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An Empirical Investigation into the Demand for Mass Produced Artistic Products

Permanent Link: http://ncf.sobek.ufl.edu/NCFE004275/00001

Material Information

Title: An Empirical Investigation into the Demand for Mass Produced Artistic Products
Physical Description: Book
Language: English
Creator: Katikala, Chaitanya
Publisher: New College of Florida
Place of Publication: Sarasota, Fla.
Creation Date: 2010
Publication Date: 2010

Subjects

Subjects / Keywords: Media
Economics
Demand
Aesthetics
Genre: bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Thesis addresses concerns of early economists about the nature of demand for artistic products by looking at modern day creative works. In attempt to isolate the aesthetic value from other uses, the project focuses on mass produced artistic products. The industry is analyzed from three hypotheses of how consumers value art: conversational value, emotional value, and collection value. The data showed emotional value was best to describe how consumers used artworks. There was evidence against consumers using art for its conversational value and the evidence for collection value was inconclusive. A fourth value was also brought forward by the data and shown to be important to consumers: using art for personal identity formation. The thesis briefly explores philosophical implications of the technology�s effect of aesthetics.
Statement of Responsibility: by Chaitanya Katikala
Thesis: Thesis (B.A.) -- New College of Florida, 2010
Electronic Access: RESTRICTED TO NCF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE
Bibliography: Includes bibliographical references.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The New College of Florida, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Local: Faculty Sponsor: Edidin, Aron; Coe, Richard

Record Information

Source Institution: New College of Florida
Holding Location: New College of Florida
Rights Management: Applicable rights reserved.
Classification: local - S.T. 2010 K19
System ID: NCFE004275:00001

Permanent Link: http://ncf.sobek.ufl.edu/NCFE004275/00001

Material Information

Title: An Empirical Investigation into the Demand for Mass Produced Artistic Products
Physical Description: Book
Language: English
Creator: Katikala, Chaitanya
Publisher: New College of Florida
Place of Publication: Sarasota, Fla.
Creation Date: 2010
Publication Date: 2010

Subjects

Subjects / Keywords: Media
Economics
Demand
Aesthetics
Genre: bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Thesis addresses concerns of early economists about the nature of demand for artistic products by looking at modern day creative works. In attempt to isolate the aesthetic value from other uses, the project focuses on mass produced artistic products. The industry is analyzed from three hypotheses of how consumers value art: conversational value, emotional value, and collection value. The data showed emotional value was best to describe how consumers used artworks. There was evidence against consumers using art for its conversational value and the evidence for collection value was inconclusive. A fourth value was also brought forward by the data and shown to be important to consumers: using art for personal identity formation. The thesis briefly explores philosophical implications of the technology�s effect of aesthetics.
Statement of Responsibility: by Chaitanya Katikala
Thesis: Thesis (B.A.) -- New College of Florida, 2010
Electronic Access: RESTRICTED TO NCF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE
Bibliography: Includes bibliographical references.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The New College of Florida, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Local: Faculty Sponsor: Edidin, Aron; Coe, Richard

Record Information

Source Institution: New College of Florida
Holding Location: New College of Florida
Rights Management: Applicable rights reserved.
Classification: local - S.T. 2010 K19
System ID: NCFE004275:00001


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New College of Florida 2010 Katikala i An Empirical Investigation into the D emand for Mass Produced Artistic Products Chaitanya Katikala 5/17/2010 Thesis New College of Florida 10 Committee: Dr. Aron Edidin (sponsor), Dr. Richard Coe (sponsor), Dr. April Flakne

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New College of Florida 2010 Katikala ii Conte nts Chapter 1: Introduction............................................................................................................... 2 Section 1: Brief History ............................................................................................................ 2 Who studies preferences? ................................................................................................... 2 Turning back to philosophy ................................................................................................. 3 Economic Significance: ........................................................................................................ 4 Personal Hypothesis/Thesis: ................................................................................................ 5 Section 2: Why mass produced artwork .................................................................................. 5 Definitions for Thesis ........................................................................................................... 5 Previous Endeavors in Art Markets: ..................................................................................... 7 Focusing on Mass Produced Artworks ................................................................................. 8 Defining Mass Produced ...................................................................................................... 9 Summary ........................................................................................................................... 11 Chapter 2: The Value Systems ................................................................................................... 12 Section 1: Defining a Value System ........................................................................................ 12

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New College of Florida 2010 Katikala iii Introduction ...................................................................................................................... 12 The Problem of Need in Art Markets: .............................................................................. 12 From need to value system .............................................................................................. 13 Traditional Accounts of Aesthetic Value ............................................................................ 13 Relevant Hypotheses for Economic Analysis ...................................................................... 15 The Value Systems ............................................................................................................ 17 Section 2.1: Conversational Value ......................................................................................... 18 Basic Concept .................................................................................................................... 18 Theoretical Background ..................................................................................................... 18 Conversation ..................................................................................................................... 20 Need satisfied by cultural/conversational value ................................................................. 22 How p eople respond to art under this value system .......................................................... 24 Section 2.2: Emotional Value ................................................................................................. 26 Basic Concept .................................................................................................................... 26 Philosophical Background .................................................................................................. 26 Which experiences? .......................................................................................................... 27 How consumers treat art under this value system ............................................................. 28

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New College of Florida 2010 Katikala iv Section 2.3: Collection Value ................................................................................................. 30 Basic Concept .................................................................................................................... 30 Philosophical Basis ............................................................................................................ 31 Development of the Collection Pattern .............................................................................. 32 Collection in Art Markets ................................................................................................... 33 How people treat art under this value system ................................................................... 34 Chapter 3 : Economic Direction .................................................................................................. 36 Section 1: Background to art markets .................................................................................... 36 Differentiation ................................................................................................................... 36 Choice and Information ..................................................................................................... 38 Price and Risk .................................................................................................................... 40 Section 2: Types of Goods ..................................................................................................... 41 Search vs. Experience ........................................................................................................ 41 Durability .......................................................................................................................... 43 Non market transactions ................................................................................................... 46 Section 3: Data we are lookin g for ......................................................................................... 51 Supporting Data ................................................................................................................ 51

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New College of Florida 2010 Katikala v What kinds of sources to consider? ................................................................................... 55 Chapter 4: Research .................................................................................................................. 57 Section 1: Conversational Value ............................................................................................ 57 Cultural/conversational importance .................................................................................. 57 Strong effect by WOM and Buzz ........................................................................................ 63 Strong superstar effect ...................................................................................................... 68 Topics of conversation ....................................................................................................... 70 Weak cross cultural consumption ...................................................................................... 70 Strong substitutes with other cultural goods ..................................................................... 71 Section 2: Emotional Value .................................................................................................... 72 Aesthetic indicators within a genre .................................................................................... 72 Personal/Internal motivations for demand ........................................................................ 73 Previewing and recommender systems ............................................................................. 74 Direct mood evocation ...................................................................................................... 75 Clustering .......................................................................................................................... 77 Section 3: Collection Value .................................................................................................... 78 Strong brand loyalty .......................................................................................................... 78

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New College of Florida 2010 Katikala vi Overconsumption .............................................................................................................. 79 Tangibility/Ownership ....................................................................................................... 80 Section 4: Identity Formation ................................................................................................ 83 Chapter 5: Conclusion ............................................................................................................... 86 Section 1: Results .................................................................................................................. 86 Strength of Data ................................................................................................................ 86 Conversational Value ......................................................................................................... 88 Emotional value ................................................................................................................ 89 Collection Value ................................................................................................................ 89 Identity Formation ............................................................................................................ 89 Null Hypothesis ................................................................................................................. 91 The Release Date............................................................................................................... 92 Summary ........................................................................................................................... 92 Section 2: Application ........................................................................................................... 93 Bibliography .............................................................................................................................. 96

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New College of Florida 2010 Katikala vii Abstract An Empirical Investigation into the Demand for Mass Produced Artistic Products Chaitanya Shaq Katikala New College of Florida, 20 10 ABSTRACT Thesis addresses concerns of early economists about the nature of demand for artistic products by looking at modern day creative works. In attempt to isolate the aesthetic value from other uses, the project focuses on mass produced artistic products. The industry is analyzed from three hypotheses of how consumers valu e art: conversational value, emotional value, and collection value. The data showed emotional value was best to describe how consumers used artworks. There was evidence against consumers using art for its conversational value and the evidence for collectio n value was inconclusive. A fourth value was also brought forward by the data and shown to be important to consumers: using art for personal identity formation. The thesis briefly explores philosophical implications of the technologys effect of aesthetics. Advisors: Dr. Aron Edidin, Dr. Richard Coe Philosophy/Economics

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New College of Florida 2010 Katikala 2 Chapter 1 : Introduction Section 1: Brief History In the economic field of art markets, there has been confusion for a long time about how art markets are to fit traditional supply and dema nd models De Marchi summarizes the issues of art markets as such: even if the prices are determinate, those prices do not obey the usual rules, or indeed any rule (2 De Marchi and Goodwin). Adam Smith and his eighteenth century contemporaries, in trying to make art markets fit into economic models, debated on how their models failed to explain artworks Adam Smith, known for the idea of the invisible hand, recognized that the need for a rtwork is difficult to describe. F or him, the need is driven by tas te or the caprice or fashion of the day and investigation into the details or patterns of this caprice seemed for many economists to be out of the scope of economics (6 De Marchi and Goodwin). Baumols use of the descriptor rudderless is just anothe r way of saying that economists feel at a loss if prices reflect influences for which economic theory supplies no explanation (De Marchi 6) Who studies preferences? Two main questions arise when it comes to art markets. First is the question of why and wh en people demand artworks. The need that artworks satisfy is unclear. The second ( and related ) question is what exactly is demanded ? If we can better understand what drives the preferences in consumers, then we might understand when the utility of the ar twork is great enough to make a purchase. Economists have claimed for a long time that tastes and preferences are out of the jurisdiction of economics and should be left to other fields even

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New College of Florida 2010 Katikala 3 though answering these questions might shed li ght on the demand f or artistic products and possibly help us to understand taste in other industries. Aesthetics, psychology, sociology, and other similar fields were left to explain patterns in preference in mainstream economics (De Marchi 8) Many early researchers, like D e Piles, have theorized views on art which try to correlate inherent qualities of the work like the quality of the design, for example, to the success of the artwork. However, many of the proposals for the relevant set of qualities conflict with each other Some are too broad and others too narrow; ultimately, they seem to generally be arbitrary. The proposed formal qualities1Turning back to philosophy are quite numerous and they dont resolve the issue of our tastes being inconsistent. Today, studies about tastes and preferences ar e pursued primarily by behavioral economists However, the field tends to focus on behavior in the financial sector (such as reactions to new information and altruism) (Econlib) The question of what patterns there are in the preference of artworks remains unanswered and largely abandoned since the 18th century. To find answers to this question, we need to understand what art means to the consumer. The ontological status of art would help explain what art markets are and what need art is fulfilling. We find many answers for What is art? in aesthetics. Though aesthetics broadly refers to the study of value judgments and beauty as well as artworks, it includes 1 Formal qualities include feat ures which were supposed to be common to all types of artwork, such as De Piles proposed set of qualities: design, composition, coloring, and expression (De Marchi 9).

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New College of Florida 2010 Katikala 4 relevant discussion about the relationship b etween man and artwork pro viding some help in understanding art under economic terms. What drives our preferences and our tastes regarding artworks? When are these preferences strong en ough to influence us to consume an aesthetic good? What is demanded in art markets and what influences that demand? Aesthetics as a field has taken a plentitude of stances, analyzing art as being anything from a social institution to revealing intellectual truths to providing escape from society. These broad philosophical theories of the past are replaced by a focus on analyzing the nature of specific art movements or in using these new artistic styles to help redefine what art is and isnt. Aesthetics now primarily focuses on changes in the definition of art. However, analyzing the borders of arts e ssence is tangential to understanding the true nature of art since controversial works only controversially fulfill our aesthetic need. The question of what need art fulfills has mostly fallen out of the spotlight in philosophy in past few centuries, j ust as the same question has been ignored from the economic side. Economic Significance: While economics was just beginning, it delegated the question of the aesthetic need to philosophy while at the same time philosophy reduced its focus on these quest ions. Fortunately, we are now at a stage where we have substantially more economic and statistical data, allowing us to analyze consumption patterns in ways impossible years ago By empirically looking for consumption patterns which result from competing a esthetic theories we can discover which theory or theories people generally subscribe to when making purchasing decisions in artworks. Assuming we find enough data, w e can discover what need consumers attempt to satisfy when making purchases. The gap in research into art markets can be helped filled significantly by

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New College of Florida 2010 Katikala 5 empirically testing aesthetic theories with the data available to us today. This will also help resolve to some degree, some of the conflict between various aesthetic theories about the need satisfied by artworks. Personal Hypothesis/Thesis: Since the value systems chosen arent entirely mutually exclusive, they can all prove to present in consumption choices. However, my personal belief is that art ultimately satisfies a conversational need. We gain from art an important topic of conversation and shared symbolic references. A rtistic qualities like rhythm, movement, narrative of the artwork are not as important as the resulting discussion s I base this original hypothesis from personal experie nce, wherein the quality of music seems to be less important to my friends and I than the popularity or fame of the artist. Section 2: Why mass produced artwork Definitions for Thesis Art/artworks/art markets When the nonprofessional refers to art or art works, he/she generally thinks of visual arts or paintings. However, for the sake of this thesis, artworks will refer to all types of aesthetic goods including television, movies, music, and books. Aesthetic goods contain a creative and compositional eleme nt to the work and keep this creative element as the main objective. Art artworks art markets artistic products, and artistic industry will all refer to this general concept of art inclusive of aesthetic media and entertainment. The reason for the choic e of words is to emphasize that the results of the conclusion as applying not just to new media but to aesthetics;

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New College of Florida 2010 Katikala 6 the need will apply to artistic goods better than to what would be categorized under media (which can include video games, websites, cell p hone applications, and other media of debatable artistic aspects ) We are not focusing on products that have aesthetic components but instead on aesthetic products. Consumption versus experiencing Consumption will refer to the acquiring of the product, legally or illegally. Experiencing the product refers to listening to the music, watching the movie, etc. In other words, experiencing the artwork refers to exposure to its contents.

