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Collaboration and Business Models in the Creative Industry. Exploring heterogeneous collaborations.

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  • CollaborationandBusinessModels intheCreativeIndustry Exploringheterogeneouscollaborations Commissioner: IIPCreate Authors: RemcoKossen PetervandePoel IsabelleReymen Date: March2010
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  • PREFACE This report is the result of the IIP Create project "Collaboration and business models in the creative industry". Collaboration and business models are one of the key themes of the Strategic Research AgendaofIIPCreate.IIPCreateisoneoftheInnovationplatformsofICTRegie,stressingtheimportance of the creative sector. The report describes a) important and relevant literature, b) important stakeholders,andc)bestpracticesandproblemsoncollaborationandbusinessmodelsinthecreative industry. The aim of this report is to inform and convince policy makers, knowledge institutes and practice of the importance of the topic and indicate areas for further research in the near future. It shouldprovidethebasisinformationforaproposalandconsortiumonthetopic. Based onarequestfrom IIPCreate,IsabelleReymenfrom Eindhoven Universityof Technology (TU/e) and Catholijn Jonker from TUDelft wrote a project proposal in Spring 2009, which was accorded by IIPCreate in August 2009. It was one of the Ways of Working (WoW) Projects, coordinated by Anne Nigten. The project was performed from September 2009 till March 2010 by two master students of TU/e,RemcoKossenandPetervandePoel,undersupervisionofIsabelleReymen. dr.ir.arch.IsabelleisAssistantProfessorDesignProcessesattheEindhovenUniversityof Technology(TU/e)andworkingintheInnovation,TechnologyEntrepreneurship,andMarketing Group(ITEM)oftheDepartmentofIndustrialEngineeringandInnovationSciences.The researchconductedintheITEMgrouprelatestotheareasofNewProductDevelopment,and EntrepreneurshipandCommercializationofNewTechnology.Educationismainlyprovidedin theprograms"InnovationManagement"(Master)and"TechnischeBedrijfskunde"(Bachelor). EntrepreneurshiprelatededucationactivitiestakeplaceintheBrabantCenterof Entrepreneurship,acollaborationbetweentheUniversityofTilburgandtheTU/e. B.Sc.PetervandePoelfinishedhisBachelorIndustrialEngineeringandisenrolledinthe OperationsManagementandLogisticmasteratTU/e.Heplanstograduatethissummer. B.Eng.RemcoKossenfinishedhisbachelorMechanicalEngineeringandisenrolledinthe InnovationManagementmaster.Heplanstograduatethissummer. Weespeciallyliketothankpeoplewhomadethisstudypossible.Firstofall,weliketothankCatholijn Jonkerforhersupportinwritingtheproposal.AlsoveryimportantwasAnneNigtenforrepresentingthe WoWprojectsonahigherlevelinIIPcreate.WeliketothankGeleijnMeijer(directorofIIPCreate)and PatriciaHeukensfeldtJansenandFritsGrotenhuisworkingforIIPCreatefortheirsupportofourproject, alsofinancially,andforarrangingallcontractrelatedaspects.Contentrelatedexpertiseinthefieldof collaboration and business models was obtained from the TU/e Department of Industrial Engineering andInnovationSciences,groupofInnovation,TechnologyentrepreneurshipandMarketing(www.item eindhoven.nl).EspeciallyHansBerendsandKseniaPodoynitsynaprovidedconstructivefeedbackduring theproject. CollaborationandBusinessModelsintheCreativeIndustry Page3of47
  • TABLEOFCONTENTS Preface..................................................................................................................................................... 3 Summary.................................................................................................................................................. 5 1 Introduction ..................................................................................................................................... 7 2 ResearchApproach .......................................................................................................................... 8 2.1 OverallApproach .................................................................................................................... 8 2.2 IdentificationofImportantStakeholders ................................................................................ 8 2.3 IdentificationofBestpracticesandProblems ......................................................................... 8 2.3.1 DataCollection ................................................................................................................... 8 2.3.2 CaseSelection..................................................................................................................... 8 2.3.3 DataAnalysis ...................................................................................................................... 9 2.4 LiteratureReview.................................................................................................................... 9 3 LiteratureReview ........................................................................................................................... 10 3.1 Introduction.......................................................................................................................... 10 3.2 TheCreativeIndustry............................................................................................................ 10 3.3 Collaboration ........................................................................................................................ 12 3.4 BusinessModels ................................................................................................................... 13 3.4.1 WhatisabusinessModel? ............................................................................................... 13 3.4.2 FrameworksofBusinessModels....................................................................................... 13 3.4.3 TypeofBusinessModels .................................................................................................. 16 3.5 CollaborationandBusinessModels ...................................................................................... 17 3.5.1 OpenBusinessModels:InsideoutandOutsidein........................................................ 17 3.5.2 Codevelopmentpartnerships .......................................................................................... 19 3.6 Conclusion ............................................................................................................................ 19 4 ImportantStakeholders.................................................................................................................. 20 4.1 StakeholdersInterviewed ..................................................................................................... 20 4.2 OtherStakeholdersintheCreativeIndustry ......................................................................... 22 4.3 Conclusion ............................................................................................................................ 23 5 BestPracticesandProblems .......................................................................................................... 24 5.1 CollaborationintheCreativeIndustry .................................................................................. 24 5.1.1 Theimportanceofhavinganetwork ................................................................................ 24 5.1.2 Formalizationandcontracts&IP ...................................................................................... 24 5.1.3 Communication&trust .................................................................................................... 26 5.1.4 HeterogeneityinSizeandDiscipline ................................................................................. 26 5.2 BusinessmodelsintheCreativeIndustry.............................................................................. 28 5.3 CollaborativeBusinessModels.............................................................................................. 30 5.4 Conclusion ............................................................................................................................ 32 6 Conclusions .................................................................................................................................... 33 7 References ..................................................................................................................................... 35 8 Interviewnotes .............................................................................................................................. 36 9 Appendices..................................................................................................................................... 37 9.1 InterviewProtocolentrepreneur .......................................................................................... 37 9.2 InterviewProtocolinformationbrokers ............................................................................. 39 9.3 BusinessModels ................................................................................................................... 41 CollaborationandBusinessModelsintheCreativeIndustry Page4of47
  • SUMMARY This report is the result of the IIP Create project "Collaboration and business models in the creative industry". Collaboration and business models are one of the key themes of the Strategic Research Agenda of IIP Create. The report describes a) important and relevant literature, b) important stakeholders,andc)bestpracticesandproblemsoncollaborationandbusinessmodelsinthecreative industry. The aim of this report is to inform and convince policy makers, knowledge institutes and practice of the importance of the topic and indicate areas for further research in the near future. It shouldprovidethebasisinformationforaproposalandconsortiumonthetopic. Collaboration in the creative industry is indeed very important. There are several reasons for collaborations betweenpartnersinthecreativeindustry.Forexample,creativebusinesses(ZZP,start ups, SME,) often lack resources to leverage their creativity into successful products whereas other (larger) companies often lack creativity and speed to exploit their IP. Based on our study, we see heterogeneous collaborations in the creative industry as collaborations a) between different type of partners:e.g.ZZP,SME,startupsversuse.g.largecorporations,knowledgeinstitutes,culturalinstitutes, b) between partners from different disciplines (different Beta disciplines like mechanical engineering, electrical engineering etc., but also alfa and gamma disciplines), and c) with different positions in the valuechain/ondifferenttopics,e.g.conceptdevelopment,marketingandcustomerinvolvement,supply chain,etc.. Importantproblemsrecognizedincollaborationsinthecreativeindustryarea)economicvaluationof creative/cultural value is difficult since this value is to a great extent intangible, which often rises problemswiththeprotectionofIPorintheattractionofmoney;b)differencesincultureandapproach between partners (e.g. formality, hierarchy, scale). Since the creative industry employs approximately 30%oftheDutchemployees,thecollaborationproblemsarenotincidentalbutstructural;mostofthe intervieweesstatethatitisdifficult. Important enablers for collaborations in the creative industry seem to be subsidies (like Point One), developmentenvironments(likeFablab),networks(likesocialnetworks),andcommunicationandtrust (versus formalization, contracts and IP). Practitioners invented numerous ways (best practices) to overcome typical problems with heterogeneous collaboration. Many entrepreneurs are involved in (large)networksandusestrongandweaktiesrelationships.Theserelationshipsenablethemtoattract moneyandraisefunds,get(free)juridicaladvice,and/orstartnewcooperations.Manyofthemstate thatcommunicationandtrustareessentialinmaintainingthesenetworks.Furthermore,entrepreneurs showagreatamountofcreativityincreatingbusinessmodels.Someofferadiversifiedproduct/service portfoliotoextentthenumberofpossibleincomechannels.Othersareinvolvedinnumeroussubsidy programs.Someevencreateuniquedistributionchannels. Twodominanttypeofbusinessmodelscouldbeidentifiedinthecreativeindustry,namelycreators,in whichproductsarecreatedandsoldtobuyers(physicalaswellasintangibleassetsarebeingsold)and brokers,facilitatingsalesbymatchingpotentialbuyersandsellers,ofmainlyintangibleassets(basedon the framework of Malone, 2006). Some other business model related aspects we found are: every model is unique; alignment of the partners' business models is essential in fruitful collaboration; and open innovation (insideout and outsidein) stimulates collaborations and enables new ways of doing business.Despitethelargeamountofprofessionalattentiontobusinessmodels,academicliteratureon business models is scarce. We could identify several frameworks of business models and types of business models. But insight on the design and development of business models for (heterogeneous) collaboration is limited, let alone specific to the creative industry. Empirical research based on some good(andbad)practicesmayhelptocreateinsightinthedevelopmentofeffectivebusinessmodels CollaborationandBusinessModelsintheCreativeIndustry Page5of47
