presence of specific narrative elements (Figure 3.2).
Fiction products for cinema can be also sorted by genre, that is, by type of content and narrative style. There are many taxonomies for the genres, with different levels of detail. Table 3.6 shows a classification commonly received in USA, in line with the main international classifications.
Often, genre typologies also imply specific subsectors for each genre identified, and they can reach specific descriptive levels. It is interesting to point out that documentaries are considered as a specific type of product, which can also identify a specific editorial genre.
Of course, genre classification, created and used mainly to categorize film works, can be extended to fiction TV products.  The traditional difference between fiction TV products and film works is not explained based on genre, but on the different types of narration styles, duration or the tools used for the shootings: film cameras for films, TV cameras for TV products. However, currently, the differences linked to the type of cameras used are less relevant, due to an increase in the use of digital TV cameras also for film shootings. Simultaneously, differences among narrative styles appear to decrease, while duration differences are still relevant.

Web audiovisual products
The web is becoming one of the most powerful distribution tools for audiovisual products. Yet to be completely regulated, the on-line distribution mechanism allows young independent filmmakers to widely spread their works freely to the public. Also due to the mentioned features, products designed for an exclusive or a primary distribution on the web have exponentially increased during the last years. Normally, they are low-budget products, filmed with TV cameras and with poor financial resources. Recently, the most successful media players -mainly the OTT -have entered the market producing their own products 12 . OTT have experienced a great success in offering SVoD services to their customers and have seen their revenues grow over the years; this has enabled them to dispose of a large amount of resources to devote to production. Having their own content allows OTT to be independent of traditional broadcasters, and in particular of the Pay TV which in Europe are the largest holders of the rights of exploitation of films. Unlike young filmmakers, OTT can produce high-budget web products that, in the near future, will coexist and compete with those low-budget products.
Regardless of budget, audiovisual web products, typically, have a short duration, often, but not always, few number of episodes. The creative freedom of the web has encouraged the increase in the number of product types, many of them not to be categorized based on traditional standards. The advantageous use of a categorization is based upon a first difference between fiction and non-fictional products (Figure 3.3).
Web products, such as fiction works, cannot be sorted by genre, in particular not by cinematographic traditional genres. On the contrary, they can be categorized based on their specific format: therefore, web series represent the main innovative element. Web series have a very short duration -30 seconds to 25 minutes -with an average duration of 7 minutes per episode. Web series are now very popular; in particular, they are followed both by young and adult people, due to their creative spontaneity, as well as an easy way to access the contents, because of the short duration 13 . Since web platforms assure a viral diffusion of the series, they foster users to share their emotional experience with other unknown users, or members of specific communities. Among web series, comedy sketches, comedy stories, drama, horror, fiction, fantasy, mockumentaries, as well as documentaries and musicals are the most common genres.
Due to their peculiarities and for the immediate feedback possible to get from the public, nowadays web series are beginning to have a certain relevance for traditional TV and film production companies, especially for their talent scout activity. This explains why many festivals dedicated to web series have been springing up in recent years, while film festivals are beginning to include special sessions for these products 14 .
The capability to assure great levels of viral circulation to successful products, has encouraged the development of two types of peculiar web products: those using web as a marketing and promotion tool, and those based upon social features of web products, quite similar to many typical TV formats.
With reference to the first type, it is possible to identify three kinds of specific fiction products: viral videos, branded web series and fashion films. The first type is a non-serial product, with a very short durationusually a few seconds or a few moments, a narrative content aimed at sensitizing people on social, custom, environmental or economic topics, or at promoting brands or products. Branded web series are serial products with a narrative feature, focussed on the circulation of a specific brand, as well as the style of a particular company. Fashion films are nonserial products, created with the specific purpose of promoting popular brands, and do not necessarily have to include a narrative element.
With reference to the second type, other kinds of products, similar to non-fictional TV programmes, can be included. In particular, web realities and web talks are very popular. Peculiar of web products are also many audiovisual works that can be include in a specific cluster half-way between education and entertainment: those products known as "tutorials", vlogs and still life videos. The first videos are aimed at teaching specific activities, the second ones correspond to a video version of blogs -in this case protagonists are defined and known as "YouTubers". Still life videos are moving pictures related to specific topics with a variety of contents and an almost completely emotional message.