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New College of Florida 2010 Katikala 7 Previous Endeavors in Art Markets: Economists have analyzed ar t markets primarily in two ways, looking at supply side issues and looking at high art or original artworks. Supply Side Problems The f irst way economists looked at artworks is analyzation of the market to provide empirical support for public subsidies of the arts. The economics of arts is a relatively new subject a great deal has been published in recent years particularly on such questions as alternate ways of paying for commercialized radio and television Jazz and pop music have not so far attracted the atte ntion of professional economists (13 14 Blaug). The proponents of public subsidies present empirical and theoretical economic data to help support the continuation or augmentation of government funding to keep artistic businesses alive, leading to discove ries like the Baumol Effect2 2 The Baumol Effect describes a phenomenon when a sector of the economy with a less relative increase in productivity than other sectors of the economy will see a continuous increase in wages, making the cost of the good and services produced by this sector continuously more expensive. For example, while the efficiency of an artist doesnt increase (you cant play a song twice as fast or reduce labor input by reducing cast members for a play), other industries make significant strides (a factory with new equipment). Essentially, the Baumol effect states that t he cost of the good s and service s produced by the less efficient sectors, like performing arts, would eventually cost relatively more and more until the costs exceed the revenue. The obvious motivation to focus on supply side issues is

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New College of Florida 2010 Katikala 8 the fear of losing various art programs, like local opera houses or theaters. A second likely reason for a focus on supply side issues is that entertainment businesses h ave incentive to learn optimal ways to structure themselves financially. In looking for other source s of income while having little control or understanding about the demand, businesses that fund these economic studies would look towards alternate sources of revenue, leading to the investigation of government subsidies. High Art/Original Artworks The second major focus by many researchers is that of high art and original artworks. Auctions have been of great interest to the early economists and mass produc tion is a fairly new field. A larger portion of artistic transactions were of original artworks before the advent of mass production. Economists have analyzed art markets by looking at these original artworks as investments. By viewing the artwork as a dur able good that retains some value and has the potential to gain value, economists can attribute part of the price, especially on original artwork, to the ownership of a scare good. Scribani shows through an analysis of Antwerp, with some strong results, ho w original art was once substi tutable with collections of other types of rare luxury goods, like precious stones, tapestries, sumptuous books, and even exotic animals (306 De Marchi and Goodwin). There seems to be a utility solely from owning a rare comm odity (bragging rights or use as a symbol of status). The purchase of original artworks can be understood to some degree to be influenced by considerations of its utility for being rare (Caves). Focusing on Mass Produced Artworks

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New College of Florida 2010 Katikala 9 The major studies of economics have taken us far from understanding the aesthetic need. T he supply side issues inform us of how to dea l with changes in demand, which doesnt help explain why those changes are happening. The other focus on fine art and original artworks doesnt he lp us much either since original artworks also have utility for their rarity Original artworks have uses other than aesthetic considerations which wont help distinguish creative goods from singular goods (a good of which there is only one of, like the H ope Diamond or your mothers violin) failing to give us a distinction between the value of the artwork from the value arising from the uniqueness of that good (Zalio) To consider the relation between consumption patterns and aesthetic utility, we must av oid these cases of original artworks. The investment value and the utility gained from owning a rare commodity are mostly avoided in mass produced goods. Indeed, we expect the value of a mass produced good to decrease in value after it is purchased since more will be produced. The quant ity of, for example, available Fight Club DVDs will continuously increase (assuming that they are produced faster than DVDs are broken or lost), thus generally decreasing the value each individual DVD over time. By focusing on mass produced goods, we can generally assume the artwork is not being bought for investment purposes. They are b ought for aesthetic consumption. B y only focusing on the domain of mass produced artworks, we can more easily make conclusions about the need that artistic goods satisfy without confusing it with investment or utility gained by owning a rare commodity. Defining Mass Produced I propose, for the sake of isolating the factors which influence consumers to buy artworks, we should look at only massproduced artworks. By doing this, we avoid having to

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New College of Florida 2010 Katikala 10 make the distinction between the reasons why artwork is demanded and whether the purchaser simply wanted to make an investment in an original good. By massproduced artworks, I mean only that we are look ing at the production process; that the artwork can reach an almost infinite number of viewers simultaneously, not restricted by location or time. This rules out concerts, paintings (unless they are reproduced posters of the original), original scores, and similar products We can focus on the artwork itself and not the value gained by the scarcity of it.

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New College of Florida 2010 Katikala 11 Summary This thesis will focus on the question of what need is satisfied by massproduced goods so we can avoid including luxury considerations into consumption the artwork. We can best focus on just figuring out what need artwork s satisfy by trying to narrow down what goods would reflect artistic consumption needs. Our focus is on m assproduced artworks, defined as artistic goods that can be simultane ously consumed by multiple audiences simultaneously, regardless of time or location.

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New College of Florida 2010 Katikala 12 Chapter 2: The Value Systems Section 1: Defining a Value System Introduction My project is to analyze massproduced artworks from three different value systems: convers ational emotional and collection value. In addition, we will explore traditional accounts of aesthetic value as a null hypothesis, which implies that there is no pattern to aesthetic valuation Each way of valuing art has different motivations and influe nces from various thinkers. The three chosen value systems were considered as generalizations of various concerns of early economists that tried to reconcile art markets into economic models. The Problem of N eed in A rt M arkets: We have been focusing on determining the need that art satisfies. Economics tends to focus its typical models on examples such as food or housing. We can group together houses as satisfying the same need, providing shelter and facilities for living, like bathrooms. To a great extent, one house can be a substitute for another. W e can compare the quality of the house s and how well they satisfy ones needs for shelter, comfort, safety, etc The extent to which a house fulfills needs (demand) and its availability (supply) roughly de termines the price. The idea of artwork fulfilling a need is more complicated since the need satisfied isnt as obvious like shelter To merely say that there is an aesthetic need is vague. When is the need for artwork greater or less? What is a desi re for a particular artwork based on? Is the need ever satisfied?

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New College of Florida 2010 Katikala 13 From need to value system For goods with clear needs, we can understand clearly their values. The more the good fulfills the need or a set of needs, the more value it has. A house in a gated community helps fulfill the need for security and it is valued more depending on the extent of how much a gated community increases safety. S ecurity along with other numerous factors adds up to the valuation of the house In the same way, we will no t assume that there is only one need for aesthetic goods. There are probably many. W e will try to understand which needs are considered more heavily by observing in which ways one artwork is valued over another. Traditional Accounts of Aesthetic Value Many believe in the idea of art for arts sake, which means that there is a unique aesthetic value. This implies that, all other considerations aside (like moral or utilitarian), there is a value intrinsic to art. Though Kant and Hume didnt use the p hrase art for arts sake, t he y did capture this idea to a large extent. Kant states that each individual is granted with some same cognitive faculties, which allow us to have the common aesthetic experience. The aesthetic experience isnt evoked by a quality in an artwork, but is found in the orientation of the consumer to his or her environment This orientation has several requirements. First, one must be disinterested, which means that one would not be considering uses for the art. Kant uses the example of a dinner, where a person might be interested in the meal because of his hunger or because of appreciation of the persons generosity of making it, but disinterestedly he can look at the cooks work aesthetically (Kant 52). When making an aesthetic j udgment, the object is not seen as purposeful Instead the aesthetic object is seen as purposive where it doesnt have a n identifiable purpose but it

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New College of Florida 2010 Katikala 14 seems like it does have some purpose like quality. T he aesthetic viewer makes a universal subjective judgment where he/she experiences the object in such a way that they believe that everyone should come to the same subjective judgment of liking it (or not liking it). One can have this aesthetic experience towards any object, be it art or not, since the experience is not determined by the artwork or by others, but by the individual s orientation Each individual will react irrespective of others when having an aesthetic judgment. He will talk about the beautiful as if beauty were a characteristic of the object and the judgment were logical (namely, a cognition of the object through concepts of it), even though in fact the judgment is only the aesthetic and refers the objects presentation merely to the subject (54). It is not based on qualities of the artwor k, but instead in the method of experiencing of the object. Hume presents us with a similar idea. He believes that there is no authority beyond taste for the evaluation of works of art. A standard of taste, however, can be derived from the workings of th e mind (Hume 77). His theory basically states that there cannot be drawn any universal theory explaining how art functions since each person will perceive it differently. In contrast to Kant, he believes that not everyone is equally qualified to judge art works. Though the principles of taste be universal, and, nearly, if not entirely the same in all men; yet few are qualified to give judgment on any work art, or establish their sentiment as the standard of beauty. The organs of internal sensation are seldom so perfect as to allow the general principles their full play (Hume 87). He believes that a well trained critic is the best qualified to offer an accurate judgment of the value of the artwork, though a true judge in the finer arts is observed, even du ring the most polished ages, to be so rare a character (87). The average consumers imperfect judging facilities makes their judgments arbitrary. To Hume, the finer motions of the

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New College of Florida 2010 Katikala 15 mind are of a very tender and delicate nature (81) and an artworks value thus, changes greatly from minute to minute even in the same person. Though Hume believes that characteristics in the artwork are responsible for evoking our appreciation of them (unlike Kant who claims that appreciation is based in the viewer s orientat ion towards the object ), the qualities we notice and the degree to which we appreciate them vary so greatly from individual to individual and even within the same individual, it is practically impossible to have a standard for taste (except for the very ra re critic). Hume describes the subtleties in taste as such: One person is more pleased with the sublime; another with the tender; a third with raillery. One has a strong sensibility to bl emishes, and is extremely studio us of correctness. Another has a m ore lively feeling of beauties, and pardons twenty absurdities and defects for one elevated or pathetic stroke. The ear of this man is entirely turned towards conciseness and energy; [whereas] that man is delighted with a copious, rich, and harmonious expr ession (89) Relevant Hypotheses for Economic Analysis These two philosophers seem to capture the idea of an art for arts sake aesthetic value. However, i f we are to study a esthetic value economically then the theory must provide some method of measur ement. H erein lays a huge problem for empirical analysis since most aesthetic theories are insufficient to provide us with the basic minimum for testing. To consider a theory for empirical analysis, it must have the following: 1. There must be a need sat isfied by artworks. For something to be demanded there must be a need for it, since the consumer has opportunity costs. The dollar could have been spent on a

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New College of Florida 2010 Katikala 16 number of other things, but the need is what influences one to purchase a CD instead of additi onal food or even saving the money. 2. There must be a reason, implicitly or explicitly stated, for changes in demand. To analyze a theory economically, there must be an accompanying theory of when the need for artworks is satisfied. After one purchases a CD, how does that affect their future demand for the next CD? If the need for the CD is conversational value, for example, then one will purchase CDs more when they need more cultural consumption capital and less when they already have a lot to talk about. On the other hand, i f a theory fails to account for the causes for changes in demand, the concept is insufficient for empirical analysis. If a theory implies that there is a need for artworks without specifically stating what in the artwork satisfies that need, we have a theory describing a market based on the unexplained caprices of consumers, making experiments and studies irrelevant for study. This was where the early economists found frustration in aesthetics, for though the aestheticians described the need the concept was not developed fully enough to be meaningful for study. 3. These changes must be measurable. For the theory to become a hypothesis, it must be falsifiable. The patterns of the arising and satisfying of the need for art must result in some effects over others for it to be meaningful. For example, when Hegel describes art as representing the zeitgeist, we can possibly understand the demand for art to be based on the strength of the current zeitgeist, the culture, and the artworks representation of that zeitgeist. However, if we are to begin empirical testing of this, we have nothing to measure the spirit of the times or the artworks relation to it except for our subjective judgments.