  • andcreateguidelinestodesignbusinessmodelsusefulinthecreativeindustry.Soalthoughsomebest practice exist, more research towards effective business models for collaboration in the creative industryisneeded.Itshouldenhancebothscientistsandpractitionerstofullyexploittheopportunities inthecreativeindustry. Also guidelines and support is needed to face the many challenges when setting up heterogeneous collaborations.Thishasnotbeencoveredwidelyintheliterature,andalsoinpractice,littleisknown. Many of the interviewees acknowledged that most collaborations are designed by their gut feelings. Insight in the development and guidelines for the design of business models for different type of (heterogeneous)collaborationsisdefinitelymissing.Inordertocreateusefulguidelines,manydifferent streams in the literature need to be synthesized, like literature on partnerships, interorganizational collaboration and open innovation, and applied to the creative industry. For research purposes, selectingaspecificareainthecreativeindustryistherebyneeded,e.g.themusicindustry. Somespecificquestionsforfurtherresearchonbusinessmodelsforheterogeneouscollaborationsare Howtocreateandappropriatevalue withbusinessmodelsthatcombinedifferenttypesofvalue,notonlyeconomicvalue,butalso immaterialvalue(likeculturalvalue,socialvalue,knowledgevalue,idealistic(e.g. sustainability)value)? withabusinessmodelthatisbothinnovativeandstillacceptedintheindustry?(What determinesabusinessmodelsuccess,tobeaccepted?) with(notused)IPoflargerorganizations(PhilipsResearch,TNO,etc.),basedoncollaboration betweenlargerorganizationsandSME/creativeZZPinawinwinsituation?(ideaofbigplayer, makebusinesswithsmallplayer)(valorisation) basedoncollaborationbetweencreativeZZP/SMEandlargerorganizationsinawinwin situation?(ideaofsmallplayer,scaleupwithlargeplayer) ininterfacebetweenbigplayersandusers/ZZP/SME?(e.g.platformdevelopmentbetween professionalcontentprovidersandusers)? Howtosupportvaluecreationandappropriation ininterorganizationalbusinessmodels?(Businessmodelsthatdonotbelongtoone organization,buttothevaluechain;nexttothebusinessmodelsofpartnerorganizations.) EindhovenUniversityofTechnologyisinterestedinstudyingthesequestionsinthecreativeindustryand welcomes collaborations with enthusiastic partners. We would like to combine knowledge creation according to academic standards, with developing guidelines that can be used for improving value creationandappropriationinthecreativeindustry. CollaborationandBusinessModelsintheCreativeIndustry Page6of47
  • 1 INTRODUCTION The creative industry is an important (Dutch) industry. Approximately 30% of the Dutch workforce is employedinthisarea(SRA,2009).Theriseofthisnewsectoroverthelastyearshasledtoasignificant amount of opportunities for the economy and its entrepreneurs. However, the different nature and innovativenessofthisindustrygaverisetoanumberofnewanddifficultchallenges(SRA,2009).Asa result of these challenges, there is a demand for support in creating (new) business models and for guidelinesforcollaborationbetweentheinvolvedparties. Specific for the creative industry are heterogeneous collaborations. The creative industry is characterized by many Small & Medium sized enterprises (SMEs) and Freelancers or "Zelfstandige ZonderPersoneel"(ZZP)1.Theylackresourcestoleveragetheircreativitytobringsuccessfulproductsto the (global) market. Bigger companies and multinationals do have the possibilities to bring creative productstothemarket,howeveroftenlackcreativityandentrepreneurialspirit.Collaborationbetween these heterogeneous parties could therefore create interesting opportunities for both parties. Other heterogeneous collaborations can be established with cultural institutions, knowledge institutes etc. Supportingtheorganizationofthese processesofcollaborationbetweenheterogeneous partnersand the creation and appropriation of value for all stakeholders in these collaborations is of crucial importanceforthesector.Uptillnowitishoweverunclearhowtodosoeffectivelyandefficiently. Theaimofthisstudyistoidentifyrelevantstakeholders,literature,andbestpracticesandproblemson collaboration and business models in the creative sector. The scope of the study is defined as: Collaboration and business models between heterogeneous partners within the creative industry2. The creative industry is welldelineated to ICT related creative industry. Only the Dutch situation is lookedat.Thestudyshouldbeseenasafirststepincreatinginsightandsupportforbusinessmodels andcollaborationsinthecreativeindustry. First, academic literature regarding business models and collaboration is reviewed and analyzed, and describedinChapter3ofthisreport.Secondly,importantstakeholdersregardingbusinessmodelsand collaborationintheDutchcreativeindustryhavebeenlistedinChapter4;theirbackgroundrangefrom entrepreneur of a new venture, to consultant on business models and subsidy coordinator within a multinational. Finally, best practices and problems regarding (heterogeneous) collaborations and businessmodelsinthecreativeindustryhavebeenanalyzedandarereportedinChapter5,basedon interviews with creative SMEs and Freelancers, cultural institutions, multinationals, consultancy, and researchers.Thereportstartsinthenextchapterwithadiscussionoftheresearchapproachandends withaconclusionsummarizingthemainfindingsanddiscussionofthedirectionsforfutureresearch. 1 ZZPisatypicalDutchtermforanentrepreneurwithouthavingpersonnel.Itisoftenonepersonwho offersproductsorservicesandthereforesendsabilltohiscustomers.(www.wikipedia.nl) 2 Samenwerkingenbusinessmodellentussenheterogenepartnersindecreatieveindustrie CollaborationandBusinessModelsintheCreativeIndustry Page7of47
  • 2 RESEARCHAPPROACH 2.1 OVERALLAPPROACH The main goal of this study is to identify relevant stakeholders, literature, and best practices and problems on collaboration and business models in the creative sector. For each sub goal, the methodology to obtain it is described. In general, the research follows a design science approach (RommeandEndenburg,2006),aimingtolinkresearchwithpracticeandbeingfocusedoncontributing simultaneouslytobothscientificknowledgeasknowledgeusefulinpractice. 2.2 IDENTIFICATIONOFIMPORTANTSTAKEHOLDERS At the start of the project, several names and links were provided by IIP Create and Anne Nigten, coordinator of the Ways of Working projects, as a starting point to look for important stakeholders. These were extended by desk research and the "snowballprinciple", by askinginterviewees for other interesting or important stakeholders. It was looked at stakeholders in knowledge institutes, consultancy,largercompanies,SMEandculturalinstitutions.Therearetwoimportantlimitationstothis method: (1) actors who are not connected by any of our sample will not be located; and (2) it highly dependsonthepredefinedlisttocatchallmajorplayers,withoutisolatingsubsetofactorswithinthe creative ICT industry. In total 30 have been identified. This list is far from complete, but is at least representativeofthediversityinthesector.Thelistshouldbeextendedinadynamicwayinthefuture, tocapturerecentdevelopments. 2.3 IDENTIFICATIONOFBESTPRACTICESANDPROBLEMS 2.3.1 DATACOLLECTION Toidentifybestpracticesandproblemsoncollaborationandbusinessmodelsinthecreativeindustry, anexplorativequalitativeresearchapproachwasfollowed,bestsuitingthelimitedknowledgeavailable yet.Interviews were themain source of data.Furthermore, publicly available information on internet wasused. Fortheinterviews,afocused(i.e.semistructured)interviewprotocolwasusedtocollectdataregarding thedifficultiesandbestpracticesofcollaborationbetweenheterogeneouspartnersandtheirbusiness models. A different set of questions was used for interviewing entrepreneurs (interview protocol in Section 8.1, in Dutch) and for knowledge brokers (in Section 8.2). The former focuses on the practice andproblemstheentrepreneurs(startups,SME's,largercorporations)experience;andasksforother examplesandimportantstakeholdersinthesector.Thelatterfocusesontheproblems,challengesand trends seen by knowledge institutes regarding collaboration and business models in the creative industry, their knowledge of good and bad practices and also on links to other stakeholders and important knowledge. In some interviews with entrepreneurs, some questions about their business model were added. As a frame of reference, the Business Model Canvas from Osterwalder & Pigneur (2009)wasused;itisdiscussedinmoredetailintheliteraturechapter. 2.3.2 CASESELECTION Based on the identification of important stakeholders (see Section 2.2), a subset. was made for interviewing.Intotal16interviewswereheld.Eachinterviewstillbroughtnewinsights;saturationwas thus not yet reached, but resource limitations forced to stop here. Table 1 classifies the interviewees intothefollowingcategories:sizeoforganization(innumberofemployeesorSmall/Medium/Large/ ExtraLarge),Functionofinterviewee,expertiseofinterviewee,artifactsproducedbytheorganization andtheextenttowhichacompanyissubsidized.Theexpertiseoftheintervieweehasthreecategories: CollaborationandBusinessModelsintheCreativeIndustry Page8of47
  • Entrepreneurialexpertise(expertiseoftheintervieweeinstartingandrunningnewbusinesses),Creative expertise (involvement and knowledge of the interviewee in the creative industry) and Business Model/Collaborationexpertise(expertiseoftheintervieweewhenitcomestothecreationofbusiness modelsinacollaborativesetting).Theartifactsproducedbytheorganizationareknowledge,services,or physicalproducts. Name Size Function Expertiseof Artifactsproducedby Subsidized Interviewee Interviewee organization E. C BM/ Knowledge Services Products Col TheExperience S Cofounder / 0 + + 60% 40% 0% 0 Economy Director YvonneKirkels, L Ph.D. + 100% 0% 0% + researcher SeriousToys 3 Cofounder / 0 0 + 0% 0% 100% Director Waleli 4 Founder / + + + 0% 60% 40% Director CCF 1 Director + + 0% 50% 50% + Verkeersgame 2 Cofounder 0 0 0% 0% 100% 0 NYOYN 6 Founder + 0 + 0% 0% 100% DeWaagSociety 57 Manager + + % % % + Mediagilde 2+ Director 0 + + 0% 100% 0% + CapGemini L Consultant + 0% 100% 0% PointOne M Manager + 0% 100% 0% + Prof.Grefen, L Professor + 100% 0% 0% + researcher AliceinEindhoven 1 Director + 0 0% 100% 0% + TNO XXL Consultant + + 33% 33% 33% 0 Patchingzone M Founder/ + + 0 30% 70% 0% + Director TABLE1:OVERVIEWANDCLASSIFICATIONOFINTERVIEWEES 2.3.3 DATAANALYSIS Thedataoftheinterviewswascombinedandstructuredandinductivelycodedintomainthemes(e.g. useofnetwork,importanceofIP,communication,trust,businessmodel).Afterwardstheresultswere comparedtotheliterature. 2.4 LITERATUREREVIEW Scientific literature was searched for the topics (heterogeneous) collaboration and business models. Most important and most relevant papers were cited. This overview is in no sense complete, but is, accordingtous,arelevantrepresentationofimportantliterature.Mostly,generalliteraturewasfound, notspecificforthecreativeindustry.Forinformationonthecreativeindustry,mainly(SRA,2009)was used. CollaborationandBusinessModelsintheCreativeIndustry Page9of47
  • 3 LITERATUREREVIEW 3.1 INTRODUCTION This chapter shows the results of a literature review which aims to describe the specific factors and elements that relate to (heterogeneous) collaborations and business models in the creative industry. Althoughthisreviewdoesnotpretendtobeexhaustive,itaimstocoverasmanyrelevantaspectsas possible.Notethatthegoalhasbeentoincludeasmanyrelevantaspectsaspossible,nottodescribeall characteristicsintheutmostdetail. The reviews start with the definition and characterization of the creative industry (Section 3.1). The subsequentsectionprovidesabriefoverviewofspecificelementsthatrelatetocollaboration(section 3.2).Section3.3issolelydevotedtothedefinitionanduseofbusinessmodels;specialattentionisgiven tothebusinessmodelofOsterwalderandPigneur(OsterwalderandPigneur,2009).Section3.4focuses ontheinterrelationbetweencollaborationandbusinessmodels.Thefinalsection(Section3.5)provides aconclusion. 3.2 THECREATIVEINDUSTRY Thecreativeindustryisanimportant(Dutch)risingindustry.Thisriseismainlycausedbytheincreased production flexibility (largely due to the increased IT technologies) and the growing reflexivity in consumption (SRA, 2009). This reflexivity in consumption implies that customers buy products that engage their personal identity. Apple users, GStar wearers, or 2nd hand shop customers all identify themselveswiththeimageandstatusofthebrand.Or,toputitdifferently:(the)creativelifestyles(of customers)willaffectprivateandcommunitylife,workstylesandcitizenship(SRA,2009,p.10).Asa result, creativity is an important input into all sectors where design and content form the basis of competitiveadvantageinglobaleconomicsmarkets(Flew,2002). The Creative Industries Task Force Mapping Document was one of the first documents that distinguishedanddefinedthecreativeindustry(Smith,2001).Itdefinedcreativeindustriesasactivities whichhavetheirorigininindividualcreativity,skillandtalentandwhichhavethepotentialforwealth andjobcreationthroughgenerationandexploitationofintellectualproperty.Besidesthisoftencited definition(seee.g.(Cunningham,2002,Flew,2002)thecreativeindustryisalsodefinedasfollows(the creativeindustry)containsallwhoarecreatinginrelativeautonomy,operateinasocialnetwork,livea localecosystemanddelivertheirgoodswheretheycanontheworld(IIPCreate,2010).Thisallinthe precedingdefinitionisoftenreferredtoasthecreatingclass.Thisclassischaracterizedbymembers thatbehavesimilarandwhocanbeseenasautonomous.Theyoptimizeexperienceandexpectation, and strive towards total acceptance of invisible technology in ambient intelligent environments (IIPCreate,2010;SRA,2009,p.10). The creative industry is defined by the ICTInnovatie Platform as including gaming, social software, Artificial intelligence, disclosure cultural and personal heritage, new media, wearables and ambient technology.Thisstudyusesanadaptedversionofthisdefinition. In this study, the creative industry is defined as including gaming, disclosure cultural and personal heritage,newmedia,wearablesandambienttechnology.Inthisstudy,specificattentionispaidtoICT relatedcompanies. CollaborationandBusinessModelsintheCreativeIndustry Page10of47