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New College of Florida 2010 Katikala 17 These are required for empirical testing of theor ies of aesthetic value but this does not mean that the above assumptions are true. It is possible that art functions in such a way that a theory following these assumptions would be unable to be correctly made One possibility is that the changes in demand rise and fall according to whim and caprice of the consumer, as Adam Smith or Hume described ( Blaug ) In such a case, any patterns observed would be meaningless, since the underlying cause is inherently sporadic. It is also possible that aesthetics hasnt reached a point yet where the theories are detailed enough to fit these three requirements. It is important to keep in mind that the correct theory of our demand for artworks could either be undiscovered, looked over by this thesis, or inherently unable t o fit the requirements for empirical testing. The idea of art for arts sake is insufficient on the basis of not satisfying the second and third requirements. We end up with the problematic idea of a capricious need in the consumer. Instead, I will focus away from trying to decide on what pure aesthetic value is and instead focus on the value that consumers have in consideration when consuming artwork. The theories below are supported by economists and aestheticians in sufficient detail to satisfy the r equirements for meaningful empirical analysis and interesting conclusions for aesthetics. The Value Systems I will look at the need to be satisfied in the three general ways as follows. Conversational value describes artwork fulfilling a need to relate t o others; artwork is used in connection with its historical context and can be interpreted as an artworld in which we share a common experience. The value of the artwork is in its ability to provide a potential conversation and to provide shared symbols for cultural value. The second value is what I will

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New College of Florida 2010 Katikala 18 refer to as emotional value where, briefly, the artwork is valued for certain artistic qualities inherent in the artwork. The need can vary according to genre, but consumers tend to value quality within t hese genres in a similar way The third value that I will look at in my analysis is a theory by Bianchi that looks at the collection value of goods and services, or in this case, artistic products. The value of the artwork is in relation to a personal coll ection based on manifested patterns creating high artificial comple mentary values for artistic products. The need is artificially created and the artwork is valued for its ability to add to a set. These hypotheses are not entirely mutually exclusive but ea ch has measurable outcomes of consumers following each of these patterns. In the case that none of these uses seem to be relevant to the consumption of art, we will return to the idea s of the traditional accounts of aesthetic value which imply that finding commonalities in artistic needs is not a fruitful endeavor. Section 2.1: Conversational Value Basic Concept The conversational value of an artwork is its usefulness towards positioning the consumer for social interaction specifically through discussion Art and its related elements provide us with a topic to debate and converse about, intertwining us with others on a common topic, ultimately satisfying the need for better conversation Theoretical Background For some philosophical background to conversa tional value, we can look at the history of the conventionalist definition of artwork. Conventionalist definitions of creative goods come in two varieties, institutional and historical. Institutionalist conventionalism, or institutionalism, a synchronic vi ew, typically holds that to be a work of art is to be an artifact of a kind created, by

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New College of Florida 2010 Katikala 19 an artist, to be presented to an artworld public (Dickie, 1984). Historical conventionalism, a diachronic view, holds that artworks necessarily stand in an art historical relation to some set of earlier artworks (Adajian).The overall idea of conventionalist definitions is that art relates to other artworks and the value of an artwork is its relationship against other artworks. This implies that art has no inherent proper ties that make it art; it is art only because it is properly related to previous artworks. The philosopher Danto gives us the term artworld, which is influenced by the introduction of ready mades, like Marcels DuChamp into the artistic community (Ross 3 69). He begins by arguing against art theories which demand an artistic identification or a statement that points to some part or property in the artwork which makes it determined as an artwork. In describing this artistic identification he says, It is a necessary condition for something to be an artwork that some part or property of it be designable by the subject of a sentence that employs this special is (Danto 475) The is refers to the qualities of the artwork which defines it as an artwork. He argu es that artistic identifications tend to be contradictory because many of these artistic identifications include or exclude artworks that another artistic identification would not. He then states examples of abstraction and avant garde artworks which achi eved abstraction through rejection of artistic identifications, returning to the real world from which such identifications remove us His identification is dependent upon the theories and histories he rejects (Danto 477) In this, he says that the differe nce between an object and artwork is the theory that takes it up into the world of art, and keeps it from collapsing into the real object which it is (479). The theory requires knowledge of the history of artworks (479), and thus a work is artwork only w hen it is brought into the artworld by appropriate theory and discussion

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New College of Florida 2010 Katikala 20 by informed consumers who know the works context within the artworld. From this we can gather that artwork gains its status by the critics and the theory that backs up the artwork an d that brings it into its place in the artworld. The conventionalist theory of art shares Dantos theory in the sense that what is art is relative to its social and historical position in relation to other artworks. This alone, however, does not explain the demand side of mass produced artworks, for Dantos theory describes the identity of an artwork as an artwork into view by artistic consumers. The artworld gives us a social setting in which we can discuss the nature of art. By speaking about our tastes and opinions of various artworks, ranking them, and discussing their merits and shortcomings (what Caves calls conversational reciprocity) we gain utility from artworks, regardless of our liking or disliking them. The utility is the stored knowledge and experience of artworks and our participation in the artworld by comparing them to others. Hence, we see controversial artworks offer more utility than noncontroversial ones since they offer more conversation potential, and thus the most conversational uti lity. Conversation To consider this more economic ally Caves asks us to think of the social aspect of art as cultural consumption capital the conversational and social utility to be derived from art (Caves ). In buying artwork, we are essentially invest ing in culture and we use that as cultural capital to be later used in social situations. This cultural capital, with sources other than just art (like sports or news) is useful in bonding with others. This is to imply that art has no inherent value other than to offer some arbitrary topics that people can relate to. This occurs on the small scale with cliques that share a common music taste while on the large scale, American

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New College of Florida 2010 Katikala 21 culture includes some sense of an artistic commona lity that differs with that of I ndias for example. For mass produced artworks, as opposed to nonmassproduced artworks, we might observe a difference of there being a lack of power by critics and theorists. The discussion isnt restricted to the elite who have discovered a potential new artist or movement. With mass produced artworks, everyone is open to experience the artwork and has access to it. The theory backing the artwork must be understood or at least discussable by a large number of consumers when it is mass produced, so t hat a great number of consumers will purchase the artwork. The role of theory might be supplemented by the idea of discussion; the difference being that the authority of the critics is substituted or supplemented by the everyday discussion of individua ls. We will use the word discussion to emphasize the role that everyday consumers have on each other by offering opinions on artworks the way critics do, though the term discussion will include theory as a subset. From Danto and institutional convent ionalism, we can understand the potential of discussion being important to artwork. Discussions involve more than just the viewing a single artwork, though; many factors can go into having a discussion. First, knowledge of the history of the movement, genr e, artwork, or artist would offer more to the conversation of the artworks context. In this way, all one needs for a discussion of artworks is knowledge of that artwork and related works to compare. For example, two individuals might get into a discussion about whether the Beatles or the Doors are better. The discussion potential can come from the artworks relation to other artworks. An artwork that challenges a genre, begins a new movement, or is representative of a movement will have greater discussion potential than

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New College of Florida 2010 Katikala 22 simply an artwork that is technically good. This fits well especially with contemporary artwork which challenge the definition of art altogether. Alternatively, one might be able to discuss artwork in relation to its subject matter, like fo r example, a movie about the Sierra Leone diamond conflict in Africa might give us some idea of what that country is like and the life of people who live there. The artwork has the role of revealing a world that had been previous unnoticed in such a way. A lthough the discussion isnt about the art, the artwork would give us new material to discuss by revealing a new perspective. The artworks context when discussing the subject matter is still very important here, for the new perspective would only be new i f not already predominant in the artworld. For example, a new work of literature describing the holocaust would most likely not offer us very much discussion today, for there are already countless works that have been released on the subject. An already we ll established book on the topic (like T he Diaries of Anne Frank ) would offer more discussion potential than a new one presenting similar ideas and themes. Need satisfied by cultural/conversational value The ultimate need satisfied by ar t when viewed thro ugh its conversational value is bringing us closer to others to help in the formation of cliques, conversation, culture, and relative identity. This implies that the art has no inherent value, but we merely use it for the sake of having something to talk about and relate to with others. If the art isnt shared conversationally it is ultimately worthless. On one extreme the artwork is not even considered an artwork from not having a conversational foothold (or a backing discussion) in the artworld; it is n ot considered artwork at all. On the other hand, we tend to notice that controversial works or works by controversial people tend to sell more than noncontroversial works. This might be

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New College of Florida 2010 Katikala 23 explained by the theory that their increased discussion potential giv es them more value as artworks. Rosseau thought heavily about the social aspect of art, contrasting the need fulfilled by artwork to bodily goods (individual rationality) and luxury needs (which correspond to selfish social relations of power) (De Marchi and Goodwin 41). For Rosseau, art requires a strong and unique social component, forces mutual dependence and sometimes symmetric dependence. There is a utility to be derived from this development of an equal social field (what we might refer to as the art world of mass produced artworks). Rosseau states art is one of the few cases in which man shares a mutual interest that justifies him relying on others which dont involve a one way dependence (aka relations of power). However, mutual interest and coopera tion are very transitory and requires empathy and imagination which are instigated by mutually dependent economic systems, which he believes to be education and art, since authority is minimized in these fields of information and the artworld (48). Art allows us to see the self common to the whole, to have empathy for anothers situation by the communicative power of art, and thus, functions as an agent of social morality. Perhaps Rosseau felt a bit too strongly about the abilities of art, but his perspectives allow us to see some potential consequences of art as a mutual field of discourse. Under this system, art is seen as an investment into culture and a binding force. The motivation (whether conscious or not) in buying artwork would be to share c onversation, to discuss, or to theorize about it by having common ground with another individual. Art would be treated as a durable service, serving us with the tools to be more social. Under this value

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New College of Florida 2010 Katikala 24 system, art would not necessarily be the exclusive so urce of this cultural capital, since other things, such as sports, news, or gossip, could also give us conversational topics How people respond to art under this value system Ultimately, the properties of artworks treated by their conversational value wil l have several properties that well tend to see. First, artwork will be very culture centered since it is dependent upon discussions, which occur under a shared language. This means that art typically doesnt transcend cultural borders, e.g. Indian dance music wouldnt be consumed much by Americans. This isnt to be taken as a strict quality, for there are always going to be some common denominators between cultures, like for example, spanglish rap music from Miami which appeals to both Americans and the L atino communities. However, when art is in relation to other artworks conversationally, a different art history will lead to different discussions. The same artwork given to Americans and Indians will produce different results not only because of its langu age difference, but because of the artworks that it relates to in each artistic tradition. Conversationally, there are very different possibilities for an artwork; a Bollywood esque movie in America would stand out as more unique and conversationally inter esting than in India. Empirically, well see little trade of art between cultures that have vastly different art histories, like between the east and the west. Preliminarily, its fairly hard to predict how much art travels between cultures, since we see examples supporting both sides. Many books are translated into multiple languages, whereas, on the other hand, we dont hear much pop music in the US that is translated from other languages. The cause for culture specificity under conversationally valued a rtworks is that conversational reciprocity depends on the history and context of the artwork. When the artwork

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New College of Florida 2010 Katikala 25 is valued by its cultural relevance, external factors to the artwork can be of great importance. The authors fame and history is indirectly rele vant to artworks value as well as how it is marketed. For example, if Britney Spears does something controversial or conversationally interesting, like shave her head, well see a spike in her record sales. How do such events help define the artwork in any way? If the value of the artwork is solely its conversational value, then a work by a conversationally interesting artist or a well marketed artwork will come up more in conversation. We will speak of Britney Spearss new album more if Britney Spears is brought up in conversation more in general. Good marketing also greatly influences the actual value of the artwork. If the trailers to a movie has great buzz, the value of that movie will be very conversationally relevant regardless of the actual quality o f the movie. It will still brought up a lot in discussions; people who havent seen it ask if the movie is as good as its trailer and people who have seen it can discuss the lack of merits of the movie. Movies that people consider bad can still have very h igh conversational value. We would see the social need fulfilled by other topics, as mentioned earlier. This implies that consumption of sports o r news would function as substi tute goods. However, sports and media might also satisfy other needs as well, as original artworks can also be used as investments. Ultimately, if consumption tends to coincide with conversational value, artwork will be very complex to analyze, but theoretically possible. The value of one artwork will depend upon its conversation pot ential and context within the mass produced art world. These are not very quantitative qualities of an artwork but art can be fairly intuitively predictable. Also, the artworks context within the history of art is very relevant as well, as explained earli er. We can

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New College of Florida 2010 Katikala 26 look at how the artwork fits into existing body, the way most art critics do, to see its cultural relevance and conversational importance in terms of other artworks. Section 2 .2 : Emotional Value Basic Concept An artworks emotional value is the extent to which its qualities embody a genre or type of artwork. Each type of artwork has its intended result in the consumer and the artwork can possess to varying degrees the qualities that produce the intended result evoking a desired emotion The need satisfied is determined by the intended result of the artwork. Philosophical Background Emotional value shares some similarities to traditional accounts of aesthetic value. Each individual is affected by artworks on a personal level. They are trying to evoke emotions or have some sort of cognitive reaction to the artwork; in this case, an emotion or reaction common to a genre. With emotional value, we do not generalize the large variety of personal responses to artworks under a single heading of aestheti c experience or aesthetic value. Each genre evokes a complex combination of emotions and reactions which cannot a lways be so easily defined as anger, sadness, etc. The focus is not which emotions are evoked but instead the fact the response to the artwo rk is significantly common. This allows the consumer to seek out qualities in the artwork which can vary in quality in producing the intended response of the artwork. In contrast to traditional account of aesthetic value, the response is not so much dependent on the consumers orientation towards the artwork but instead the artworks ability to produce the desired the response. We separate artworks into genres and assume the consumer seeks genre specific responses, meaning that the need satisfied is genre specific as well.