  • ImportantChallengesintheCreativeSector FIGURE1:IMPORTANTCHALLENGESINTHECREATIVESECTOR Thecreativeindustrydiffersfromthesocalledculturalindustry.Cunninghammentionthatitdiffersat leastontwofactors(Cunningham,2002,p.7).First,contentcreationwillbecomemoreimportantthan it is in the current content industries. Distribution, not production, is where most profitmaking currently occurs. Second, the creative industries will be characterized increasingly by their being inputs into other (service, but also manufacturing and even primary) industries. As a result of these (andmore)differences,theindustryfacesseveralchallengesofwhichsomeareintroducedbelow. Gapbetweenideagenerationandproduction.Thefirstchallengesthecreativeindustryisfacing,is relatedtotheexistenceofagapbetweenideagenerationandproduction.Despitethenumerousideas generated,theeconomicexploitationisoftenlimited(SRA,2009,p.6).Thisismainlycausedbythefact thatengineersanddesignerscannotfindeachotherandduetheexistenceofbrokenlinksinthe knowledgechain(SRA,2009,p.22). Lackofcreativityversuslackofresources.Smallcompaniesoftenlackresourcestoleveragetheir creativityintosuccessfulproducts.Largercompaniesontheorderhandoftenlackthecreativityand speedtoexploittheirIP.Asaresult,smallerandlargerbusinessesneedcooperatetogethertocreate anddevelopproducts.Thiscocreationhoweverisoftenhinderedduetothelargedifferencesbetween thecooperatingcompanies. Valuingcreativity?Athirdchallengecanbefoundinthechangingnatureofthevaluesystem.Insteadof tangibleassets,intangibleassets(R&D,creativity,andpeople)increasinglyrepresentcompanysvalue. Buthowdo,forexample,investorsvaluesuchthingsasresearchanddevelopment;intellectualcapital; organizationalcapital(e.g.,businessstrategiesandnetworks);reputationalcapital(brandrecognition); andinformationtechnology?(Tepper,2002,p.165).Buiguisetal.(2000,p.42)statethat(although) wewanttoquantifythiscapital(...)onagenerallyunderstoodformatthisambitionis,however,(often) frustratedbythemultidimensionalityofintangibleknowledgecapital(). Protectionofcreativity.Anotherproblemisrelatedtotheprotectionofcreativity.Buiguisetal.(2000,p. 48)distinguishes4stagesofcontrolofproperty.Theyarguethatintangiblesarethemostabstractof the 4 stages implying that they are the most hard to control and hence to protect. As a result, cooperatingcompaniesstartingexchangingintangiblesarequiteprudentandoftenuselarge,detailed contracts to protect their own intangibles (often IP). Furthermore, they depend heavily on the legal system. CollaborationandBusinessModelsintheCreativeIndustry Page11of47
  • Attracting money. Most businesses in the creative industry face difficulties in attracting traditional moneyviabankloans.Asaresult,theyneedtoattractventurecapitalnotonlytogrowtheirbusiness buteventostartthem(Bilton,2007,p.120). Asaresultofallthesechallenges,itisnotsurprisinglythatTeppermentionsunquestionably,manyof theoldgoverningassumptionsabouteconomiclifearechanging(2002,p.166).Asaresult,traditional (IP)cooperationandbusinessmodelscannolongerbeappliedandbecomeoutdated.Notsurprisingly, Tepperstatesonthesamepagethatperhaps(the)mostcrucialistheneedtolinkourresearchandour strategiesformeasuringthecreativeindustriestorealistic,tangible,andpracticalpolicygoals.The remainderofthisliteraturereviewisthereforedevotedtothesearchforthesenewresearchesand strategieseitherinthecreativeindustryorincollaborations. 3.3 COLLABORATION CollaborationiswelldefinedbyAnderson(1995,p.58)asastrategicmodeofintegrationinwhichtwo ormoreorganizationscooperateonpartsorallstagesofproduction,fromtheinitialphaseofresearch tomarketinganddistribution.Collaborativeagreementscanbeshorttermorlongtermandencompass a spectrum of cooperation that lies between outright merger/ acquisition and armslength market transaction. Therationalebehindcollaborationscanvary.Amongothers,DeMan(2004)mentionsgettingaccessto market, increasing efficiency, getting access to new competencies, and the sharing of R&D risks as potential drivers for collaboration. Arku (2002) identified the reasons for collaborations while accounting for the size of the company. He showed that one of the largest reasons for smaller companies to collaborate is to get access to technological knowhow or to specialized skills. Main reasons for larger companies seems to be to penetrate new geographical markets or to product markets. FIGURE2:MOTIVATIONFORCOLLABORATION Ifpeoplestarttocooperate,whetheritisintraorinterorganizational,theyneedtoadapttothenew situation and get training to understand the cooperating partner. Crossfunctional training can help themtobecomeawareoftheirownstandardsandcultureandthatoftheothers.Notsurprisingly,an extantbodyofliteratureisdevotedtothetopicofteamcomposition,crossfunctionaltraining,cultural diversity. In this study, collaboration between heterogeneous partners is defined as collaboration between organizationsofdifferentsizes;e.g.multinationals(Philips)versusZZPorMediumandSmallBusinesses (NYOYN, Serious Toys) and of different kind, e.g. startups with knowledge or cultural institutes. The focusisonheterogeneouspartnersinthecreativeindustry. CollaborationandBusinessModelsintheCreativeIndustry Page12of47
  • 3.4 BUSINESSMODELS 3.4.1 WHATISABUSINESSMODEL? Business model is a frequent used and misused term in literature and todays business. There are however, many different definitions in literature. Here are some examples of what different authors thinkisabusinessmodel; Abusinessmodeldescribestherationaleofhowanorganizationcreates,deliversandcaptures value.(Osterwalder,2009) Aconciserepresentationofhowaninterrelatedsetofdecisionvariablesintheareasofventure strategy,architecture,andeconomicsareaddressedtocreatesustainablecompetitive advantageindefinedmarkets.(Morrisetal.,2005) Abusinessmodelisanabstractrepresentationofsomeaspectofafirmsstrategy;itoutlines theessentialdetailsoneneedstoknowtounderstandhowafirmcansuccessfullydelivervalue toitscustomers.(Magretta,2002) Thebusinessmodelprovidesacoherentframeworkthattakestechnologicalcharacteristicsand potentialsasinputs,andconvertsthemthroughcustomersandmarketsintoeconomic outputs.(ChesbroughandRosenbloom,2002) Wedefineabusinessmodelasarepresentationofafirmsunderlyingcorelogicandstrategic choicesforcreatingandcapturingvaluewithinavaluenetwork.(Shaferetal.,2005) Whatwecanlearnfromthesedifferentdefinitionsisthatbusinessmodelsperformtwoimportant functions;(1)theycreatevalue;(2)theydelivervaluetoacustomer;and(3)theycapturethevalueand turnitintoeconomicoutput. In this study, a business model is defined as a set of assumptions about how a firm creates and appropriatesvalueforallitsstakeholders(DorfandByers,2005). 3.4.2 FRAMEWORKSOFBUSINESSMODELS Inliteraturemanyauthorshavedefinedabusinessmodelframeworkwhereintheyarguetocaptureall theaspectsofabusinessmodel.Therearemanydifferentframeworkswhichvaryslightlyinstructure and attributes. A framework very often used is the one of Morris et al. (2005) and Osterwalder and Pigneur(2009).Thissectionwilldiscussbothframeworks 3.4.2.1 F RAMEWORKOF M ORRIS Todevelopausefulframework,itmustbereasonablesimple,logical,measurable,comprehensiveand operationallymeaningful.Thereforetheauthorsproposedaframeworkwhichconsistsofthreespecific levelsofdecisionmaking;(1)thefoundationlevel;(2)proprietarylevel;and(3)Ruleslevel.Theselevels represent the different managerial purposes of the model. The foundation level addresses basic decisionsthatallentrepreneursmustmake(e.g.howtocreatevalue?Forwhomtocreatevalue?).The proprietary level purpose is to enable development of unique combinations among decision variables thatshouldresult inmarketplace advantage. This level makes it possibleto customize the framework and focus on how value is being created within the 6 decision variables, which will be discussed hereafter. The rule level, enables the framework to be useful, and delineates guiding principles governingexecutionofdecisionsmadeatleveloneandto.(Morrisetal.,2005) Morris(2005)specified6differentfactors,whichcanbeappliedonthe3levelsdiscussedabove.They differentiatebetween; 1. Factorsrelatedtooffering(howdoyoucreatevalue?) 2. Marketfactors(whomyoucreatevaluefor?) CollaborationandBusinessModelsintheCreativeIndustry Page13of47
  • 3. Internalcapabilityfactors(whatisyoursourceofcompetence?) 4. Competitivestrategyfactors(howdoyoucompetitivelypositionyourself?) 5. Economicfactors(howdoyoumakemoney?) 6. Growth/exitfactors(whatisyourtime,scopeandsizeambitions) The business model, thus results in a matrix with 18 different sections, wherein a unique business conceptcanbedevelopedordescribed.ThelatterisdoneforSouthwestAirlines,asillustratedinFigure 3.Thishopefullygivessomeinsightsinhowthismethodworks. FIGURE3:CHARACTERIZINGTHEBUSINESSMODELOFSOUTHWESTAIRLINES(MORRISETAL.,2005) 3.4.2.2 B USINESS C ANVASBY O STERWALDER Another recent developed framework by Osterwalder and Pigneur (2009) is applied very often in practicebecauseitisplainandsimple.Theirsocalledbusinessmodelcanvas(Figure4)allowstoeasily describe and manipulate business models. It consists out of nine basic building blocks that show the logicofhowacompanyintendstomakemoney.TheBusinesscanvasandtheninebuildingblocksare illustratedanddiscussedbelow. CollaborationandBusinessModelsintheCreativeIndustry Page14of47
  • FIGURE4BUSINESSMODELCANVAS(OSTERWALDER&PIGNEUR,2009) 1. Customer Segments (CS): An organization serves one or several customer segments. It can serve a massmarketwhichisoftenthecaseintheconsumerelectronicmarket.Itcanhoweveralsoserveniche marketswhicharemostlikelytobefoundinanintensivesupplierbuyerrelationshipasisthecaseinthe carindustry.MoretypesofcustomersegmentationcanbedistinguishedlikeSegmented,Diversifiedand Multisidedplatformscustomersegments. 2. Value Propositions (VP): A business seeks to solve customer problems and satisfy customer needs with value propositions. Value proposition can for example focus on the newness of the product, its performances, the associated risk reduction,or its customization.Furthermore, they can either be quantitativeorqualitative. 3.Channels(CH):Valuepropositionsaredeliveredtocustomersthroughcommunications,distribution, and sales channels. They involve different phases like the creation of product awareness or the convincement ofcustomerstoactually buytheproduct.Channels can eitherbedirectorindirectand eitherbeanownedchannelorapartnerchannel. 4. Revenue Streams (RS): Revenue streams result from value propositions successfully offered to customers.Thesecancomefromdirectassetsale,usagefees,licensing,brokeragefeesoradvertising. Furthermost,pricingcanbedifferentdependingonthetypeofrevenuestream.Pricingcanbedynamic (i.e. prices change based on market conditions) such as auctions realtime market, yield management andnegotiation.Pricescanalsobefixed(i.e.predefinedpricesarebasedonstaticvariables)suchaslist price,productfeaturedependent,customersegmentdependentandvolumedependentpricing. 5. Key Resources (KR): Key resources are the assets required to offer and deliver the previously describedelements.Thesecanbephysical,intellectual,human,andfinancial. CollaborationandBusinessModelsintheCreativeIndustry Page15of47
  • 6.Key Activitities (KA): describes the most important things a company must do to make its business model work. Mostly key activities are categorized as follows: production, problem solving (i.e. new solutionsforindividualcustomers)andplatform/network(e.g.Ebay,MicrosoftandVisacreditcard) 7. Key partnership (KP): This aspect describes the network of suppliers and partners that make the buisnessmodelwork.Companiesforgepartnershipsformanyreasonsandpartnershipsarebecominga cornerstoneofmanybusinessmodels.Overalltherearethreemotivationsforcreatingpartnerships:(1) optimization and economy of scale, which is the most basic form of a partnership and is designed to optimize the allocation of resources and activities; (2) Reduction of risk and uncertainty is another motivationtopartnerwithothercompanies;and(3)fewcompaniesownalltheresourcestoperform theactivities,sotheypartnertogetacquisitionofparticularresourcesandactivities. Osterwalder(2009)furthermoredistinguishesfourtypesofpartnerships:Strategicalliciances(between non competitors), Coopetition (strategic partnership between competitors), Joint Ventures and Buyer supplierrelationship. 8.Coststructure(C$):thisdescribesallcostsincurredtooperateabusinessmodel.Lowcostsstructures are more importantto some business models than to others.Therefore, you can distinguish between twobroadcostsstructures:Costdrivenandvaluedriven.Manycompanies,howeverfallsomewherein between. 9:Customerrelationship(CR):Customerrelationshipsareestablishedandmaintainedforeachspecific segment.Theserelationshipsmaydifferwidely;itcanbearelationshipthatcanbedefinedaspersonal assistance,cocreationorselfserviceforexample. 3.4.3 TYPEOFBUSINESSMODELS Someliteraturetriedtoinvestigatethetypesofbusinessmodelsthereare.Oneexampleistheresearch ofMaloneetal.(2006).Theydifferentiatetwodimensionsofwhatabusinessdoes.Thefirstdimension isaboutwhattypesofrightsarebeingsold?whichgiveriseto4basicbusinessmodels; (1) thecreatorbuysrawmaterialorcomponentsfromsuppliersandtransformsor assemblesthemtocreateaproductsoldtobuyers; (2) ThedistributerBuysaproductandresellsessentiallythesameproducttosomeone else; (3) ThelandlordSellstherighttouse,butnotown,anassetforaspecifiedperiodof time; (4) TheBrokerFacilitatessalesbymatchingpotentialbuyersandsellers.(Maloneetal., 2006) TheSeconddimensionsisaboutwhatkindofassetisinvolved?Whichalsogivesriseto4other dimensions:(1)FinancialAssets;(2)PhysicalAssets;(3)IntangibleAssets;and(4)HumanAssets.This resultsinatotalofSixteenBusinessmodelsArchetypesasillustratedinTable2. CollaborationandBusinessModelsintheCreativeIndustry Page16of47
  • Financial Physical Intangible Human 3 Creator Entrepreneur Manufacturer Inventor HumanCreator (KleinerPerkins) (GM) (LucentBellLabs Distributor FinancialTrader Wholesaler/Retailer IPTrader HumanDistributor4 (MerrilLynch) (wallMart) (NTLInc.) Landlord FinancialLandlord PhysicalLandlord Intellectual Contractor Landlord (Citygroup) (Hertz) (Accenture) (Microsoft) Broker FinancialBroker PhysicalBroker IPBroker HRBroker (CharlesSchwab) (eBay) (Valassis) (EDS) TABLE2:BASICBUSINESSMODELARCHETYPES(MALONEETAL.2006) 3.5 COLLABORATIONANDBUSINESSMODELS Moreinformationonbusinessmodelsfor(heterogeneous)collaborationscanbefoundintheliterature of open innovation and open business models, and codevelopment partnerships. Codevelopment partnershipsareusedmoreandmoretoimproveinnovationeffectiveness(ChesbroughandSchwartz, 2007).Forthiswayofworking,innovativebusinessmodelsareinneed,whichembodymutualworking relationshipsbetweentwoormoreparties,andwhichcanpromoteinnovationeffectiveness.Notethat thisliteratureismainlyfocusedontheviewpointoflargecorporations,andnotfromtheviewpointof theSMEorZZP. 3.5.1 OPENBUSINESSMODELS:INSIDEOUTANDOUTSIDEIN OpenBusinessModelsarederivedfromanarticlewrittenbyChesbrough(2003)whointroducedOpen Innovation.Traditionalbusinessmodelscenteraroundtheideaofdevelopingproductsaroundinternal technologies.However,byusingexternalparties,R&Dexpensescanbereduced,innovationoutputcan be increased, and partnering can open up new markets that may otherwise have been in accessible. Open Business Models can be used by companies to create and capture values by systematically collaborationwithoutsidepartners.Thismayhappenfromtheoutsideinbyexploitingexternalideas within the firm, or from the insideout by providing external parties with ideas or assets lying idle withinthefirm(OsterwalderandPigneur,2009). An Open Innovation environment, companiescommercializesits own innovation and ideas, as wellas innovationandideasfromotherfirms.Boundariesbetweenacompanyanditsenvironmentareporous, enablinginnovationstomoveeasilyinsideout(i.e.fromthefirmtoitsenvironment)ortheotherway around fromoutside in. Outsidein innovation occurs when firmsbring, external ideas, innovations, technology,orIPinsidetheboundariesofthefirm,andwiththehelpoftheseexternalities,applythisin newproductsorservices.Sincecompaniesfocusontheircorecompetence,theseoutsideinprocesses are increasingly happening in industry. Insideout innovation occurs when firms license or sell their ideas,innovation,technology,orIP.Licensingmodels,jointventures,andspinoffsaremostusedwithin theseOpenBusinessModels. 3 These models are illegal in the US and most places today because they involve selling human beings. They are includedhereforlogicalcompleteness. CollaborationandBusinessModelsintheCreativeIndustry Page17of47
  • FIGURE5OPENINNOVATION(CHESBROUGH,2003) Forourstudy,heterogeneouscollaborationsbetweensmallandbigfirmsareveryinteresting,howdo their business models look, or should like? There are two generic patterns; the previous discussed outsidein and insideout Business Models with typical characteristics (Osterwalder and Pigneur, 2009)(Table3) TABLE3DIFFERENCEBETWEENOUTSIDEINANDINSIDEOUTBUSINESSMODELS(OSTERWALDER&PIGNEUR,2009) OutsideInPattern InsideOutpattern Key Partners: External Organizations, sometimes from Value Propositions: Some R&D outputs that are completely different industries, may be able to offer unusable internally for strategic or operational valuable insights, knowledge, patents, or readymade reasonsmaybeofhighvaluetoorganizationsinother productstointernalR&Dgroups industries Key Assets: Building on external knowledge requires Keyassets:OrganizationswithsubstantialinternalR&D dedicated activities that connect external entities with possessmuchunutilizedknowledge,technology,andIP. internalbusinessprocessesandR&Dgroups Due to sharp focus on core businesses, some of these otherwise valuable intellectual assets sit idle. Such businessesaregoodcandidatesforaninsideoutopen businessmodel. KeyResources: Takingadvantageofoutsideinnovation RevenueStreams:Byenablingotherstoexploitunused requiresspecificresourcestobuildgatewaystoexternal internalideas,acompanyaddseasyadditionalrevenue networks streams. Costs:Itcostsmoneytoacquireinnovationfromoutside sources, But by building on externallycreated knowledge and advanced research programs, a company can shorten timetomarket and increase its internalR&Dproductivity Channels: Established companies with strong brands, strong Distribution Channels, and strong Customer Relationships are well suited to an Outsidein open business model. They can leverage existing Customer Relationships by building on outside sources of innovation CollaborationandBusinessModelsintheCreativeIndustry Page18of47
  • 3.5.2 CODEVELOPMENTPARTNERSHIPS Collaborationscanhaveseriouspositiveeffectsbutcanalsobringserioushazards.Chesbrough(2007) identifiedfouressentialsaspectswhichaffectthesuccessfulnessofacodevelopmentpartnership; 1. Objectivesofthepartnership 2. Assesthecapabilitiesyourequire 3. Businessmodelalignment 4. Futurecollaborations Themostusedobjectiveswhichdrivespartnershipsare:increaseprofitability,shortentimetomarket, enhance innovation capability, create greater flexibility in R&D and expansion of market access. Each objective involves different implication for codevelopment (cocreation) and partner selection. And therefore,itisdifficulttogeneralizebusinessmodels,becauseeachpartnershipisdifferent. Anotheraspectisthetypeofcapabilityacompanysneeds.Needscanbeclassifiedbytheirimportance foracompany.ChesbroughandSchwartz(2007)classifiedthemintothreecategories:Core,criticaland contextual.Corecapabilitiesarevitaltoacompanysrunningbusiness.Partnershipsinthiscategoryare themostimportant,anditisimportanttomanagethese(mostlynonetoveryfew)partnersasbestas possible. Partnerships which affect critical capabilities are important, but not core to the overall business,howeveritmaybecoretotheotherpartner.Contextualcapabilitiesarenecessarybutnotof valueaddingforabusiness.Partnershipsinvolvingcreativityareasdiscussedbeforeoftenhardtovalue, andforthatreasonalsohardtoputthemintoacertaincategory. A source of many problems within collaborations can be the misalignment of the partners business model.AlignedBusinessModelsarecomplementary;ifyouexecuteyourmodelwell,yourpartnerwill benefit,andviceversa(ChesbroughandSchwartz,2007).Byassessingapartnersbusinessmodeland comparingittoyours,onecancreatealignmentanddevelopmorevaluablepartnerships(Chesbrough andSchwartz,2007). Last,bythinkingoffutureopportunitiesandnotonlythecurrentneedsyouenhancethesuccessfulness andefficiencyofcollaborations.AsJeffWeedman,VicePresidentofP&G,oncesaid:Theseconddeal takes1/2thetimeofthefirstdeal.Thethirddealtakes1/3thetime,andsoon.Andsubsequentdeals arenotonlyfaster,theytendtobemoreprofitable(Chesbroughetal.,2006) 3.6 CONCLUSION This chapter identified a number of challenges and characteristics of the creative industry. Among others, this industry is characterized by valuation difficulties and a lack of resources. These characteristicsgiverisetospecificchallengesforsmallcreativecompanies,forexamplewhenitcomes to IP protection and the attraction of money. One method to overcome these challenges is to create (structural)collaborationtieswithothercompaniessinceitcanleadtonewmarketandcompetencies access.Fortheseheterogeneouscollaborations,specificbusinessmodelsmightbeneeded. Despitethelargeamountofprofessionalattentiontobusinessmodels,academicliteratureonbusiness models is scarce. We could identify several frameworks of business models and types of business models. But insight on the design and development of business models for (heterogeneous) collaboration is limited, let alone specific to the creative industry. Empirical research may help to identify specific structures and patterns in the business models with heterogeneous collaboration. So althoughsomebestpracticeexist,moreresearchtowardseffectivebusinessmodelsforcollaborationin the creative industry is needed. It should enhance both scientist and practitioners to fully exploit the opportunitiesinthischallengingarea. CollaborationandBusinessModelsintheCreativeIndustry Page19of47
  • 4 IMPORTANTSTAKEHOLDERS One goal of this study was to identify important stakeholders in the field of business models and collaboration in the creative industry. This chapter describes the stakeholders and briefly discusses them. They range, from small to larger businesses and from commercial (profit) focused towards researchfocused organizations, as also depicted in Table 1.A selection ofthe important stakeholders hasbeeninterviewed. 4.1 STAKEHOLDERSINTERVIEWED Thestakeholderswhichhavebeeninterviewedaremappedtotheextenttheyaresubsidizedandtothe artifactstheyproduce(i.e.physicalproducts,servicesorknowledge),seeFigure6. Independent Serious Verkeersgame Toys CapGemini NYOYN CCF Experienceeconomy Waleli Mediagilde WaagSociety SanderLimonard(TNO) Patchingzone Subsidized Alice PaulGrefen Pointone Eindhoven Yvonne Kirkels Physicalproducts Services Knowledge FIGURE6MAPOFSTAKEHOLDERSINTERVIEWED For all the stakeholders who have been interviewed, a brief description is given below (listed in alphabeticalorder); AliceinEindhovenHanleBlancisdirectoroftheAliceinEindhoven,aplatformwhichaimstostimulate, representandpromotethecreativeindustryintheregion. CapGeminiBasvanOosterhoutworksatCapGeminiandoffersconsultancyservicestolistedcompany whenitcomestonewbusinessmodels. CreativeConversoinFactoryHansRobertusisdirectoroftheCCF.TheCCFaimstovalorizeunusedIP fromPhilipsto(starting)entrepreneurs,offeringallkindsofsupporttotheentrepreneurs.Itsdirectoris HansRobertus.,alsoinsearchtheseentrepreneurswhocanreceiveallkindofcoaching.Atthemoment CCFhas2projectsinthepipeline. De Waag Society Frank Kresin. This nonprofit company coragnization aims to develop creative technology for the creative industry. They develop concepts, pilots and prototypes for the market, half underownlabel,halfasasubcontractor. CollaborationandBusinessModelsintheCreativeIndustry Page20of47