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New College of Florida 2010 Katikala 27 Under emotional value, arts value is contained in the aesthetic properties of the artwork, not in culture. Emotional value looks at art as satisfying the strong commonalities of needs between consumers within markets of various types of a rt. We assume that the consumers of a ma rket are generally the same with respect to art. To say that qualities in an artwork evoke similar responses in people implies that we respond to artwork in similar ways and that we share a common need. One might ret ort pointing to the many different genres of art and how only specific genres appeal to certain demographics. However, this can be accounted for by separating the market into more specific submarkets. Parallel to consumers who enjoy only non spicy food or only homes in tropical climates, we see some degree of taste, but one that can be separated into different ways of satisfying the same need. By stating that the value of the artwork is found in qualities in the artwork, not in historical, social, or person al factors, we can place the quality of the artwork on a linear scale. The more strong the qualities that produce the desired experience, the higher quality the artwork and the more it will be demanded. The assumption that we share similar or identical needs with respect to experiencing certain emotions or effects of artworks fits nicely with the fundamental economic assumption that we are all to be treated as rational actors. Consumers of mass produced artworks are treated under emotional value in a sim ilar way that most other standard goods are treated. W e can treat art as we treat typical examples of goods (bread vs. butter, cars, housing, etc) by assuming that the artistic consumption need is similarly sa tisfied by art working towards producing a cert ain experience. Which experiences ?

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New College of Florida 2010 Katikala 28 The obvious criticism is how does one determine what experience an artwork should produce ? In some cases, it can be ambiguous, like what experience does a movie create ? Is the goal of a movie to make one cry or be scared ? Is it to tell a story? Is it just to evoke any type of emotion? Complex art and other ambiguous cases are difficult to classify uncontroversially. For example, a classical piece might create a range of emotions within the viewer. This is quite difficult to measure or to put on a linear scale. It is difficult and very subjective to say in many cases, but we can analyze the more difficult cases by narrowing down large genres, like movies, into smaller ones, like horror flicks. Here, the purpose of the movie is quite clearly to scare the viewer. A horror flick is valued to the extent that it can achieve this goal The horror flick serves the need of providing thrill and causing the emotion of fear, which can be substituted by other goods that create a sense o f fearful thrill such as a scary novel or a haunted house. It is very important here to state that, under emotional value, we assume strong a commonality between the consumers in terms of how art satisfies their need. We assume that everyone responds in th e same way to certain qualities of horror, like a subtle view of the killer in the background as the camera moves or dissonant chords playing in the background. Genres which explicitly state their function, like horror novels or teen comedies, are extremely common in mass produced artwork. As an art becomes more accepted, common, and away from the established standards, it becomes less formulaic. Perhaps it is inherently characteristic of mass produced artwork to be formulaic. How consumers treat ar t und er this value system For the sake of the economic analysis, it will be fairly easy to analyze art in this way. We construct functions based on the type of genre and the factors, or properties of the artwork,

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New College of Florida 2010 Katikala 29 which would be conducive to achieving the resul ts of similar works in the same genre. Distinguishing from the other two value systems, when the value of the artwork comes from within the artwork and not the consumers or other artworks, the artwork will function fairly similarly to typical goods once we determine the intended purpose of the work. In contrast, with conversational value, consumption of the artwork will not be dependent at all by qualities in the work and with the null hypothesis of traditional accounts of aesthetic value there is little t o no correlation between the qualities conducive to a good work since the consumers valuation of the artistic good is in his or her orientation towards it With conversational value, reading 4 out of 15 canonical books isnt the same as reading the most controversial 4, but in emotional value, it can be the same. This view takes us away from the idea that proposed by conversational value that each artwork is unique and horizontally differentiated in the eyes of the consumer. One artwork can be just as g ood as another, as long as its of the same type and general quality. As long as that artwork creates its intended experience, it wouldnt make much difference which artwork it is, the artist that produced it, or the works relation to other artworks. If o ne is assembling a playlist for a party, for example, it doesnt make much difference if a certain song isnt there, just that the songs are of a baseline of quality and they fill up the allotted time. We dont hav e to have specifically Jay Z on the playli st; o ther artists with songs of similar quality, style, and familiarity would suffice. Consumers would be indifferent between Britney Spears and Timbaland, so long as the guests of the party enjoy dancing to both. Quantity and quality are important here, not so much that particular artworks are experienced. This implies that

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New College of Florida 2010 Katikala 30 programs that utilize the Music Genome Project3It is possible that when economists tried to treat art like other goods, they had difficulty in determining the need that a rtworks fulfilled because they fulfill so many different functions. In this case, it would be theoretically possible to predict the demand for mass produced artworks if we could simply identify what need the artwork fulfilled and what qualities in the artw ork would be conducive to satisfying its role. like Pandora or last FM, would represent very well the emotional value system. By creating playlists based on the qualities in the selected music and finding similar music, the function of that genre would be satisfied, based on the accuracy of the Music Genome Project. Should emotional value prove to be exceedingly dominant, we might be able to expect a similar trend in other venues of ar t, like visual arts or movies, where a program can be programmed identify the qualities producing the desire experience of a genre. Section 2.3 : Collection Value Basic Concept 3 The Music Genome Project TM is a database of songs where each song has multiple characteristics or gene s (Glaser et al.). Each song is rated by a panel of music experts who categorize the songs based on over 100 characteristics. Using a complicated algorithm, it calculates similarities between songs which are accessed by user end software, like Pandora.

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New College of Florida 2010 Katikala 31 A pattern is followed to create a collection, not based on quality within the genre or social/cultural relevance. The value of the artwork is its contribution and it s serial position in completing the pattern. Artworks fulfill the need to satisfy the pattern of a collection. Philosophical Basis Earlier, it was mentioned that the experiment with Scribani showed that consumption patterns of original art were similar to that of collections of other rare luxury goods (306 De Marchi). The idea of there being value in collection was proposed, a bit controversially, by Marina Bianchi. Bianchi endorsed the idea that goods are consumed in terms of a collection and that the patterns which define the collection can change over time (275). Bianchi was not specifically talking about art markets, let alone massproduced art markets, but I will argue that her theory appears to be pretty applicable here. What is a collection? A collection is a set of goods that follow a rule. The collector begins creating sets without first working on a collection. Then, the would be collector must delimit the boundaries of the collection (Bianchi 276). For Bianchi, the pattern that is identified and enforced must not be inherent to the set of the objects but created. For example, a pack of refrigerator magnets which includes two of every letter in the alphabet is not a collection; the pattern is inherent in the objects. On the other hand, a set of ca nonical literature would be considered a collection, for the relations of the books to each other are not inherent to the books. The pattern of what is canonical would have to be devised. In some cases, the collection is suggested by the producer, as in fu rniture stores where the goods are presented by their matching sets, not by functionality (279). Bianchi calls the phenomenon where the goods are

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New College of Florida 2010 Katikala 32 already suggested to match each other as an assembled set of goods and goods that require one to make connec tions assemblable goods (280). Development of the Collection Pattern The rules of the ordering of the set may stem from style, fashion, moral, peer pressure, or personal history (Bianchi 279). Where the collections pattern comes from is of crucial im portance to us. First, we might see some strong overlap with conversational value or emotional value if we ignore where the collection set comes from. With the former, collections based on the conversational potential, collections based on fashion, peer pr essure, or relevance to dialogue, will be empirically indistinguishable from those buying artworks for their conversational value. We will exclude collections made on these bases from consideration to contrast collection value from conversational value. Si milarly, to contrast with emotional value, collections made based on the quality of the artwork in relation to its ability fulfill its intended outcome will not be considered as collections. What we are left with are collections not based on quality within the genre or social/cultural relevance. We can include collections based on artist, time period, director, etc. Artworks that are purchased but never consumed, like unused DVDs or CDs, are of specific importance here since their value is to contribute to the existing set. The second reason the origin of the collection is important for us is because of considerations of the utility of collecting. With Bianchis theory, there are two different and easily confused utilities for the artwork. The first is artwo rks value in relation to the set. The utility of the artwork is determined by the size of the collection and the artworks number in the set (is the eighth of the set or the last?). The artworks value is its contribution towards the

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New College of Florida 2010 Katikala 33 utility of a complete d set. The second interpretation is the value of the artwork can be considered to be its utility in providing objects to go through the experience of constructing an idea of a pattern. Some art professionals see no problem of navigation, and argue that the process of choosing is an end in itself (Dolgin 71). We can interpret the value of artwork to be its assistance in the utility of developing a collection. The act of developing and creating a collection pattern, however, doesnt seem to have a strong af finity with aesthetic consumption specifically. People collect stamps, chairs, luxury goods, furniture, and other more standard goods. Furthermore, it isnt entirely clear that there actually is a utility in discovering the patterns for the collection. In the case of furniture, we see demonstrated by the layouts of furniture stores that consumers can sometimes find more utility in having the collection decided for them. With recommender systems, we see that consumers can sometimes gain utility from having t he collection decided for them, but generally, consumers like to have some control over what is recommended. Other prearranged sets, like boxed DVDs tend to collections that the consumer would have chosen anyway and simply saves the consumer some money. We will only discuss the first sense of utility in collecting, that of utility in a completed set or towards attaining a completed set. An artworks value is in relation to the size of its collection and the artworks serial place within it. Collection in A rt Markets This theory might seem rather unlikely to prove as the dominant value system towards artworks. However, there are several reasons to believe that consumers quite often make collections with artworks. More so than useful goods, like kitchen appli ances or cars, artworks are often forgotten about and sometimes not even experienced. In the case of CDs, many songs

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New College of Florida 2010 Katikala 34 from CDs are not listened to, though the album is still purchased instead of the individual songs. Many online pirates download and store m ore movies, music, and software than they could possibly use. In most houses, you can find albums, DVDs, books, etc. that are underused, if at all. Add this to the number of houses with libraries, DVD collections, vinyl collections, etc, and you might beli eve that art is largely consumed for its collection value. Bianchi talks about environments where making collections would be most likely. Collecting can be a way to manage novelty in a scenario where there are an overwhelming number of options. Unbounded variety is noisy, incomprehensible, and unmanageable. Patterning, creating connections and contrasts, are strategies for reducing uncertainty and for economizing rational decision making (281). Art markets, specifically, seem to fit the conditions for co llecting best. In a market known for its nearly endless options of unique products, we can imagine that the consumer would be overwhelmed with novelty (Caves). However, Bianchi presents us an experiment which empirically shows an intuitive notion that too little novelty or too much novelty is undesirable. Collections allow one to manage the level of novelty to a comfortable level by modifying the pattern of the collection as needed. Art markets also are known having an extremely high level of uncertainty fo r the consumer. The famous Hollywood saying, nobody knows, refers to the fact that artworks are primarily experience goods, goods for which the consumer knows little of the value of the product before experiencing it (Caves). How people tr eat art under this value system Under this value system, we will see some subtle but interesting realizations in the market. The first is strong increasing marginal utility. The first few artworks consumed help to develop a pattern, giving them very little value. Once a pattern is established, the marginal

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New College of Florida 2010 Katikala 35 utility will increase until the last few artworks of the collection, which bring the consumer to a completed set. This means that many similar products are bought by the same consumer, often by the same artist, produce r, director, lead actor, etc. With increasing marginal utility, we would see the frequency at which the next item in the set is purchased increase. As the collection gets closer to finishing, the increasing marginal utility will influence them to quickly b uy the last few remaining items in the set to finish the collection. We will not only see a large number of consumers owning discographies, box sets, and similar items, we will also see moderate to high demand for rare and low quality artworks. For example, low quality recordings of a musician before they became famous, Christmas albums and side projects would be demanded for their contribution to the collection.

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New College of Florida 2010 Katikala 36 Chapter 3: Economic Direction Section 1: Background to art markets Several properties set art markets apart from more traditional markets To better understand the data under consideration, I provide below a brief background to the unique features of art markets. Differentiation Compared to typical goods like cars or washing machines, it is much ha rder to compare artistic products. Economists talk about two types of differentiation: horizontal and vertical. It is questionable whether artworks are vertically differentiated and it is difficult to determine the delineations to horizontally differentiat e artistic products. Multiple versions of a product are said to be vertically differentiated when all buyers agree on the rank ordering of the different versions, even though different buyers may have different valuations for the same version. For example we all agree that a highspeed Internet connection is better than a lo w speed Internet connection, (Penn State University Smeal College of Business) A clear test of vertical differentiation is obsoleteness. When one good can make another obsolete, the two goods are considered vertically differentiated. The better product can do all things the lesser product can do and more. If price were the same for both products everyone would choose one product over another. With mass produced art, we dont tend to see much obsoleteness. L imited edition CDs with bonus tracks or digitally remastered DVDs are clearly better than their less decorated counterparts. However, if we compare a song to a song, a

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New College of Florida 2010 Katikala 37 movie to movie, etc, we tend to lose the sense of one making ano ther obsolete. Even remixes of songs only changing a verse or two or abridged versions of books dont have a clear ranking over their original counterparts V ertical differentiation isnt apparent between s imilar units of artistic goods. The second way a product can be differentiated is horizontally. When products are different according to features that cant be ordered, a horizontal differentiation emerges in the market (Piana). The consumers preferences can be stable or unstable over time, but if ther e is no long lasting obvious consensus about the ranking of the goods, then the good is horizontally diffe rentiated. With art markets, it seems that not only are genres and types horizontally differentiated, each artwork might be horizontally differentiate d from one another. No two artisti c products are exactly the same. The degree of horizontal differentiation within a genre remains to be seen through testing of emotional value. Nonetheless, artworks are far more horizontally differentiated from each other than products of other industries. We notice the industry generally select s one price for all choices. CDs, mp3s, and DVDs generally all cost the same just as theater tickets are priced equally. Since there is disa greement about the ranking unequal prici ng would put the burden of deciding a ranking of onto the producer instead of the consumer. The difference in price would signify a difference in quality to the consumer in mass produced artwork a difference that the consumer may or may not agree with. Th ere is one possible exception to art being horizontally differentiated that might arise through our research. If conversational value proves to be dominant, then we can understand the good in terms of its social relevance and conversation value. Trends wou ld lead some artists

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New College of Florida 2010 Katikala 38 to the forefront, pushing others back, but it would be clear to all consumers which celebrities are hot at a given time. Artworks can become fairly obsolete in terms of conversational relevance and even availability, like CDs that are no longer for sale. W e can roughly vertically differentiate artworks if this value system proves dominant Choice and Information Art markets are also different from most other industries by having such an extensive number of choices Since artworks g enerally dont become obsolete, new artworks arent improvements but additions to market. New artworks are produced everyday by both famous artists and amateurs while very few artworks disappear entirely from, at least, the digital realm While some ice cream producers boast about having over hundred flavors, the music industry has billions of songs available to listen to, the TV studios boast thousands of TV series, the movie industry has millions of movies and films, and libraries often have an unreadabl e amount of books. Caves describes this as the property of Infinite variety in art markets (Caves 6). Even if you sleep only five hours a day and listen to music uninterruptedly for the rest of the time, you will only manage to listen to approximately 100,000 [songs] per year. Despite your heroic effort, you will be unable to check out even onefifth of the recording industrys annual output of over half a million tracks (Dolgin 76). P eople in fact spend a lot of time consuming artworks, with the ave rage person in the US spending around 3,500 hours (or around 9.5 hours per day) to media consumption ( including reading newspapers playing video games, reading magazines, and listening to the radio) (77). Yet the choices still greatly outnumber the amount a human can consume. When an industry

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New College of Florida 2010 Katikala 39 has such a large number of options for consumption, we must consider how the consumer navigates through these options and makes their choices. Herbert Simon, a behavioral economist who proposed attention economics p ointed out the problem of bounded rationality (Econlib, Behavioral Economics). Consumers dont always act rationally (making the consumption choice that maximizes utility) because of limited intelligence, limited time to think about the optimal choices, an d emotional interference. In the case of art markets, all these factors appear to be present With an immense number of options consumers of artistic products cant continue forever their search for artistic goods that match their preferences. Simons idea of bounded rationality takes into account the costs of searching. The search is terminated when the best of the options proposed excels the level of the demands being made, which itself is gradually adjusted in light of the options being offered (Dolgin 165). The consumer will not search for the best product but the best acceptable product before they get tired of looking. Aside from the huge number of choices in art markets, there are also problems of limited information regarding the quality. Artwork s are non repeatable purchases, in the sense that there is no utility for a repeat purchase Unlike ice cream, we cant return to the same flavor if we enjoy it. In the case of music, once we have a song, we dont need to purchase it again. It also doesnt give us any information regarding our next purchase. The next or previous album by the same artist is often not going to be of equal quality. Dolgin compares this information problem to eating out every meal but never visiting the same restaurant twice G auging the restaurants quality and fitting to your preferences will be quite difficult in such a situation ( 152).

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New College of Florida 2010 Katikala 40 Some, like Alexander Dolgin, believe that the producer has more information than the consumer regarding the quality of an artistic product. In such a case, we would have information asymmetry leading to adverse selection by consumers. This means that consumers will be influenced to purchase lower quality goods because the producer can overstate its quality. Others, like Richard Caves, believe in the Hollywood slogan nobody knows. What can the producer know about the success or quality of artistic good until it is released? Furthermore, artists tend to be intrinsically motivated, meaning that paying them more wont increase their productivity or willingness to be creative. The producer wont know if the artwork is of higher quality even if they pay for a more expensive artist. If there is a lack of information on both sides then we wouldnt see adverse selection ; producers would be trying to de termine which artworks are of high quality, managing large amounts of risk. Either way, the consumer has minimum cues to determine the utility of an artistic product before it is consumed. We will return to this later, when we talk about search and experie nce goods. Price and Risk Unlike most industries, t he price of mass produced artworks doesnt correlate very well to its utility or quality. I n selecting light bulbs, we would generally assume that a more expensive light bulb w ould be better than a cheap one maybe by lasting longer, using less power, or being brighter. Because of the lack of this price indicator in art markets, the consumer will have to look for other indicators, like advertisements, word of mouth, or reviews (Dolgin 98). These theoretical ly would have much more power in influencing a consumers decision than in markets where price correlates roughly to quality. Consumers also have to deal with a greater amount of risk in their purchases. The fixed price would theoretically be the expected value of the good

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New College of Florida 2010 Katikala 41 and bad artworks, making the true value of a good film, for example, worth the cost of seeing several bad movies. Dolgin believes that, including search costs and risk, finding a single pleasurable song costs around $30 and two hours of l ess than pleasurable listening. Section 2: Types of Goods When we look at artistic products, we not have to only consider strange features of art markets but also of idiosyncrasies of each type of artistic good. The demand for books is inherently different from the demand for CDs. The two main distinctions we should make between types of artistic products are the extent to which the product is a n experience good and the extent to which the product is durable. Last, each type of artistic good will have a dif ferent level of piracy that we should consider when considering the data Search vs. E xperience With artworks, we cant gauge very accurately the quality of the product before experiencing it However, the extent to which we have trouble is quite nuanced. On one extreme, s earch goods have features that let consumers easily know the quality of a product before it is purchased. At the other end are experience goods where experiencing the product provides no protection against future mistakes ( Dolgin 154). Artworks arent quite experience goods, but instead somewhere on the gradient between search and experience goods. What will be helpful here is to rank the different types of artistic goods according to their place on the gradient between search and exper ience goods. The ranking will be based on how informative one artwork can be towards a future project. De Valle already did some research into this and made his own rankings. We will borrow from rankings where possible,

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New College of Florida 2010 Katikala 42 though its incomplete. The ranking below is by De Valle, though the crossed out ones are irrelevant to our thesis and the italicized were not covered but added by me:

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New College of Florida 2010 Katikala 43 Pure Search Good Classic literature Radio, TV Newspapers Popular magazines Recorded music Movies Popular literature Opera C lassical music Theatre Ballet Pure Experience Good Roughly, series tend to be considered more as search goods since the good is subject to a certain amount of branding. For example, a local rock radio station will tend to play songs of a similar genre wit h talk shows in the morning and more obscure music late at night. A TV show will not only fit in the categor ies like sitcoms or dramas but also have some consistency to what each episode will be like. This ranking is important for our research. If we have enough data, w e might find that one value system is stronger with the goods that are more on the side of search goods and another value system is stronger when the type of good is more of an experience good. When one knows less about the quality of an art work beforehand, they might find other ways to gauge quality, affecting how the consumer values the artistic good. Durab ility The second factor we should consider in the good is its durability or how long the service of the good lasts. Once again, diffe rent types of artistic goods would have varying

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New College of Florida 2010 Katikala 44 degrees of durability. Investigation on why certain types of artistic mediums are more durable than others is outside the scope of the thesis but we can think intuitively of how many time we relisten to a so ng versus how many times we reread a novel. This ranking is a rough approximation based on personal experience. Not Very Durable (Low Repeatabilty) Books TV Shows Movies Music Durable (Highly Repeatable) Briefly, the reasoning for this ranking is the foll owing. Songs or albums are often listened to man y times A study provides empirical backing showing that at least up to a frequency of 8, there was a significant positive relationship between exposure frequency and liking (Heingartner and Hall). Similar st atistics on movies were unable to be found, but we assume from personal experience that a movie is generally reused less than a song and more than a tv show since much of the value of the tv s how comes from the mystery of a slowly unrevealed narrative. Sta tistics of interne t tv viewing by NBC showed 26 percent of those rewatching a program they have already seen (Linder). With books, we use a combination of statistics to find comprable data. 77% of UK readers revisit books with 17% claiming to reread a book more than 5 times (Lea). The top 20 includes recent releases like Harry Potter and Lord of

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New College of Florida 2010 Katikala 45 the Rings as well as canonical literature like Pride and Prejudice and 1984 showing little difference between traditional and contemporary literature in terms of rereading .4 4 The UK's top 2 0 revisited reads are, in order, The Harry Potter Series by JK Rowling The Lord of the Rings by JRR Tolkien Pride & Prejudice by Jane Austen The Hobbit by JRR Tolkien Jane Eyre by Charlotte Bronte 1984 by George Orwell The Da Vinci Cod e by Dan Brown The Lion, The Witch and The Wardrobe by CS Lewis Wuthering Heights by Emily Bronte Catch 22 by Joseph Heller Notes from a Small Island by Bill Bryson To Kill a Mocking Bird by Harper Lee Flowers in the Attic by Virginia Andrews Black Beauty by Anna Sewell, Good Omens by Neil Gaiman and Terry Pratchett The Bible Hitchhiker's Guide to the Galaxy by Douglas Adams Bridget Jones's Diary by Helen Fielding Gone with the Wind by Margaret Mitchell, Great Expectations by Charles Dickens Though rereading appears to be quite frequent among those who read, only 57% of American adults had read a book in 2002, a four percentage point drop in a decade (Associated Press). Of those who read, the usual number read was seven books which is still a fairly small number relative to other types of artistic products. With such few readings per year, it is unlikely that the reader rereads more than one or two books per year. Considering the fact that tv shows are less of a time commitment we can estimate that books are reread less than tv shows are rewatched. W e expect almost all music liste ners to relisten to songs, most movie watchers to rewatch movies (though with less repetition than music), a lesser percentage of tv vieweres to rewat ch a tv show, and books to be reread with less frequency This isnt the most precise ranking but this rough ranking might prove relevant to interpreting the data.