  • Fontys / TU/e Yvonne Kirkels Ph.D. researcher. Her study focuses on the role and importance of knowledgebrokersinanetwork,inthecreativeindusrtry. Mediagilde Auke Ferweda. Mediagilde situated in Amsterdam is a new media incubator that coaches andfacilitatestartingentrepreneurs. NYOYN Bart van Gogh. Like Serious Toys, NYOYN develops interactive learning material for children. TheirmainproductSoundStepshasbeensoldseveraltimesanditisexpectedlargersalesvolumesare sold in the near future. Bart is an experienced business man. The IP in their products is licensed from Philips. PatchingzoneAnneNigten.PatchingzoneisatransdisciplinarylaboratoryforinnovationwhereMaster, doctor, postdoc students, and professionals from different backgrounds create meaningful contents. Anne Nigten applies the process patching approach as a main methodology for creative research and development. PointOneRonaldBegeer.PointoneisaninnovationprogramoriginatedbytheDutvhhigtechinduestry, knowledge institutions and the Ministry of Economic Affairs. It translates the worldwide developments fromnanoelectronics,embeddedsystemsandmechatronicsintosocialrelevantproblems. TNO Sander Limonard works at the research institute TNO at the Information and Communication TechnologyDepartment.Hismainresearchfocusesonnewbusinessmodelsinnewmediaventures. TU/e Paul Grefen In his book Mastering Ebusiness, IT enabled business models Prof. Paul Grefen of TU/eexplainsthedomain ofebusinessinawellstructured way,coveringthecompletespectrumfrom businessaspectstotechnologyaspects,includingattentionforbusinessmodels. SeriousToysWillemFontijniscofounderofSeriousToysandformeremployeeofPhilipsResearch.They operate in the elearning market focusing on interactive products for kids. They bought IP from Philips whichisthecoreoftheirmainproductTagTile. The Experience Economy Albert Boswijk. The goals of the Experience Economy are to become the leadingbodyofexpertiseinEuropeinthefieldandtoclosethegapbetweentheoreticalconceptsandan integrative body of knowledge. They aims to study, develop, and improve methodology for implementationofexperiencestrategiesandconcepts. VerkeersgameTogetherwithhiscompanion,OlivierVerstappenaimstobecomeacompetitiveplayerin the online training market of travel licenses by offering real life car simulation tools (and theory questions). WaleliSituatedinAmsterdam,WalelisfounderSyteHammingaaimstodevelopacommercialhitusing wirelesstechnology.Inabletofoundhismultipleprojectsheoffersuniquebrainstormservicesdirectedat creatingmultipleapplicationsfortheirIP. CollaborationandBusinessModelsintheCreativeIndustry Page21of47
  • 4.2 OTHERSTAKEHOLDERSINTHECREATIVEINDUSTRY Besidescompaniesandpersonswhohavebeeninterviewed,thereareotherinterestingstakeholdersas well.Otherstakeholderscanbeseparatedintotwoparts;(1)stakeholderswhoareinterestingbecause oftheirknowledgeaboutbusinessmodelsand/orknowledgeaboutheterogeneouscollaborations;(2) stakeholders who have experience on heterogeneous collaboration in practice. This list is far from complete,butshouldbeseenasafirstinventory,whichcanbeusedinfuturetosetupcollaboration. Name Knowledge Practice Description AndrewBullen X IIPCreateEUcoordinator(forEUprojects) ASMI X AMSItheAmsterdamCentreforServiceInnovation is focusing on research and education in "management of innovation in service firms and serviceorganizations" JeroenvanMastrigt X HKUreserachondesignmodelsforinterdisciplinary teams. KaiPattipilohy X Diversionaimstocreateusefuland creativeproducts for the society thereby focusing on social innovative products. EXER X EXER is a company specializing in leisure and cultural eventorganization LiesbethJansen X Directorofthewestergasfabrieklivinglabs Redesignme X Redesign is a cocreation platform enabling business tojoinforcesincreatingproducts. Shapeways X 3Dprintingcompanywhichallowsconsumerstoprint their own creative physic products. Because they createdacommunity,theyareabletodevelopcheap 3D printing solutions. This company is a spinoff by Philips. Vollekracht X Smalldesignfirm,withaninterestingbusinessmodel ICTKringDelft X X ICT Krings Delft aims to connect ICT knowledge and experiencesintheregio. MartijnKriens X X The idea of iCrowds is that by letting many people collaborate through social software it is possible to createexceptionalresults.Muchmorethantheresults ofjustabunchofindividualsworkingtogether. Novay (Telematica Instituut X X Novayconnectsbusinesses,knowledgeinstitutesand Twente) partners,andgovernmentalinstititutionstofosterICT innovations. Syntens X X Syntens is a network of advisors that assists businesses in their innovation processes. Remco BakkerofSyntensfocusesontheICTindustryandon thecreationofbusinessmodels. TABLE4:OVERVIEWOFSTAKEHOLDERS CollaborationandBusinessModelsintheCreativeIndustry Page22of47
  • 4.3 CONCLUSION Thelistofstakeholdersshowsalargevarietyofpersonsandorganizationsrelevantinonewayorthe othertothetopicofthisstudy.Furtherresearchshoulddefinitelyfocusonsomespecificsubsectoror type of collaboration in order to deliver useful guidelines to improve practice and create academic insight. CollaborationandBusinessModelsintheCreativeIndustry Page23of47
  • 5 BESTPRACTICESANDPROBLEMS From the interviews, best practices and common pitfalls have been identified and from some interviewees,insightintheirbusinessmodelwasobtained.Thefirstsectiondiscussesmostimportant issues on collaboration which are; (1) the importance of having a network; (2) problems related to formalization,contracts,&IP;(3)communicationandtrust;and(4)heterogeneityinsizeanddiscipline. The next section discusses business models used within the creative industry and will give case descriptions when appropriate. Subsequently, business models for (heterogeneous) collaboration are discussed.Thechapterendswithsomeconclusions. 5.1 COLLABORATIONINTHECREATIVEINDUSTRY 5.1.1 THEIMPORTANCEOFHAVINGANETWORK Manyoftheintervieweesmentionedtheimportanceofhavinganetwork.Anetworkallowsyoutotap intonewknowledge,anditcancreatebrokerageopportunitybylinkingpeople,firms,ortechnologiesto createnewproducts. Tapintodifferentknowledge/competences TU/eresearcherYvonneKirkelsmentionedtheimportanceoftappingintoknowledgebeyond yournetwork.Anetworkcangenerateinterestingopportunitiesviastrongandweakties.She definedstrongtiesasdirectfriendswhereasweaktiesaredefinedasconnectionsviaafriend ofafriend. AnexampleofaweaktierelationthatenabledabusinesstogrowcanbefoundatNYOYN.A good friend of the director Bart was well connected to a private investment network that providedNYOYNthenecessarymoneytostartitsbusiness.Walelihadtheopportunitytousea strong tie relation to fund its business. The person that funded his business believed in the entrepreneurialexperiencesofSieteHammingaandboughtbusinessshares. Createbrokerageopportunities Mediagilderecognizesthatlinkingpeopletootherpeopleenablesbusinessopportunities.They createbrokerageopportunitiesbyconnectingpeoplewithintheirnetworkandstrivetoarrange forfinancialsupportfor60%oftheirclients.Agroupthatbusinessesfindhardtoapproachis talented students with potential entrepreneurial skills. Mediagilde aims to close this gap by proactivelysearchfortalentedstudentsviathelaunchofbusinesscasesandcampusactivities. Yvonne Kirkels also mentions this gap by explaining the role of brokers in closing structural holes.Astructuralholeexistswhenbusinessesareinneedforcollaborationbutunabletofind eachother.Abrokercanbringthesebusinessestogetherandclosethehole.HanLeBlancof Alice Eindhoven indicated that development environments like Fablab are also very much stimulatingcollaborationsandsupportinginnovation. 5.1.2 FORMALIZATIONANDCONTRACTS&IP AlmostallintervieweesmentiontheIntellectualPropertychallengesinthecreativeindustry.Thisisnot surprising since IP is one of the most valuable assets of an organization and companies. However, protectingIPleadstovariousproblemsthatseemtobestrengthenedbythetypeofindustryandthe extenttowhichcreativecompaniescollaboratewithlargerorganizations. CollaborationandBusinessModelsintheCreativeIndustry Page24of47
  • Typeofindustry Mostcreativecompaniesmanufactureservicesorproductsofwhichthetechniqueishardto protect. This is according to Auke Ferwerda (Mediagilde) mainly because most creative companiesaretoalargeextendsoftwarebasedorusetechniquesthatcanbeusedbyanyone (like GPS or RFID). The main added value of creative companies can be found in the combinationoftechniquesorintheuniquenessoftheirapplications.Asaresult,companiestry to protect these combinations or applications but this isoften difficult. Furthermore, it takes considerabletimebeforeapatentisgranted.Asaconsequence,creativesoftwarecompanies oftenputmoreemphasisintobeingfirsttothemarket,thantosecuretheirIP. A good example of this IP securing versus time dilemma can be found in the area of Iphone application development. Almost all software companies are able to manufacture all existing Iphoneprograms. However, the value isnotsituatedin the programitself. Instead, the main valueiscreatedbythecompanythatbringstheproductsearliesttothemarket. Note that for creative companies of which the IP is mainly positioned in the hardware, like NYOYN or Serious Toys, IP protection is a much bigger issue than for software companies (Gogh,2009;Hietbrink,2009).These,andmorecharacteristicsofthisindustrywillbediscussed inmoredetailinoneofthenextsections. ExtraIPproblemsduetoheterogeneouscollaborations Due to the complexity of protecting (creative) IP, larger companies depend heavily on specialized lawyers. Philips, for example, has an internal Intellectual Property and Standards department employing more than 300 professionals worldwide. To put this into contrast, De Waag Societyhasone fulltime internal lawyer assisting in IP issues and contract formulation. Juridicaladvicecanhoweveralsobeattractedexternally.Mediagildepaidabout50.000euros tohaveasetofhighlydetailedcontractscoveringallrelevantIPissues. Typically these companies expect smaller companies to act at the same juridical level and specialismastheystarttocooperate.However,smallercompaniesandstartingentrepreneurs often lack people, time and money to face these complicated IP issues as noted by Bart van Gogh(NYOYN).Andalthoughinsomecaseslargerpartnercompaniesarewillingtosharetheir resourcesmostsmallcompaniesfailtorespondadequatelytothejuridicaldemandoflarger companies. A typical example of this problem is illustrated by NYOYN. NYOYN was one of the first companies starting to work with IP of Philips. Philips however approached NYOYN multiple times as if they were a big, established multinational company by sending them multiple contracts(30+pages).NYOYNinturnfailedtorespondadequatelytothesecontractssincethey did not have the time and knowledge to read and understand them in detail. As a result, NYOYNalmostdecidedtoquittheircooperationwithPhilipsandtonotuseitsIP. AlthoughbothPhilipsandNYOYNacknowledgethisproblemandstatethattheybothlearned their lessons, other companies also address this issue. Serious Toys owner Wilbert Hietbrink statedthatIPnegotiationsareoftenverytimeconsuming,andforcethemtoshifttheirfocus whichslowdowntheirproductmarketintroduction. CollaborationandBusinessModelsintheCreativeIndustry Page25of47
  • 5.1.3 COMMUNICATION&TRUST Therearemanyoperationalvariableswhichaffectasuccessfulcollaboration.Howeveronlyacoupleof thesehavebeenmentioned frequentlyin ourinterviewsofwhichGoodcommunicationandTrustthe most.Manyofourintervieweesacknowledgedtheseaspectsandgaveexamplesofitsimportancein successfulcollaborations. Goodcommunication AccordingtoWaleliandMediagilda,communicationisoneofthemostimportantingredientsin successfulcollaboration.Especiallyinthefirststageofthecollaborationwithexternalparties,it isofsignificantimportancetoidentifythemutualneedsandexpectations. SieteHammingaalsoemphasizedtheimportanceofclarity,honesty,realisticandopennessin communication.Therefore,Walelicommunicatesinthefirststagesofapartnershipaboutwhat toexpect,andforwhichprice.Thiswayofdoingbusinessleadstoclarityfurtherdownstream thesupplychain. Trust Trustisasecondandessentialingredientinanytruecollaboration.Trustbetweenpartnersis mostimportant,youcangaintrustbybeingrealistic,honestandclearallthetime.Hamminga gainedconfidencebyitsinvestorsbywinninganimportantentrepreneurialcompetitioninthe Netherlands,andduetohisrealisticviewofitsownbusiness. Trust can also be gained by proof of ability, which can be either be shaped by previous successfulexperiencesorbyacknowledgementsofthirdparties.VanGoghhasbeenaskedto be one of the leaders of NYOYN since he showed 15 year experiences in an international constructioncompany. Anotherwaytogaintrustistheacknowledgmentofyourworkbyathirdpartyasmentionedby Auke Ferwarde. When, for example, ideas or products have been promoted on sites like Engadget or Gizmodo, they have been acknowledged by important gadget gurus and already receivedmarketingattention. From this section it can be concluded that communication shapes the collaboration process. Good communicationinprestagesofacodevelopmentwillpayoffintheend.Furthermore,trustbetween companies is another essential ingredient intruecollaboration, and can be gained byproof of ability, andbybeingrealistic,honest,andclearalltimes. 5.1.4 HETEROGENEITYINSIZEANDDISCIPLINE Heterogeneity between firms is another important determinant in successful collaborations. Heterogeneitycan either bespecified by size(e.g.smallcompanies vs big companies) orbydiscipline (e.g.artisticvsCommercial).Thisparagraphwilladdressbothformsofheterogeneityandsupportsthem withexamplesoutofour16interviews. Smallvs.Big(trustvs.Legal) Manyintervieweesstresstheproblemswhichoccurwhilecollaboratingwithexternalparties. OneexamplehasalreadybeengivenwhichdescribedhowNYONgotoverloadedwithcontracts by the legal department ofPhilips. Becauseof the difference insize, Philips is able to have a specializeddepartmentwhichcanarrangealllegalissues.AcompanylikeNYON,whichconsists CollaborationandBusinessModelsintheCreativeIndustry Page26of47