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New College of Florida 2010 Katikala 46 Non market transactions Non market transactions (like p iracy ) also differ between varying t ypes of goods. In recent affairs, music piracy has been highly covered by media However, we must ask whether or not we should consider piracy of books by consumers illegally downloading e books. Exactly h ow extensive is online piracy for television shows? How much can we expect to be pirated when we look at something like record sales? To get an accurate idea of the demand, we should account for the demand that occurs in the black market. I will present a brief summary of extent of non market transactions in the various industries. The M usic industry Three econometric approaches with direct impact measuring showed similar results. Based on one analysis file sharing didnt have a significant effect on the supply of recorded music. T he effects of illegal dow nloading were simply too small to change the number or quality of recordings that they release (Felix Oberholzer Gee) For smaller bands, the probability of success is so low that file sharing wouldnt change incentives for music production. Another study shows that if files available on line were reduced across the board by 30%, industry sales would have been approximately 10% higher in 2003 (Blackburn) The third study showed very little evidence that file sharing reduces music CD sales in Japan (Tana ka) A survey based approach showed that the percentage of buyers among music sharers does not differ significantly from the non downloaders nor do they buy less music than those who download (Huygen et al). On the aggregate, however, we see a decline in t he record industry which looks as if it is at least partially on the decline due to piracy. Using detailed records of tran sfers of digital music files, one study found that file sharing has had no statistically

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New College of Florida 2010 Katikala 47 significant effect on purchases of the averag e album. Even the most negative point estimate implies that a one standard deviation increase in file sharing reduces an albums weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero (Felix Oberholzer Gee, The Effect of File Sharing on Record Sales) Overall, the situation seems to be a battle back and forth between the positive effects of previewing music and the negative effects of substitution by pirated music. The subtitution effect seems to be slig htly more influential than the previewing effect but in the end, it isnt as bad as record labels report S tatistics of legal sales might be mildly unrepresentative of actual demand but it doesnt appear to be a large enough problem to entirely disregard s tatistics on legal sales. Film Industry An economic analysis shows that obtaining an illegal movie doesnt affect legal purchases, though watching it reduces the number of DVD rentals and purchases ( Thorsten Hennig Thurau) Consumers are more likely to pu rchase a DVD when the consumer has downloaded but not watched the movie, suggesting that illegal downloads serve as at partial indicator of interest in legal consumption. There also seems to be some emotional and intellectual connection to a movie title af ter it is obtained illegally that influences one to purchase it legally. Still, the negative effects of file sharing outweigh the positive substantially. We calculate an overall annual industry loss of $300 million in Germany, which represents approximate ly 9.4% of the total industry revenues in 2005. Even when accounting for the assumptions of our method and sample, we consider these numbers substantial ( Thorsten Hennig Thurau) The implication is that the intention to pirate movies is far more significa nt

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New College of Florida 2010 Katikala 48 than actually following through. Also, t he industry is correct in claiming that piracy affects consumption negatively though they greatly exaggerat e piracys effects.5 Huygens survey based study showed film to be currently unaffected by free downloading, though theoretical fears are present6Book Industry The data here shows that around 20% in the Dutch population download films and games, compared to the 60% that download music (Huygen et al) Though DVD sales have been down, we dont see much difference in the num ber of people going to theaters nor do we see differences in attending movies between the demographics of pirates and nondownloaders. Overall, the preview effect seems to be fairly weak here, but is counterbalanced somewhat by the benefit of seeing movies in theaters, where the video and audio are of higher quality than at home. Data on legal VHS/DVD sales should be accurate enough for our purposes Print publishing has not seen a decline, but instead we notice flat sales over the past few years (Tennant) Ebook sales are considered to be r elatively inconsequential. E book sales in 2007 totaled $67 million of total sales of $25 billion e book sales are but a pittance of the total 5 Some industry representatives argue that each illegal copy represents a lost theater visit (Valenti 2004) an effect that is more than twice that of our ReLogit based estimate. Similarly, th e MPAA (2006) recently reported that industry losses due to piracy are $491 million in Germany per year, which exceeds our controlled longitudinal estimate by 73% (Thorsten Hennig Thurau) 6 The film industry has the added disadvantage that it is not in the nature of film consumption for viewers to quickly want to see the same film again. Free downloading therefore is more likely to result in substitution here than the music industry.

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New College of Florida 2010 Katikala 49 -something like a quarter of one percent (Tennan) Ebooks appear to not be replacing print very much. Also, the lists of the top pirated books are generally geek manuals, dating tips, and self help guides (Ernesto) Only four authors of literature made it onto the top 25 in 2009. Much of the piracy of ebooks c omes when the legal alternatives are plagued with restrictions like DRM and delayed digital releases (Ernesto) In general i t seems that piracy doesnt affect the book market strongly enough to affect our analyses We can look at data about legal sales as roughly capturing the demand for books. Consumers are expected to spend almost $33 billion on books in 2001. $15.2 billion will be spent at general retailers, $5.8 billion on college textbooks, $3.9 billion on el hi textbooks, $1.6 billion by libraries a nd other institutions, and $4.8 billion direct to the consumer from the publisher (Kremer). This shows that a small but consequential percentage (4.8%) of sales are from purchases by libraries. However, the purchases made by libraries are worth far more than consumers, since they are experienced many times and may detract from the sales of the general public. L ibraries tend to purchase more trade books than the general public, since an average consumer would not have great need to own reference material. Further information about libraries would be helpful though an in depth study would be out of the scope of this theis We should remember to hold caution when considering sales statistics of books. A table is presented below showing where consumers acquir e book s

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New College of Florida 2010 Katikala 50 Where readers obtain books Buy: Bookshops 7 5% Buy: Internet 72% Buy: Secondhand 60% Borrow: Public Libraries 52% Borrow: Friends/Family 52% Buy: Supermarkets 48% Buy: Catalogues 12% Other 8% (The Booksellers Association) Television Indu stry In television, piracy seems to be extraordinarily huge. F or two shows in the top 10 [pirated TV shows], the number of downloads on BitTorrent has exceeded the average viewership on US television (Ernesto, Top 10 Most Pirated TV Shows of 2009) Many downloads, however, are from abroad, where the show may not be released legally for months after it is released here. A 2006 survey by BBC shows that though 77% of people havent watched TV shows online, 43% of those who do watch television online watch l ess no n online

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New College of Florida 2010 Katikala 51 television as a result (BBC/ICM) Since the survey was in 2006, we might expect t he number of people watching TV online to be higher now. Overall, it seems that demand for TV shows will be difficult to gauge. Not only are there legal and ill egal online ways to acquire the show online, the number of viewers for a show on TV sets can be difficult to measure as well as the audiences engagement with material. Raw statistics on viewing such as Nielson Ratings should be avoided unless the study ac counts for the estimated illegal consumption. Section 3: Data we are looking for Now that we have clarified what we are analyzing and why, we can consider what kind of data we w ill be looking for. To fully understand the demand for these goods, we have to consider the indicators which would imply the underlying motivations described by the three hypotheses. Since the value systems arent mutually exclusive, we will describe the type of data that will ideally support each type of value system. The opposite of the supporting data will be considered data against that hypothesis. Supporting Data Supporting data for hypothesis 1: Conversational value 1. Positive correlation with cultural/conversational importance The most obvious way to demonstrate conversatio nal value is to show strong and direct evidence that consumption of culturally or conversationally important works is significantly greater than works of similar quality and less conversational importance. Data for this will be difficult to find since it r equires quantification of cultural or conversational importance.

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New College of Florida 2010 Katikala 52 2. Demand strongly affected by WOM, Buzz, etc. If consumption is for the purpose of conversation, we should expect that conversation should greatly affect sales. Word of mouth should have a significant effect on consumption choices. 3. VERY high superstar effect Since only a few artists can make it to celebrity status and thus, conversational relevance, we should expect that these artists products will be consumed without any indication t hat consumers actually liked the product The superstar effect will be extremely high; ideally, consumers only operating on conversational value would consume almost exclusively familiar names. 4. Art as one of the top topics of conversation Studies of natural human interaction would include references to art quite frequently, if its purpose is to be used conversationally. 5. Weak cross cultural consumption When art is considered as a strongly cultural product (as opposed to one of a universal aesthetic ), we will see little importing and exporting of artistic products to distant cultures. Without the surrounding context and cultural relevance, the distant culture will not find much value in the artwork. 6. Increase in demand when artist receives publicit y When the artist comes into the spotl ight for any reason, whether its from television or tabloid appearances, the increased conversational relevance of that artist should be reflected in a large increase in sales. 7. Artworks are unique and noninterch angeable Similar artworks make for poor substitutes for conversation value. For example, if a conversationally relevant rock bands album is unavailable, other rock album s can t easily replace the conversational value it currently has.

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New College of Florida 2010 Katikala 53 8. Strong substitu tes with other entertainment goods, like news and sports On the aggregate, consumers should pursue conversationally relevant goods. If they decrease their purchases in artworks, they could replace the need for conversational material through politics, sports, or other conversationally loaded outlets. 9. Increasing marginal utility Each additional artwork provides the insight into the genre as well as a set of new comparisons with all previously experienced artwork. Supporting data for hypothesis 2: Emo tional value 1. Significant indicators of quality within a genre We should see measurable qualities of value for artworks. In opera, we might consider voice quality; in horror flicks, acting quality; in romance novels, the depth of the writer. These qual ities should correlate to success of the artist. 2. Personal/Internal motivations for demand In contrast to conversational value, we should notice the motivations for consumption to not be socially motivated but based on trying to create a personal emoti on/mood. 3. Decreasing marginal utility Once the emotion desired is achieved, then we might assume the consumer will not desire it as much for a while. 4. Weak brand loyalty If consumers are primarily pursuing a certain mood or emotion, they should be attached to the qualities which evoke those emotions more than the artist, the fame, the label, etc. 5. Effectiveness of recommender systems Under emotional value, recommender systems should prove especially helpful if the right qualities are identifie d for each piece.

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New College of Florida 2010 Katikala 54 6. Mood evocation Studies should show that artworks can evoke emotion to demonstrate that consumers might experience artworks to create these moods. 7. Clustering We should see a large amount of clustering, or groups of consumers matc hing with a group of songs/movies/etc. The similar qualities in the artworks should evoke similar moods; those pursuing similar moods would tend to enjoy similar artworks. Supporting Data for H ypothesis 3: Collection value 1. Strong brand/artist loyalty A quite easily identifiable collection would be discographies or collections of all the works of an artist/director/actor/etc. If people continue to consume artists despite great changes in style or popularity, this might indicate that the consumption is m erely for finishing the collection. 2 P reference for tangible media and ownership Wanting to own hard copies despite significantly cheaper and easier to acquire digital copies might indicate a utility associated with a tangible library 3 Unused artisti c goods If purchasing only for consumption, then consumers may not consume all of the goods since their motive is merely to have it to finish their collection. 4 Consumption exceeds experience of the goods Similarly, if consumers own more than they ar e able to experience, then it implies that they arent experiencing some of what they are purchasing, implying that experiencing the good wasnt the motivation for purchasing it.

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New College of Florida 2010 Katikala 55 5 Identity reinforcement If people treat the artworks as an extension of themselves and their personality, then they may not have to even experience it to decide it needs to be a part of their lives. What kinds of sources to consider ? Our research will involve several types of data. The first is research in Uses and G ratifications or U&G. This is mass communication research approach started in 1970 that focuses on the audience as goal oriented in the media use instead of the traditional model which treated the audience as passive (Rossi) This theory is generally actualized by surveys asking questions about why the consumer consumes certain media. The questions revolve around finding out how the media is used, what needs it satisfies, etc. For example, a Uses and Gratifications survey might ask viewers of television if they t alk about TV shows with friends, if they talk about the show to start conversations with strangers, or if they rarely talk about shows. This kind of approach provides very useful data for our research, though it carries with it the downsides of surveys and self reporting including potentially leading questions, dishonesty, nonresponses, and inability to self analyze. Because of this, we will use several other types of data. There are some econometric m odels representing art markets and media. These models provide insight into trends in the various industries but are limited by the selection of parameters. The assumptions made by the model must be noted for they may disagree with the assumptions made by the thesis. Though the conclusions tend to be specific, they often take into account nuanced f actors such piracy, age, and gender Econometric models will be useful but limited in helping resolve the questions asked by this thesis.

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New College of Florida 2010 Katikala 56 We will also look at various experiments and scientific studies These have the benefit of isolating a few factors from extraneous influences, isolating human behavior. The majority of studies tend to be irrelevant but some information on how humans react to media and stimuli will be very useful when coupled with the other types of data. Psychological studies might help reveal inclinations in humans that will help determine their motivations in consuming artworks. Last, we will look at raw data in charts and graphs. The data often will not take into consideration some relevant factors. For example, data of the sales of books over the past few years will not take into consideration income of the consumers. When looking at this data, I may have to interpret the meaning of the numbers and point out what factors are being left out by the n umbers given. Often times, however, the data are presented within a news document or an abstract which offer their own interpretation of the data, which will be helpful. Each ty pe of data has its shortcomings but by using them together we can begin to understand the motives and needs of consumers. The primary relevant data for conversational value and emotional value will be U&G research and econometric models whereas psychological studies and statistical data will be most useful for collection value.

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New College of Florida 2010 Katikala 57 Ch apter 4: Research P resented below is a detailed summary of the research, along with interpretations of studies relevance and strength to wards the thesis. I organize the studies by which hypotheses its conclusions support Where relevant, shortcomings of t he effectiveness and relevance of various studies are noted. Section 1: Conversational Value Cultural/conversational importance It is greatly debated whether television has an effect on its viewers, especially children. A study observed whether this effec t is positive or negative overall. Looking at educational content and entertainment content, they found that e ntertainment can be positive since it sometimes gives us repeated exposure to popular cultural figures, increasing our cultural literacy (Patterso n) The article uses Anamaniacs as an example, comparing the cultural references in the show to cultural references in educational shows. Some entertainment shows proved to be helpful by assisting with cultural literacy while others provided almost no cul tural references We have from this experiment evidence that cultural symbols can sometimes be learned from entertainment television shows, meaning that entertainment television can at least sometimes help provide us with material to talk about. This also lets us know that entertainment shows sometimes dont provide us with cultural symbols and references. Another study focused on our preferences based on the ratio between how much time we want to spend doing certain activities versus how much time we actua lly spend on these activities (Koster and Arroyo) Its important to note that this study was from 1995, so the

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New College of Florida 2010 Katikala 58 results may no longer be relevant The ratios below are real times spent on the activities over ideal time expenditure on free time. Basically, the number represents how many times more than desired we spend doing that activity. Watch television 2.8 Radio 2.5 Be with the family 1.9 Read books, listen to music 1.9 To play sport 0.9 Go to the cinema 0.9 Go to the theatre 0.4 Play music instrument 0. 4 The study interprets anything with a number greater than 1 to be embarrassing actions and below 1 to be reputable activities. What we can take from this is that, even in 1995, we consumed media more than we wanted to. Watching TV listening to the radio /music, and even reading are all considered embarrassing at the levels that people do them. This suggests that consumers arent considering using all of their media consumption for talking purposes; indeed, they think they spend too much time and it s im plied that they might want to hide the extent of their consumption. This embarrassment suggests that the reason for at least some of our artistic consumption is not for social reasons.

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New College of Florida 2010 Katikala 59 An interesting uses and gratifications research project took into consi deration the level of phenomenological depth of involvement when experiencing media or other activities ( Dervin) They use a scale of 1 to 3, where 3 means the consumer is mos t involved in the media and 1 means the consumer is least involved. The depth a t which we consume media gives us great insight into the nature of our consumption and preferences. The table below explains the definition and frequencies of the different uses and gratifications i dentified by the study

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New College of Florida 2010 Katikala 60 The study analyzes 5 channels: T elevision, newspapers, radio, books, and interpersonal communication. For the purpose of the thesis, only television, radio, and books are relevant here though it will be helpful to compare how these more artistic media are treated compared to more informa tion based media like newspapers. The results show that for the 5 channels,

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New College of Florida 2010 Katikala 61 shallow viewing (d epth 1) of media channels ( TV newspapers, radio, and books) is far more effective for satisfying surveillance needs than interpersonal communication at any level (as identified in the table above) Only media used shallowly satisfies surveillance needs, with the effect being strongest in TV and newspapers Relationship/communication utility shows that interpersonal contact is significantly more useful in satisfyin g this need than the media channels. Also, there was no significant difference by depth although an examination of the cell means and line plots suggested a tendency for the channel differences to disappear as phenomenological depths increased. Though re lationship/communication value isnt quite the same as conversational value, shallow conversation satisfies this need better than media outlets. Our media consumption might prepare us for interpersonal contact, but the fact that interpersonal contact satis fied social needs much more than media outlets shows that consumers dont have social/communication reasons in mind when consuming artworks. With personal identity, respondent reports of this gratification increased by depth -from a low of 15.0% on av erage at depth 1 to a high of 25.3% at depth 3. People named this as the highest gratification for television at depth 2 while newspapers are highest at depth 3. Interestingly enough, depth 2 was highest for interpersonal contact. Still, there was no stat istical d ifference between the channels. Mood management, diversions and relaxation, acquisition, and reinforcement all showed no statistical differentiation by channel or depth. We learn from this study that s urveillance is dominant in media while the best thing to fulfill the need for relationships is by far interpersonal communication. Depending on how people use the information they gather and how personal identity formation works exactly,

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New College of Florida 2010 Katikala 62 there is still the possibility that the information taken fro m media (surveillance) is used for conversation and thus building personal relationships This study provides potential evidence for conversational value, though certain interpretations of their phrasing prevent it from giving us definitive results. The st udy also suggests that there isnt much difference between the needs satisfied by various media, since they satisfied needs similarly for most gratifications. There are many studies about the moral e ffect of television on children with the general outcome of proving that children are affected by TV (Sanders, Montgomery and BrechmanToussaint) By affecting the development of the morality of children, television proves to be informative, teaching certain social norms and conventions. These norms and conventi ons might assist in conversation by teaching a common ground on which to speak. However, this evidence doesnt suggest that the motivation for children to experience artworks is for communication. A 2009 study focused on television viewing habits investig ated everyday television watching practices in 14 households over 2 weeks through diaries and in home interviews. [Th e y] took a broad view of television watching that included watching films, using the television as background noise, and watching recorded shows from various devices. [They] found the integration of television into the household partially explained by the ways it can be shaped to fill plastic time, the time of activities that are interruptible and can expand or contract to fit between other a ctivities (Irani, Jeffries and Knight) The study s analysis of rhythms and placiticity in television watching showed that c onsumers tend to make deadlines for themselves and are satisfied as long as they watch the show before the discussion time. More ra rely, consumers find value in watching in rhythms (as something like family time), but this only accounts for a smaller portion of television viewing. This strongly supports conversational value,

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New College of Florida 2010 Katikala 63 since it implies that people time their television viewing i n accordance with the conversations about them. Strong effect by WOM and Buzz One study looks at shocks based on nonartistic factors. E xogenous peaks (the term they use for these shocks) are from situations like appearing on a TV show to promote a book, which results in an immediate peak in sales and then a sharp decline (Deschtres and Sornette) The table shows the shocks by exposure on various outlets, showing a tiny peak immediately after exposure and a sporadic decrease afterwards. On the other hand endogenous peaks are based on exposure and word of mouth, which results in a slow increase in sales and a slow decrease. Exogenous shocks tend to be fairly predictable whereas endogenous shocks are pretty sporadic and often peak severa l times before decl ine. This is evidence against conversational value since it shows ENDOGENOUS SHOCKS 1

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New College of Florida 2010 Katikala 64 that word of mouth has a very weak effect. Consumers tend to rely much heavier on media exposure than conversation in their book decisions. (Deschtres and Sornette) A study on the sales of jazz albums shows similar results with music Though there are other important factors that determine an albums success that were not considered in this paper, such as the quality of music, the artists established fan base from previous albums, radi o airplay, success of the music video, etc., the results we found may imply that marketing before the start of sales of an album i s quite important since these patterns indicate that the higher the starting position is, the longer it will stay in chart (C hon, Slaney and Berger). The graph below shows the lifecycle of jazz albums. Though they left out a lot of important factors, the importance of the starting position tends to disprove that word of mouth is extremely important. As shown by Deschtres and S ornette a strong start and sharply declining sales implies exogenous factors, meaning that the advertisements and exposure is more important than WOM. In conjunction to the previous study, this implies that the release date is treated like an exogenous fa ctor and word of mouth is not very important. Weak evidence for word of mouth once again contrasts with conversational value

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New College of Florida 2010 Katikala 65 An analysis of blog ging supports the previous data on the weakness of word of mouth. The main results of our study indicate that music blogs cater to an audience that is different from the mainstream audience. We find that it is important to recognize these different audiences as the impact of music blogs is different in the two groups. For example, we find that blog influence is a positive and significant determinant of sampling in both the tail and the mainstream and that this effect is stronger in the tail. Similarly, we find that membership in a blog community is more important in the tail than in the mainstream, emphasizin g the importance of weak ties in spreading information about more obscure products. Finally, we find that sampling is positively associated with music sales in the full sample, mainstream and tail and that this relationship is stronger in the mainstream th an in the tail. Together, these results demonstrate that the effect of online WOM, particularly in the form of music blogs, depends on

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New College of Florida 2010 Katikala 66 the segment of consumers. They also demonstrate that the Long Tail effect is different for the different stages of the co nsumer decision process (Dewan and Ramaprasad) Word of mouth may be present more in niche and underground markets, implying that more obscure music will benefit more from the WOM effect than popular music. Estimates based on two alternative identificati on strategies show that sales increase when a book appears on the top list s However, the magnitude of the effect is modest, and appears to reflect spikes in the sales of books that were surprises on the list (e.g., books by new authors) (Sorensen) This suggests that bestseller lists are not very effective in the book market except in cases where the author would not have received any recognition otherwise. People mildly consider bestseller lists in the book market, though the moderate effect of familiar books and strong effect unfamiliar ones seems to imply that the increased sales are a result of exposure, not of purchasing the most popular books because they are popular. This is evidence against the superstar effect in books and thus against conversati onal value. Readers wont generally just consume what is stated as most popular (and thus, most easily to talk about). A study of Amazon.com and Barnesandnoble.com shows that an improvement in a books reviews leads to an increase in relative sales at tha t site and that generally the impact of one star reviews is greater than the impact of five star reviews (Chevalier and Mayzlin) Furthermore, the data show that customers read review text rather than relying on summary statistics. Scoping for negative re views implies that consumers generally choose their books on their own tastes ; they arent influenced so much by recommendations but warnings of books they previously guessed and expected to be good

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New College of Florida 2010 Katikala 67 Another study shows that i ncreasing the strength of so cial influence increased both inequality and unpredictability of success. Success was also only partly determined by quality: The best songs rarely did poorly, and the worst rarely did well, but any other result was possible (Salganik, Dodds and Watts) T his directly shows that word of mouth is used for showing consumers the quality of the artwork but has little influence on sales otherwise. Consumers still greatly rely on other factors. Uses and gratifications research generally doesnt support conversati onal value, though a study of why people watch soap operas shows that consumers might have a conversational use for soap operas: using it as a launchpad for social and personal interaction (Chandler). The term launchpad implies that soap operas are use d as a conversation starter, not necessarily as a main topic. This is mild evidence to support conversational value. Cultural products for children compose a large part of consumption. U nlike most adult books, sales of children's books tend to start slowly and, if they are good, build over time possibly implying stronger WOM effect for children (Kremer) Children's books have staying power and tend to be superb backlist sellers. Since childrens books account for one third of all book purchases, this shows that even the little evidence we see for word of mouth in books might be explained by children, which is an exception to the general patterns of consumption in books. The difference in consumption for childrens products might be because children and yout h arent as knowledgable and trained as adults in identifying qualities they enjoy in an artwork. Instead, the impor tance seems to derive more from socially driven factors than quality, such as a sentimental connection to a bedtime reading book.

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New College of Florida 2010 Katikala 68 Overall, we see far more evidence against word of mouth than for it There is only mild evidence to show that consumers consider the conversational value of artworks. Instead, the majority of evidence shows that consumers generally make consumption choices based on media exposure and might use word of mouth only to confirm the decisions they have already made on their own. Strong superstar effect In a 1991 study observing the quality of singing in popular music, the study concludes that consumers do act ually take into account quality (Hamlen) Based on previous literature of objectively measuring the quality of singing, they measured the harmonics in frequencies above 1.9 kHz for over a hundred singers. Though t he amount that consumers take into account singing abi lity is only moderate the view that the popular music industry is an example of the superstar phenomenon in the Marshall Rosen sense is not supported by the empirical evidence in this study (Hamlen) By showing that consumers consider quality in their m usic we have direct evidence against conversational val ue. See the table below to look at voice quality versus record sales.

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New College of Florida 2010 Katikala 69 Loktas law in relation to gold albums shows that there is a power relation between producing one gold record and many (Cox, Fe lton and Chung) A study shows that a n exponentially smaller number of artists will produce multiple gold records. This partially goes against the superstar effect, wherein wed see that the established artists will easily be able to capitalize on entry ba rriers and creating a situation where we see nearly all gold albums concentrated in the few artists who made it This superstar album was largely ignored in file sharing networks until it became available for sale in week ten of our sample. This sugg ests it is the publicity associated with an official release which drives downloads as well as sales. Notice also the rapid but non monotone decay in sales and downloads, which highlights the importance of using highfrequency data (Felix Oberholzer Gee, T he Effect of File Sharing on Record Sales). This clearly shows that consumers greatly consider the release date over other factors, including previous sales and

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New College of Florida 2010 Katikala 70 word of mouth In conjuction with other studies presented in the thesis, this shows that conve rsation is far less important than exogenous factors. The evidence is strongly against the superstar effect in books and music, greatly questioning the extent to which consumers consider the conversational value when purchasing artworks. Topics of conversa tion Rea ding into the top 50 trends on T witter, we find that three of the top topics are TV shows (6%), five of the topics are movies (10%), 7 are about music (14%), and 2 are book related (4%) (Cortesi) Total, there are 16 art related topics or 32%, com pared to 6 topics about products (at&t, iphone, etc.) or 12%, and 7 about politics or 14%. Twitters probably dont refect actual speech and thus, arts represeting nearly a third of the most common tweet topics should be considered only minor evidence tha t artworks are a major topic of conversation. Weak cross cultural consumption In the US, bestseller lists dont include works by authors of nationalities other than from the US or UK. However, in other countries, especially non English speaking ones, nond omestic and nonUS/UK authors can represent up to 54% (like in Austria) (The Booksellers Association) Overall, the percent of a countrys bestseller list that is consumption of domestic authors varies greatly. Authors from their own country are the most read in the majority of European countries, an average of 60%, but in the US it is as high as 91%. It seems that books are read primarily from countries of similar cultures or a shared history while in less culturally dominant places, they rely on world culture instead of local. Crosscultural consumption is weak for books except in those countries with less dominant cultures, supporting conversational value.