  • outofonlyafewpeople,doesnothavethemoney,noraspecializedpersontoarrangesuch legalissues.VanGoghwhoreceivedthelegalreportwithmiscellaneousclauses,didnotagree with this way of working and did not sign the contract. He believes that Philips does not understandhowbigcompaniesshouldcooperatewithsmallercompanies.Animportantdriver forPhilipstoactlikethatistolockoutanyrisks.Theywanttosecuretheirinvestments,mostly by an upfront payment, and by securing their benefits when an IP will become successful. Becausesmallercompaniesdonothavetheselegalabilities,theironlysolutionistodriveon trustandsimplecontracts. Anotherexampleofdifferencesbetweensmallvs.bigisthecaseofHietbrinkandhiscompany Serious Toys, which is an spinout of Philips Research. Philips is mainly interested in products/IPswhichhaveapotentialmarketvaluebiggerthan10.000.000.ForSMEsthisisa huge market potential and most products/IP do not reach this limit, especially not in a few years.Therefore,problemscanoccurbecausesmallandbiggercompaniesmeasureonanother scaleandhavedifferentexpectations.BecausePhilipsdidnotseethemarketpotential,Serious ToysboughttheIPofPhilipstogetherwithinvestors.Thisisquiteordinarybecausenormally PhilipsneversellstheirownIP. Differencesinsmallandbigdonotonlyproduceproblemsbutcreateschancesaswell.Thisis an important driver for the existence of Waleli.Waleli excels in developing and championing projects within bigger firms, and act as broker to bring technologies to the market. The company is unable to put them in the market themselves, due to the lack of distribution channels which are difficult to manage and master. For this reason they need the bigger companies. Why these bigger companies cannot put their own technologies to the market is because they simply dont have the right structure and culture to do it as acknowledged by Hamminga and Boswijk. Also Boswijk acknowledges this issue, and recognizes the inability of largerfirmsincommercializingtheirownIP. Differenceindiscipline According to Frank Kresin from De Waag Society, successful innovations are most likely to happen on the intersection of two different disciplines. Especially when two totally different disciplines work together, you most likely can gain new insights (e.g. GPS and Pacemaker). However,whencollaboratingwithotherheterogeneouspartners,itisveryoftenthecasethat peoplespeakadifferentlanguagewhichcausesproblems.Creativepeoplethinkdifferentand act different than for example Business People. Besides the difficulties, there are clearcut advantages of heterogeneous collaborations, since added value is very complementary. Solutionstosolvethesedifficultiesarescarce,andverycasespecific. From this discussion, the following can be concluded. First, the size of the company matters and the difference in discipline matter. Heterogeneity can cause problems in collaboration but also creates chances, such as brokerage opportunities, or companies can find a very different but incredibly complementarypartnerwhichenhancescollaborationperformance. Since larger companies mostly cover a big part in the value chain (e.g. Philips develops, sells, and servicesmedicaldevices)theyareverypowerfulwhereassmallercompaniestypicallycoverasmallpart inthevaluechain(e.g.bydevelopingagoodidea).Hence,whenitcomestophysicalproducts,smaller companiesoftenneedlargercompaniestobringtheirproducttothemarket. CollaborationandBusinessModelsintheCreativeIndustry Page27of47
  • 5.2 BUSINESSMODELSINTHECREATIVEINDUSTRY The business models of most interviewees have been depicted in a business model framework (see Appendix8.3)withtheuseofthebusinessmodelcanvasofOsterwalder.Fromthesebusinessmodels, some specific remarks have been made with respect to business models in the creative industry of whichsomearediscussedbelow. CustomerSegments Osterwalderdistinguishesdifferentbuildingblocksinabusinessmodel.Oneoftheseblocksis called Customer Segments. Typically, an organization serves one or several customer segments like a mass or a niche market. A customer segment typically represents a specific typeofendconsumer.Aswillbediscussed,thecustomersegmentofaproductorservicehasa significantinfluenceonthebusinessmodel.Thisimpliesthatthemannerinwhichrevenuesis earnednotonlydependontheproductorservice,butalsoontheendconsumerasillustrated inthefollowingcase. TheCreativeConversionFactoryaimstovalorizePhilipsunutilizedIntellectualProperty.Atthis moment,oneofCCFsprojectsisrelatedtotheapplicationofintelligenceroutesinbuildings. These routes can assist individuals to find their way in complex buildings or large areas like hospitals or tradeshow. However, a typical hospital visitor is not willing to pay for this extra functionality whereas a typical businessman at a tradeshow will pay up to 20 euros for this functionality. As a result, the selling strategy and associated earnings differ due to the differenceinendconsumers. ChannelsversusStrategicPartners TwootherbuildingblocksinOsterwalderscanvasarecalledChannelsand StrategicPartner.Achannelisusedtoexposeandselltheproducttothe end consumer whereas a strategic partner is often used to increase the valueoftheproduct.Atypicalchannelcanbearetailstorethatsellsyour interactive child toy. An example of a strategic partner is a specialized company that produces the learning materialforthis interactive toy. One ofthekeydifferencesbetweenchannelsandstrategicpartnersisthatthe latter often is a cost factor whereas the former is an income factor. The FIGURE 7: SOUNDSTEPS positioning of a (potential) collaborator as either a channel or a strategic (SOURCE:NYOYN.COM partnerhasamaininfluenceonthebusinessmodelasshowedbyNYOYN andSeriousToys,bothofferingcomparablechildrentoys. NYOYN aims to bring learning, mobility and interaction together in their products thereby mainly focusing on children. Their newest product Sound Steps is a product that uses sounds to instruct children to make specific combinationsonthesocalledinteractivetiles. Serious Toys is a similar company like NYOYN. It aims to merge fun and personal development thereby mainly focusing on the learning need of the individual child. Their product TagTile instructs children to position piecesataspecificplaceontheirinteractiveboard. FIGURE8:THETAGTILE Besides their comparable products and customer segment, NYOYN and (SOURCE:SERIOUSTOYS.NL Serious Toys have more in common; they both lack the knowledge to manufacture market specific learning material. As a result they need to cooperate with CollaborationandBusinessModelsintheCreativeIndustry Page28of47
  • educationalpublishersanddidacticalchildexperts(pedagogues).However,thearrangementof thiscooperationdiffersbetweenNYOYNandSeriousToys. ThefirstgoalofSeriousToyswastoconvincealargeeducationalpublisheroftheaddedvalue of their product. It was reasoned that the conviction of this publisher would lead to the manufacturing of learning material (Strategic Partner) as also the selling of the product (Channel). Although this goal, the conviction of a large publisher, has been met Serious Toys faces two main problems. First, although the publisher agreed to develop the material, they dontgiveittheattentionneededandfailtoallocatesufficientresourcestotheproject.Asa result,themanufacturingspeedofthematerialslowsdown.Second,sincethepublisherisan extreme powerful source, Serious Toys have been put under pressure to share much of the potentialbenefits.Thisimpliesthatforeachproductsold,SeriousToysneedstosharealotof theirrevenuewiththepublisher. NYOYN selected another market approach. Instead of contracting a publisher (Strategic Partner), their goal was to convince a large childhood institution (Customer Segment) to demonstrate the benefits of their products. Like Serious Toys, they succeeded in convincing the institution, although no specific learning material had been developed yet. With this institution they developed a prototype of a customer specific application. Furthermore, they formalized that this institution would buy a specified amount of products if this prototype wouldbedeveloped.Next,theyapproacheddidacticalexpertstomastermindtheproduct. FromthisNYOYNversusSeriousToyscase,thefollowingcanbeconcluded.First,althoughthe typeofproductscanbecomparablebetweencompanies,thebusinessmodelscanbedifferent. One of the main factors that influence these models seems to be the market approach. Second, in negotiating with powerful institutions it depends whether they are potential consumerorarepotentialkeypartners. DividingEarnings Inmostcollaborationsmoneyneedstobedividedacrossallparties.Thiscanbedoneupfront, butalsolateron.Threedifferentapproacheshavebeenidentifiedduringtheinterviews.First there is the licensing method. In this method, the licensee needs to pay a fixed amount of money per product in which the IP is used. An example of this method can be found in the NYOYNversusPhilipscooperation.Asecondmethodusedcanbeclassifiedasfixedprice.In fixed price cooperation, one of the collaborating parties pays a fixed amount of money to receiveaparticularserviceorproduct.Walelioftenuses thismethodwhencooperatingwith their clients. A third method is mentioned by Bas van Oosterhout and is often defined as bartering. In a bartering situation, companies exchange services or goods without any monetarytransaction. Immaterialvalue Albert Boswijk of Experience economy indicated the importance of dealing with immaterial valueinsteadofonlyeconomicvalueinbusinessmodelsinthecreativeindustry.Examplesof immaterial value are social value, knowledge value, and idealistic (e.g. sustainability) value. Theseimmaterialvaluesareoftenalsocreatedinotherthantraditionaltransactionways,e.g. bygeneratingfeedbackonuserbehaviororothertypesofservices.Newbusinessmodelswill deal with several types of values. Trust between parties will be essential. The importance of culturalvalueisalsostressedbyHanLeBlancofAliceinEindhoven. CollaborationandBusinessModelsintheCreativeIndustry Page29of47
  • Fromthesediscussions,thefollowingcanbeconcluded.First,thetypeofcustomersegmenthasaclear impact on the business model. Second, not only the power of an institution but also the type of collaborationhasasignificantimpactonthenegotiations. Next to the business model framework, also the type of business model has been analyzed. Table 5 maps the business models of our interviewees into the framework of Malone. As can be seen, most interviewees can be positioned in either the Creator/Physical, Creator/Intangible or Broker/Intangible blocks.Althoughthelackofintervieweesintheotherblocksmaydependonthechoiceofourinterview methodology (snowball effect), it canalsobe caused by the fact that these business models do occur lessfrequentlyinthecreativeindustry.Thelackofdedicatedfinancialfocusedbusinessesinthecreative industry is, for example, frequently mentioned by our interviewees. Also, the limited availability of wholesalers/retailers in the creative sector hinders companies to bring their products to the market. Furthermore, the channels that exist do have so many power, that creative companies experience difficulties in their negotiating processes with these channels (see e.g. the NYOYN/Serious Toys example). 4 TABLE5THECREATIVECOMPANIESINTHEFRAMEWORKOFMALONE(2006) Financial Physical Intangible Human Creator Entrepreneur Manufacturer Inventor HumanCreator5 (KleinerPerkins) (GM) (LucentBellLabs) Nyoyn ExperienceEconomy Waleli Waleli WaagSociety WaagSociety PatchingZone Verkeersgame SeriousToys Distributor FinancialTrader Wholesaler/Retailer IPTrader HumanDistributor1 (MerrilLynch) (wallMart) (NTLInc.) Landlord FinancialLandlord PhysicalLandlord IntellectualLandlord Contractor (Citygroup) (Hertz) (Microsoft) (Accenture) TNO CapGemini Broker FinancialBroker PhysicalBroker IPBroker HRBroker (CharlesSchwab) (eBay) (Valassis) (EDS) Waleli TNO CCF 5.3 COLLABORATIVEBUSINESSMODELS Since creative companies often collaborate with other companies one would expect some specific business models for this area. Although the examples are limited, we found some interesting cases/modelsasdescribedbelow. 4 Derived from analysis of the interviews. Companies like Mediagilde, Alice Eindhoven, Point One are important enablers for the creative Industry, but are not an creative company themselves. Therefore, these companies are excludedfromthistable. 5 These models are illegal in the US and most places today because they involve selling human beings. They are includedhereforlogicalcompleteness. CollaborationandBusinessModelsintheCreativeIndustry Page30of47
  • LongTailbusinessModels SanderLimonardfromTNOshowedtheLongTailbusinessmodelasatypicalmodelforthenew media industry as depicted below. At the left hand side of the tail the professional content creators are positioned. Typically, they have great control over the content generated and serveaspecificcustomermarket.Ontherighthandsideofthetail,thereistheusergenerated content at platforms such as YouTube. At such platform, the content is mainly uncontrolled, diverseandoftenonlyinterestingforsomeofthevisitors. FIGURE9:THELONGTAILBUSINESSMODEL,ADAPTEDFROM(ANDERSON,2008) InthemiddleofthetailSanderpositionsthesemiprofessionals.Thisgroupofcontentcreators isamixofprofessionalcreatorsandusersstartingcooperating.Sanderacknowledgesthatthe arrangementofthiscooperationisdifficultespeciallywhenitcomestodividingofearningsand the valuation of content. He furthermore states that there is a lack of clear business models thatcanguidepartnersstartingtocooperate. IntegratedBusinessModels. Bas van Oosterhout is a medium experienced consultant at CapGemini advising businesses about how to structure their business models. He states that current research does not pay significant attention towards integrated business models. During the interview he shortly introduces the concept of partnering in which collaborating companies build one shared businessmodel.However,thismodelisinfrequentlyusedinEuropesincemostoftheEuropean businesses are transactional and sequential oriented. Paul Grefen, researcher at TU/e wrote recently a book on the design of IT enabled business models, which focuses on dynamic collaborationsbetweenorganizations,wherethebusinessmodelispartofthechainandnotof individual organizations. An interesting example of an ebusiness model is that of Sellaband. Artists could promote their music via the Sellaband site, and users could comment on their music and buy some kind of shares. When more than 5000 individuals favor the music, the artistsareinvitedtorecordaCDviathecompanySellaband6. Collaborationinthechainoroncorecompetence Another interesting concept when it comes to integrated business models is introduced by RonaldBegeeraboutthedevelopmentofHDTV.Hearguedtwodifferentcollaborationmodels are used in Point One projects, namely collaboration in the value chain and collaboration on core business. In the development of the HD technology, companies from different 6 Sellaband went bankrupt in February 2010, but some days later a new investor was found and the company continued.Thebusinessmodelthusstillseemstowork. CollaborationandBusinessModelsintheCreativeIndustry Page31of47
  • perspectives(e.g.cablecompanies,satellitecompanies,TVcompanies)cooperatedtotransfer HD streaming video live from a camera somewhere in the world, to a TV. Philips and other parties(e.g.UPC)developedandtesteda systembased onshared protocolsandtechnology. Thisallowedtoreducetherisksinanewtechnologydevelopmentprocess,whichisnormally very risky. Also Albert Boswijk of Experience Economy indicated that collaboration can take place on different aspects, like concept development, marketing and customer involvement, andsupplychain. 5.4 CONCLUSION Fromtheinterviews,sometentativeconclusionscanbedrawn: Thecreativeindustryisimmensediverse.Ascanbeseenfromthedescriptionofalltheorganizations interviewed, they vary heavily in 1) size, 2) operating market, and 3) main activities. Although this illustratesthevarietyofthecreativeindustry,itmakescomparisondifficult.Forfollowupresearchwe suggesttoselectmorehomogeneousstakeholders. Main problems in the creative industry regarding collaboration and business models seem to be the creation and appropriation of (several types of) value for all stakeholders (win win), dealing with organizational differences between collaborating partners, IP related issues, and the development of interorganizationalbusinessmodels, Someexamplesofbestpracticescouldhavebeenidentified,likeNYOYN.Ithasalsobeennoticedduring theinterviewsthatbusinessmodelsareuniqueperfirm,evenwhenbusinessesworkinthesameniche andoffercomparableproducts(seee.g.theNYOYNversusSeriousToyscase).Themoreproduct/service basedcompaniesshowthehighestvarietyofbusinessmodels,whereascompaniesthatoperateinnew (social)mediaenvironmentstypicallyhaveahitandrunstrategy. CollaborationandBusinessModelsintheCreativeIndustry Page32of47
  • 6 CONCLUSIONS Collaboration in the creative industry is indeed very important. There are several reasons for collaborations betweenpartnersinthecreativeindustry.Forexample,creativebusinesses(ZZP,start ups, SME,) often lack resources to leverage their creativity into successful products whereas other (larger) companies often lack creativity and speed to exploit their IP. Based on our study, we see heterogeneous collaborations in the creative industry as collaborations a) between different type of partners:e.g.ZZP,SME,startupsversuse.g.largecorporations,knowledgeinstitutes,culturalinstitutes, b) between partners from different disciplines (different Beta disciplines like mechanical engineering, electrical engineering etc., but also alfa and gamma disciplines), and c) with different positions in the valuechain/ondifferenttopics,e.g.conceptdevelopment,marketingandcustomerinvolvement,supply chain,etc.. Importantproblemsrecognizedincollaborationsinthecreativeindustryarea)economicvaluationof creative/cultural value is difficult since this value is to a great extent intangible, which often rises problemswiththeprotectionofIPorintheattractionofmoney;b)differencesincultureandapproach between partners (e.g. formality, hierarchy, scale). Since the creative industry employs approximately 30%oftheDutchemployees,thecollaborationproblemsarenotincidentalbutstructural;mostofthe intervieweesstatethatitisdifficult. Important enablers for collaborations in the creative industry seem to be subsidies (like Point One), developmentenvironments(likeFablab),networks(likesocialnetworks),andcommunicationandtrust (versus formalization, contracts and IP). Practitioners invented numerous ways (best practices) to overcome typical problems with heterogeneous collaboration. Many entrepreneurs are involved in (large)networksandusestrongandweaktiesrelationships.Theserelationshipsenablethemtoattract moneyandraisefunds,get(free)juridicaladvice,and/orstartnewcooperations.Manyofthemstate thatcommunicationandtrustareessentialinmaintainingthesenetworks.Furthermore,entrepreneurs showagreatamountofcreativityincreatingbusinessmodels.Someofferadiversifiedproduct/service portfoliotoextentthenumberofpossibleincomechannels.Othersareinvolvedinnumeroussubsidy programs.Someevencreateuniquedistributionchannels. Twodominanttypeofbusinessmodelscouldbeidentifiedinthecreativeindustry,namelycreators,in whichproductsarecreatedandsoldtobuyers(physicalaswellasintangibleassetsarebeingsold)and brokers,facilitatingsalesbymatchingpotentialbuyersandsellers,ofmainlyintangibleassets(basedon the framework of Malone, 2006). Some other business model related aspects we found are: every model is unique; alignment of the partners' business models is essential in fruitful collaboration; and open innovation (insideout and outsidein) stimulates collaborations and enables new ways of doing business.Despitethelargeamountofprofessionalattentiontobusinessmodels,academicliteratureon business models is scarce. We could identify several frameworks of business models and types of business models. But insight on the design and development of business models for (heterogeneous) collaboration is limited, let alone specific to the creative industry. Empirical research based on some good(andbad)practicesmayhelptocreateinsightinthedevelopmentofeffectivebusinessmodels andcreateguidelinestodesignbusinessmodelsusefulinthecreativeindustry.Soalthoughsomebest practice exist, more research towards effective business models for collaboration in the creative industryisneeded.Itshouldenhancebothscientistsandpractitionerstofullyexploittheopportunities inthecreativeindustry. Also guidelines and support is needed to face the many challenges when setting up heterogeneous collaborations.Thishasnotbeencoveredwidelyintheliterature,andalsoinpractice,littleisknown. Many of the interviewees acknowledged that most collaborations are designed by their gut feelings. CollaborationandBusinessModelsintheCreativeIndustry Page33of47
  • Insight in the development and guidelines for the design of business models for different type of (heterogeneous)collaborationsisdefinitelymissing.Inordertocreateusefulguidelines,manydifferent streams in the literature need to be synthesized, like literature on partnerships, interorganizational collaboration and open innovation, and applied to the creative industry. For research purposes, selectingcasesinspecificareasinthecreativeindustryistherebyneeded,e.g.themusicindustry. Somespecificquestionsforfurtherresearchonbusinessmodelsforheterogeneouscollaborationsare Howtocreateandappropriatevalue withbusinessmodelsthatcombinedifferenttypesofvalue,notonlyeconomicvalue,butalso immaterialvalue(likeculturalvalue,socialvalue,knowledgevalue,idealistic(e.g. sustainability)value)? withabusinessmodelthatisbothinnovativeandstillacceptedintheindustry?(What determinesabusinessmodelsuccess,tobeaccepted? with(notused)IPoflargerorganizations(PhilipsResearch,TNO,etc.),basedoncollaboration betweenlargerorganizationsandSME/creativeZZPinawinwinsituation?(ideaofbigplayer, makebusinesswithsmallplayer)(valorisation) basedoncollaborationbetweencreativeZZP/SMEandlargerorganizationsinawinwin situation?(ideaofsmallplayer,scaleupwithlargeplayer) ininterfacebetweenbigplayersandusers/ZZP/SME?(e.g.platformdevelopmentbetween professionalcontentprovidersandusers)? Howtosupportvaluecreationandappropriation ininterorganizationalbusinessmodels?(Businessmodelsthatdonotbelongtoone organization,buttothevaluechain;nexttothebusinessmodelsofpartnerorganizations.) EindhovenUniversityofTechnologyisinterestedinstudyingthesequestionsinthecreativeindustryand welcomes collaborations with enthusiastic partners. We would like to combine knowledge creation according to academic standards, with developing guidelines that can be used for improving value creationandappropriationinthecreativeindustry. CollaborationandBusinessModelsintheCreativeIndustry Page34of47
  • 7 REFERENCES ANDERSON,C.2008.Thelongtail:Whythefutureofbusinessissellinglessofmore,HyperionBooks. ARKU,G.2002.Collaborationinindustry:Empiricalfindingsamongsmallelectronics manufacturingfirmsintheGreaterTorontoArea.GeoJournal,57,325336. BILTON,C.2007.ManagementandCreativity:fromcreativeindustriestocreativemanagement,Wiley Blackwell. BUIGUES, P., JACQUEMIN, A. & MARCHIPONT, J. 2000. Competitiveness and the value of intangible assets,EdwardElgarPublishing. CHESBROUGH,H.2003.Theeraofopeninnovation.MITSloanManagementReview. CHESBROUGH,H.&ROSENBLOOM,R.S.2002.Theroleofthebusinessmodelincapturingvaluefrom innovation: Evidence from Xerox Corporation's technology spinoff companies. Industrial and CorporateChange,11,529. CHESBROUGH, H. & SCHWARTZ, K. 2007. Innovating business models with codevelopment partnerships,ResearchTechnologyManagement;50(1),5559. CHESBROUGH, H., VANHAVERBEKE & WEST 2006. Open innovation: Researching a new paradigm, OxfordUniversityPress,USA. CUNNINGHAM,S.2002.Fromculturaltocreativeindustries:Theory,industry,andpolicyimplications. MediaInternationalAustralia,102,5465. DE MAN, A. P. 2004. The Network Economy: Past and Present. The Network Economy. Edward Elgar Publishing. FLEW,T.(2002).Beyondadhocery:definingcreativeindustries. IIPCREATE.2010.ICTInnovatiePlatformCreatieveIndustrie[Online].Available:iipcreate.com[Accessed 1/27/20102010]. MAGRETTA,J.2002.Whybusinessmodelsmatter.HarvardBusinessReview,80,8693. MALONE,T.W.,WEILL,P.,LAI,R.K.,DURSO,V.T.,HERMAN,G.,APEL,T.G.&WOERNER,S.L.2006.Do SomeBusinessModelsPerformBetterthanOthers?MITSloanManagementReview. MORRIS,M.,SCHINDEHUTTE,M.&ALLEN,J.2005.Theentrepreneur'sbusinessmodel:towardaunified perspective.JournalofBusinessResearch,58,726735. OSTERWALDER,A.2009.BusinessModelGeneration,Stillunpublished. OSTERWALDER,A.&PIGNEUR,Y.2009.BusinessModelGeneration. ROMME, A. & ENDENBURG, G. 2006. Construction principles and design rules in the case of circular design.OrganizationScience,17,287. SHAFER,S.M.,SMITH,H.J.&LINDER,J.C.2005.Thepowerofbusinessmodels.BusinessHorizons,48, 199207. SMITH, C. 2001. The Creative Industries Task Force Mapping Document [Online]. London: UK Government.Available:http://www.culture.gov.uk/reference_library/publications/4632.aspx. SRA2009.StrategicResearchAgenda.ICTInnovationPlatformCreativeIndustry,IIPCreate. TEPPER, S. 2002. Creative assets and the changing economy. Journal of Arts Management Law and Society,32,159168. CollaborationandBusinessModelsintheCreativeIndustry Page35of47
  • 8 INTERVIEWNOTES BEGEER,R.1/12/2010.RE:InterviewNotes:CapGemini.TypetoKOSSEN,R.&POEL,P.V.D. BLANC,H.L.1/25/2010.RE:InterviewNotes:AliceinEindhoven.TypetoKOSSEN,R.&POEL,P.V.D. BOSWIJK, A. 10/13/2009 2009. RE: Interview Notes: The Experience Economy. Type to REYMEN, I. & POEL,P.V.D. FERWERDA,A.1/4/2010.RE:InterviewNotes:Mediagilde.TypetoKOSSEN,R.&POEL,P.V.D. GOGH,B.V.11/25/2009.RE:InterviewNotes:NYOYN.TypetoKOSSEN,R.&POEL,P.V.D. GREFEN,P.1/19/2010.RE:InterviewNotes:ProfessorTU/e.TypetoKOSSEN,R.&POEL,P.V.D. HAMMINGA,S.11/6/2009.RE:InterviewNotes:Waleli.TypetoKOSSEN,R.&POEL,P.V.D. HIETBRINK,R.10/28/2009.RE:InterviewNotes:SeriousToys.TypetoKOSSEN,R.&POEL,P.V.D. KIRKELS, Y. 10/14/2009 2009. RE: Interview Notes: Researcher TU/e / Fontys. Type to KOSSEN, R. & POEL,P.V.D. KRESIN,F.1/4/2010.RE:InterviewNotes:DeWaagSociety.TypetoKOSSEN,R.&POEL,P.V.D. LIMONARD,S.1/25/2010.RE:InterviewNotes:TNO.TypetoKOSSEN,R.&POEL,P.V.D. NIGTEN,A.1/26/2010.RE:InterviewNotes:PatchingZone.TypetoKOSSEN,R.&POEL,P.V.D. OOSTERHOUT,B.V.1/12/2010.RE:InterivewNotes:PointOne.TypetoKOSSEN,R.&POEL,P.V.D. ROBERTUS, H. 11/10/2009. RE: Interview Notes: Creative Conversion Factory. Type to KOSSEN, R. & POEL,P.V.D. VERSTAPPEN,O.10/20/2009.RE:InterviewNotes:Verkeersgame.TypetoKOSSEN,R.&POEL,P,V.D. CollaborationandBusinessModelsintheCreativeIndustry Page36of47
  • 9 APPENDICES 9.1 INTERVIEWPROTOCOLENTREPRENEUR 1.Agenda 1. Besprekenagenda 2. Wederzijdseintroductie 3. Toelichtingdoelproject 4. Interview 5. Afsluiten 2.Wederzijdseintroductie Vertelwatoveruwachtergrondenhuidigefunctie.(Watisuwbetrokkenheidbijde "creatieveindustrie"?) IntroductieRemcoenPeter. 3.Toelichtingproject Hetdoelvanditprojectisomkennisenexpertiseteinventariserenophetgebiedvan heterogenesamenwerkingenbusinessmodellenindeICTgerelateerdecreatieveindustrie Kennisenexpertise.Dekennisenexpertisewordtverzameldbijkennisinstituten(zoals TNO,Universiteiten),kleineorganisatiesengroteorganisaties. ICTgerelateerdecreatieveindustrie.Dezeindustriebevatorganisatiesdiezichonder andere(maarnietuitsluitend)focussenopgaming,socialesoftware,artificial intelligence,ontsluitenvanpersoonlijkofcultureelerfgoed,nieuwemedia,wearables andambienttechnology. Bijdezesamenwerkingkomenmeerdereproblemenkijkenzoals'Hoerichtenwede samenwerkingm.b.t.' VerdelenvanIntellectualProperty Welkbusinessmodeltehanteren Welkesamenwerkingsvorm Ditprojectprobeertbeterinzichttekrijgenindeproblemendieerspelenenconcrete probleem/onderzoeksgebiedenblootteleggenwaarzowelvanuitdepraktijkalsvanuitde theoriebehoefteaanis. 4.Interview Inhoud(exampleforonespecificcase) Watdoetuwondernemingprecies? Hoeisuwbedrijfgewordentotwathetnuis?[Vanideetotrealisatie] o Welkerollenhebbenanderepartnershieringespeeld? Hoeziet/zagmomenteeluwsamenwerkingmet.eruit?(Opuwwebsitevalttezien datuo.a.met.samenwerkt(e).) o VerdelingIP o BusinessModel CollaborationandBusinessModelsintheCreativeIndustry Page37of47
  • o Typeofcollaboration o ... Vanwelkekenniskonugebruikmakenm.b.t.hetinrichtenvaneensuccesvolle samenwerking? Hadugebrekaankennism.b.t.hetinrichtenvaneensuccesvollesamenwerking?Waar wasnood/gebrekaan?Watwarenbelangrijkeaspecten? o Hoeheeftueeneventueelgebrekaankennisopgelost? Haduhetideedeunderdogtezijntijdensdeonderhandelingen?Hoeheeftudit ervaren/opgelost? Watzouuachterafgezienandersgedaanhebben? Projectgerelateerd WiezijnvolgensubelangrijkespelersinNLmbtheterogenesamenwerkingenbusiness modellen(indecreatieveindustrie)? docenten(HBO,Universiteit),wetenschappers,consultants,onderzoeksinstituten, bedrijven Kentuvoorbeeldenvansuccesvolle(hiernogdefocustoevoegenheterogene) samenwerkingen/initiatieven/businessmodellen? o Watishierbijkenmerkend?Welkepartijenenhoewordtdesamenwerking ingericht?(probeerconcreetnaarnamen,websites,contactpersonente vragen) Kentuvoorbeeldenvannietsuccesvollesamenwerkingen/initiatieven/business modellen? o Watwarenhierbijproblemen? Kentuprojecten(Nationaal,EUofanders)diegerelateerdzijnaanhetthemavan businessmodellenensamenwerking? CollaborationandBusinessModelsintheCreativeIndustry Page38of47
  • 9.2 INTERVIEWPROTOCOLINFORMATIONBROKERS 1.Agenda 1. Besprekenagenda 2. Wederzijdseintroductie 3. Toelichtingdoelproject 4. Interview 5. Afsluiten 2.Wederzijdseintroductie Vertelwatoveruwachtergrondenhuidigefunctie. Watisuwbetrokkenheidbijde"creatieveindustrie"? 3.Toelichtingproject Hetdoelvanditprojectisomkennisenexpertiseteinventariserenophetgebiedvan heterogenesamenwerkingenbusinessmodellenindeICTgerelateerdecreatieveindustrie Kennisenexpertise.Dekennisenexpertisewordtverzameldbijkennisinstituten(zoals TNO,Universiteiten),kleineorganisatiesengroteorganisaties. ICTgerelateerdecreatieveindustrie.Dezeindustriebevatorganisatiesdiezichonder andere(maarnietuitsluitend)focussenopgaming,socialesoftware,artificial intelligence,ontsluitenvanpersoonlijkofcultureelerfgoed,nieuwemedia,wearables andambienttechnology. Bijdezesamenwerkingkomenmeerdereproblemenkijkenzoals'Hoerichtenwede samenwerkingm.b.t.' VerdelenvanIntellectualProperty Welkbusinessmodeltehanteren Welkesamenwerkingsvormpast Ditprojectprobeertbeterinzichttekrijgenindeproblemendieerspelenenconcrete probleem/onderzoeksgebiedenblootteleggenwaarzowelvanuitdepraktijkalsvanuitde theoriebehoefteaanis. 4.Interview Welkeuitdagingenzieturondomsamenwerkingtussenheterogeneorganisaties(klein metgroot)indecreatieveICTindustrie Hoeis/wordtdezesamenwerkingvaakgefaciliteerd? o IP,Businessmodellen(valueforallpartners),typeofcollaboration(JV,project, ....) o Watzijndetrendsopmetmoment? Welkekennisiservoorzoveruweetmomenteelaanwezigm.b.t.hetinrichtenvan eensuccesvollesamenwerking? o Denkaanbusinessmodelframeworks/templates,oftypes o BestPractices CollaborationandBusinessModelsintheCreativeIndustry Page39of47
  • Welkekennisontbreektm.b.t.hetinrichtenvaneensuccesvollesamenwerking? o Waarisvoornamelijknood/gebrekaan? o Watzijnbelangrijkeaspecten? o Zijndezeproblemenspecifiekvoordezesector? Kentuvoorbeeldenvansuccesvolleheterogene samenwerkingen/initiatieven/businessmodellen? o Watishierbijkenmerkend? o Welkepartijenenhoewordtdesamenwerkingingericht? o kosten/baten? o Hoewordhetrisicogedeeld? Kentuvoorbeeldenvannietsuccesvollesamenwerkingen/initiatieven/business modellen? o Watwarenhierbijproblemen? o Zijneranderetypischeproblemendienaarvorenkomenineenheterogene samenwerking? WiezijnvolgensubelangrijkespelersininNLmbtheterogenesamenwerkingen businessmodellen(indecreatieveindustrie)? Wiezijnvolgensubelangrijkespelersindecreatieveindustriembtheterogene samenwerkingenbusinessmodellenindecreatieveindustrie? docenten(HBO,Universiteit) wetenschappers consultants onderzoeksinstituten bedrijven Kentuprojecten(Nationaal,EUofanders)diegerelateerdzijnaanhetthemavan businessmodellenensamenwerking? Wiltuverdernogietskwijt?ietswatnognietaanbodisgekomen? Welkepersonenzoudenwenogverdermoeteninterviewenvolgensu? CollaborationandBusinessModelsintheCreativeIndustry Page40of47
  • 9.3 BUSINESSMODELS (seenextpages) CollaborationandBusinessModelsintheCreativeIndustry Page41of47
  • KP KA VP CR CS Codevelopment and open Investmentscompanies(ING, Broker position between Critical technologies/ innovation. Only via Segment depends on the ABN) which enable Philipsandothercompanies knowledge which are needed licensing methods, because natureofIP. innovation development forcertaininnovations PhilipstypicallyneversellIP. and deployment (examples, Set up and manage Customers need to have an seeinterviewtranscriptions) cooperationprojects entrepreneurialspirit. Knowledge institutes (e.g. For subsidy trajectories two TU/e,TNO,PWC,Ordina) main segments are served; navigation & mobility, and care&wellbeing. KR CH Awareness is created via Intellectual resources; IP networking fromPhilips Purchases are made via negotiations Philips participates by offering knowledge and human capital to the innovationteam. C$ RS MostcostsarealreadymadebyPhilipsandnonessential. Customers are willing to pay for knowledge / particular resources if they can use, exploitanddevelopanIP. Fixedcosts;employeesofCCF(currentlyonly1) Licensingfees(e.g.percentageofturnover,fixedamountperproduct,lumpsum) CollaborationandBusinessModelsintheCreativeIndustry Page42of47 Variablecosts;howmuchefforttheyputintheirprojects.
  • KP KA VP CR CS - (inprogress)Creatinga - Keepingtestsupto Providing (as close to reality There is no customer All (dutch) youngster that strategicalliancewitha date as possible) instructions for relationship. The concept is want to get their theory largeinsurancecompany - Developing gettingyourcartheorylicense aimed at selfserving diplomainordertogettheir thatprovidesinsurances offline/onlinegames byofferingcandidates: customers. drivinglicense. toinstructors. - (now)Finding - Companythatprovide finance/investmentfor 1. Anonlineexamination Specialized in youngsters onlinepayment theirofflinegame. roominwhichtheycan withdyslexia possibilities(not practiceandtesttheir knowledgewithultimate functioningwell) experience (www.haaljetheorie.nl) 2. Ononlinegame(in KR CH development) 3. Onofflinegame(tobe For1and2(seeVP): - Trafficspecialist developed) (humanresource); - Individualcardriving schools - Websites For3 - Indevelopment. C$ RS - Mostcostsarefixedcosts(hostingwebsite/rentingepaymentservices; For 1: Asset Sale. Customers need to pay to conduct a test. - Outsourcingof(game)development For2:UsageFeeandAdvertising.Customersneedtopaytoplaythegameforapre specified amount of time. Companies can advertise in the game itself. CollaborationandBusinessModelsintheCreativeIndustry For3:Unknown.PossiblyviaAssetSale Page43of47
  • Note:Thenumbersusedintheboxesdorefertoeachother. KP KA VP CR CS - Networkof(wellknown) Developing and 1. Bringinnovationsto 1. Investinthequalityof 1. Largercompanies investors; championing innovative themarketbasedon thenetworkwith thatsubstantially - Productioncompanies; products. acompanysown largercompanies investinR&D (sometimes companiesthatcan IP/techniques; activities; employeesfromwell actuallytransferWalelis 2. Enableentrepreneurs 2. Nichemarketsof1) knowncompaniesare wirelesssolutionsintoa togetintocontact attractedfortheir customersthatare physicalproduct. withrelevantparties relations) willingtouse (brokerfunction) 2. Intensiverelationship innovativeproducts 3. Offeringproducts andcoaching 2) larger thatmakeuseof institutions. wireless KR technologiesthat CH reallyfulfillamarket Individuals that excel in a need. Larger companies that have specific field (like drawing a direct relation with mass pictures) and want to markets and that can use cooperate with Waleli nd the new techniques in their are open to approach the products [difficult to market under Walelis establish] brand. Ownnetwork C$ RS - Walelimainlyfocusesonvaluecreationandassuch,costsarenotthat 1. Hourlypaidadvice; important. 2. Allocateddividend.(Waleligetssharesincompaniestheyhelp) - ForWaleliownproducts,thecostsconsistsofproducingaproduct. 3. AssetSale;Everyproductsoldgeneratesmoney CollaborationandBusinessModelsintheCreativeIndustry Page44of47
  • A(1)inthebusinessmodelreferstothesoundsteps,whilea(2)inthetext referstotheinteractivewall KP KA VP CR CS Koreinkinderpleinhelps Maintainrelationships Thevaluetheycreateis Bartisinpersonaltouch Nyoynservesa togetintouchwithcare withmarket(sense) aninteractiveand withthecustomers segmentedmarket; institutionsaroundthe Productionsolving; sustainableplaying aimedat Examples: Netherlands developingnew productwhichenhances Intensivecustomer CareInstitutions Octopusgroupfor productsandnew interactionandfantasy relationshipbecause Revalidationcenters financialaffairs software creationfromchildren(1 needofcustomer PrimarySchools(1) PhilipsbecauseofIP ),toadults(2) acquisition. Museums(2) TU/eclosecooperation Nyoynusescustomization betweenacademiagives totailortocustomer you(in)direct needs(onlyforSoftware) advantages Performanceisbetter CH (itsgivingandtaking) KR comparedtoother Koreinkinderpleinas interactiveplaying alaunchingCH solutions IPPhilips(intellectual) Developingown 2IDstudentsfrom Newnessisrelatedtothe distributionchannels, TU/etofurtherdevelop interactivewall,these (DC) thesoundsteps wallarenewonmarket ExploitingexistingDC ClosecontactwithCS andnewintechnology(2) (e.g.Heutink) Connectingwith healthcareinstitutions worldwide C$ RS Valuedrivencompany - Assetsaleinwhichthecustomerisbuyingasoundstep/interactive Owninvestmentsandinvestmentsoftheoctopusgroup.Oneguyofthis wall groupisworkingforNyoynaswell. - Subscriptionfeeinordertogetnewfirmwareandsoftwareupdates BecauseBartisanexperiencedentrepreneur,thereistrustwhich (e.g.newinteractivegames,newextensionspossibilities,etc) CollaborationandBusinessModelsintheCreativeIndustry benefitsinvestorentrepreneurrelations Page45of47
  • KP KA VP CR CS Buyersupplier Productionofthetik Lowerworkpressureon Cocreation:customers valueforprimary relationships(e.g.chess tegel teachersatprimary candevelopown schools,especiallyto whichmanufacturesthe Developmentofnew schools teachingprograms teacherstolowerwork tiktegel(thispartner gamesinhouse childrencanplayand Thispartisstillin pressure alsosharessomerisks) Managingpartnerships learnbythemselves development,since Strategicalliancestoget gaindeeperinsightsinto thereisonlyone Mostimportant creativeandpedagogy thedevelopmentofevery prototypeavailableyet. customersareprimary input(e.g.Jegro) singlechild schools,andother Customlearning educationalsystems/ programsforchildren networks. whohavedifficultieswith KR theirpersonal CH development RFIDantennaIP Existingchannelsfor educationalproducts (e.g.uitgeverijZwijsen) Directsalesatplatforms forprimaryschools C$ RS Valuedrivencompany;focusonvaluecreationratherthancostreduction Severalpossibilities(stillindevelopment); Fixedcostsarerelativelylow,howeverinitialdevelopmentcostare o Sellingthetiktegelforfixedamount substantial o Extragamesarerelativelycheap CollaborationandBusinessModelsintheCreativeIndustry Variablecostsdependspurelyonqtyofproducts o Subscriptionmodel Page46of47
  • CollaborationandBusinessModelsintheCreativeIndustry Page47of47