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New College of Florida 2010 Katikala 71 Placed against t he historical evidence of foreign film popularity in the 1950s and 1960s, new empirical data show that foreign film available on videotape appeal primarily to those with an already developed interest in foreign cultures (Ogan) This study shows that interest in foreign film stems from an interest in the culture, not something inher ent in the art itself. Th is supports conversational value since the foreign film consumption that exists comes from identification with that culture, not the artworks ability to transcend cultural borders. A Korean study shows that Korean consumers are w illing to pay more for home produced movies compared to imported foreign movies. It suggests that consumers differentiate cultural goods based on nationality and there seems to be a cultural bias in consu mption. [Their] estimate implies that the probabilit y of watching a foreign movie would increase by 87.5 percent if its cultural elements were replaced by Korean (Chung and Song) This is further evidence that cultural background is extremely important in the film industry. There appears to be good support for weak cross cultural consumption in books and film, supporting conversational value. S trong substitutes with other cultural goods A very detailed study of 18,000 households over several years shows interesting results for book demand. Books were also s hown to be close substitutes to other cultural goods (Ringstad and Lyland). Since books prove to be close substitutes to other cultural goods, we can assume that these cultural goods satisfy a similar cultural need which might be conversational value Summary

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New College of Florida 2010 Katikala 72 The evidence was strongest to prove against word of mouth and the superstar effect, disproving that conversational value is important in the consumption of artworks. There is also countering evidence for weak cross cultural consumption, supporting conversational value. The former is more directly related to conversational value since weak cross cultural consumption could also be explained by consumers finding personal relevance in goods containing familiar symbols and references. The remaining evid ence was back and forth. The strongest and most relevant data disprove conversational value. The remaining data that supports conversational value better proves cultures relevance to consumption decisions than illustrating that consumers consider conversa tional potential as an important factor in artworks. Section 2 : Emotional Value Aesthetic indicators within a genre A major focus for research into why and how people watch TV has been the genre of soap opera s ( Chandler) Adopting a U & G perspective, Richard Kilborn (1992: 75 84) offers the following common reasons for watching soaps: R egular part of domestic routine and entertaining reward for work L aunchpad for social and personal interaction F ulfilling individual needs: a way of choosing to be alone or of enduring enforced loneliness I dentification and involvement with characters (perhaps cathartic) E scapist fantasy (American supersoaps more fantastical) F ocus of debate on topical issues A kind of critical game involving knowledge of the rules and conventions of the genre

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New College of Florida 2010 Katikala 73 Of these reasons, the majority are personal needs based on qualities of the work. The use of soap operas being a launchpad for social and personal interaction was addressed under conversational value. What should be taken from this is that all of the rest of the gratifications are personal needs. In another U & G study on soap operas, Livingstone identified a typology of fulfilled gratifications, including escapism, realism, relationship with characters, critical response and problem s olving, as well as found that viewers consider the characters and problems portrayed on soap opera as highly rea listic and personally involving (Dervin) Once again, i n soap operas, consumers tend to have personally driven motivations for watching With spontaneous pleasure reading, a study has shown that readers perceive literary merit to be inversely related to reading pleasure (Nell) While reading, there is a physciological arousal as well as a physciological deactivation. The study suggests that r eadings rewards are from shifts in consciousness, similar to hypnotic trances in ludic reading. This suggests that readers aim for personal needs to be satisfied, either by the state of mind or intellectual stimulation. Personal/Internal motivations for d emand An analysis of many U&G studies show that reading imaginative literature is regarded as a special activity which serves to satisfy a wide variety of personal needs ( Shef.ac.uk) The data suggest that reading identities are not fixed but change according to time and personal development. In addition, the nonreaders included in the research process acknowledge the potential benefits for those who choose to spend their time reading. The benefits identified by readers and nonreaders are generally ones r elating to personal life enrichment

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New College of Florida 2010 Katikala 74 A study of prison culture shows that even in an essenti ally mortifying environment, mass media can serve as a key source of empowerment providing a range of materials that help the confined to create new or maintain exi sting identities, explore their inner selves and find autonomy and self respect (Dervin) Mass media can help individuals find themselves and have personal growth, implying that qualities in the artwork are responsible for these changes. Our findings mir ror previous studies that find that television is often described to demarcate rhythms and phases of domestic life, such as waking up, coming home, relaxing after dinner, and going to bed (Irani, Jeffries and Knight) This experiment showed that this type of plasticity towards television viewing is not as present with entertainment programs as news or other types of programs. Using entertainment television programs to demarcate rhythms and phases of life is a personal need; artworks help in organization an d in various types of personal needs like stress release or making monotonous tasks more enjoyable Previewing and recommender systems Studies of recommender systems of films showed no preference for familiar recommenders. S imilar reco mmenders and recomm enders with a high rating overlap are strongly preferred (Bonhard et al.). Consumers want to find like minded people through recommender systems, not familiar ones. What is more important to consumers is identification of enjoyable qualities in the artwork providing strong evidence for emotional value. This also implies a desire and confidence in ones own taste; consumers look for reinforcement. This data may also support collection value. An intensive study by Libre Digital shows that previewing book chapters positively impacts bot h print and e book sales (The book business magazine) In fact, a n average reader

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New College of Florida 2010 Katikala 75 spends more than 15 minutes browsing a book. They also preview an average of 46 pages of each book they browse. The consumer is searching for something to satisfy them in the book, not depending on others. This supports emotional value as opposed to conversational or collection value Direct mood evocation Based on analyzing tempo, relative tempo, and silence ratio, we can predict some moods evok ed by music with some accuracy as shown in the tables below (Fend, Zhuang and Pan, Music Information Retrieval by Detecting Mood via Computational Media Aesthetics) Some emotions are easier to predict based on these qualities, though admittedly, the appro ach only considered a rudimentary set of factors and emotions. With more complicated analyses, we might see even higher prediction rates. The tables below show the effectiveness of predicting various emotions.

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New College of Florida 2010 Katikala 76 If consumers are sensitive to the mood evoc ation, it may imply that they pay attention to these mood changes when purchasing music; they may even be demanding a particular emotion. This is contrast to social value or collection value where the consumer demands information in the former and the mere object in the latter. I ndividuals reported themselves as shopping longer when exposed to familiar music but actually shopped longer when exposed to unfamiliar music (Science Direct) Shorter actual shopping times in the familiar music condition were relat ed to increased arousal. Longer perceived shopping times in the familiar music condition appear related to unmeasured cognitive factors. Music affected consumers mentally and emotionally, causing distortions in time perception. Listeners of music might listen to music for this time dilation, implying that certain qualities of the music are desired to produce this effect. One study demonstrates that unhappy people watch significantly more television even after taking into account education, income, age and m arital status (Live Science Journal) D ata suggest s that TV may provide viewers with short run pleasure, but at the expense of long term malaise This data implies that television affects mood meaning that consumers look for entertaining qualities to esca pe their realities. However, another study looked at alienation from mass media, or using mass media as an escape. Using standard measures of alienation, we found little evidence that alienated adults spend more time with the mass media generally (McLeod, Ward and Tancill) We can reconcile the data by considering increased television watching to be associated with short term pleasure while alienation doesnt cause increased use of other types of mass media.

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New College of Florida 2010 Katikala 77 U&G Research (Zillmann (cited by McQuail 1987: 2 36) ) has shown the influence of mood on media choice: boredom encourages the choice of exciting content and stress encourages a choice of relaxing content (Chandler) The same TV program may gratify different needs including development of individual pers onalities, stages of maturation, backgrounds and social roles. Developmental factors see m to be related to some motives. This shows that artworks can evoke moods and consumers make decisions on the artwork based on which mood they wish to evoke. Clusterin g One a rticle examines effectiveness of a model of preference based on specific product attributes and shows it to be more effective than predictions based on demographics (Hamlen) We can organize preferences based on attributes (genre, directing ability, plot complexity, etc) better than basing on groups or demographics. This greatly suggests that emotional value is more prominent in movies than social value since the correlations are stronger with the attributes of the film, not the peers. A study in Is rael provides several insights. The study shows that knowing oneself is best served by books; enjoying oneself is associated with films, television and books ( Katz, Haas and Gurevitch) However, in satisfying needs associated with the self, books are most helpful for the better educated while television is most helpful for the least educated. Film and television help maintain friendship and family solidarity while conversation with these people is best provided by newspapers and books. Television proves t o be the least specialized, while cinema is the most specialized (serving self gratification and sociability). Interchangeability works with the two closest neighbors as mediums. The circle goes from television to radio, newspapers

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New College of Florida 2010 Katikala 78 books, and cinema, bac k to television.This shows that books are important for socialization and for satisfying oneself, that film and television are not conversationally important, and that personal needs are satisfied by all types of media. Summary: There wasnt as much data for emotional value as there was for conversational value. However, the data found was much more direct. We found that uses and gratification studies primarily showed personal gratifications of artworks and that much of these gratifications are associated with personal development and identity. The evidence of mood evocation was moderately strong in supporting the idea that consumers tend to use artworks for the emotions they can cause. We get further support from data about clustering which shows that consumers organize music by attributes rather than demographics. Though the evidence wasnt very expansive, it was clear and direct support of emotional value. Section 3 : Collection Value Strong brand loyalty Multiple surveys show that in store displays are most effective to convince a consumer to purchase a book while in a bookstore while recommendations from family and friends is only responsible for consumption half as much (The Booksellers Association). However, surveys which arent focused on consumption while in bookstores tend to show that consumers first try to evaluate the book by themselves (based on a known author or style) and rely on word of mouth when such information is not available. This shows that consumers tend to rely on themselves in makin g decisions and take into account word of mouth only when they arent able

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New College of Florida 2010 Katikala 79 to do so. By relying primarily on known authors and styles, we might have an implication here of collection value. We see similar brand loyalty in DVD sales. T he actors in a movie have a direct effect on consumer choice, influencing especially the sales around release date (Ainslie, Drze and Zufryden) Directors have a more indirect effect, wherein they affect sales later on and more gradually. This loyalty t o actors and director s implies that there is some value in experiencing certain actors and directors This might be a sort of collection, wherein consumers like to collect actors and directors as a set. More direct evidence to support or deny loyalty was unavailable. Overconsu mption Some of the key findings from BIGResearch include: When watching TV, 66.3% regularly or occasionally read the mail. When watching TV, 60.1% regularly or occasionally go online. When watching TV, 55.0% regularly or occasionally read the newspaper. W hen watching TV, 51.8% regularly or occasionally read magazines. (BIGResearch) The multitasking while watching television implies not much involvement, and suggests only partial experience of the shows Though this sort of television is sometimes describe d as being in the background, it is more accurate to describe the television as something that can ebb in and out of focus as other concurrent activities demand primary focus (Irani, Jeffries and Knight) Television consumption is clearly seen as pri marily not given full attention to. If consumption is having the television on and bearing the costs of advertisements, we consume far more than we can experience.

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New College of Florida 2010 Katikala 80 Interestingly, we treat other artistic forms similarly. The average American spends almost half the twenty four hours on media usage; less active consumers use approximately five hours while aficionados manage seventeen hours (Dolgin 76). On average consumers spend around three hours a day listening to music (including those who dont listen to music at all). Since consumers have jobs, family responsibilities, and hobbies, this large media usage implies that consumers often consume media while doing other activities, meaning that only partial attention is given to artworks. If consumers arent even paying much attention to the artworks they consume, we might gather that they arent very interested in the content. That the content isnt very important to the consumer is an indicator of collection value; we care about ownership and have little pa ssion for the artworks contents. Tangibility/Ownership A study in the UK shows that t he average digital music collection all the music on a respondents computer or hard drive was 8,159 tracks. If we equate a single track as being 3 minutes in lengt h, that's approximately 17 days' worth of continuous music (Bahanovich and Collopy) Even in 2009, o nly a small number of respondents (4%) do not use CDs at all and 51% have fewer than 100 CD s. Survey and statistical data show a strong desire to own a physical copy of the media despite the increasing popularity of mp3s. The average number of CDs cons umers own has increased both in younger and older generations from 2008 to 2009. This data directly and strongly supports the importance of tangibility in m usic media. In multiple purchase SBS (success breeds success) an individual consumer pays to see a movie more than once, with the first viewing causing a desire for subsequent viewings (Thorsten Hennig Thurau). Although information cascading SBS effects have so far been stirred by

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New College of Florida 2010 Katikala 81 movies theatrical releases, we argue that they could be similarly created in other channels, such as DVD sales or VOD, if movies were released there first. Empirical evidence for SBS in a movie context has been reported by Elbe rse and Eliashberg (2003) and Hennig Thurau, Houston, and Walsh (2006) (Thorsten Hennig Thurau). The study basically shows that there are more comple mentary effects from releasing on various channels than negative. A theater release increases the number of purchases when it is release d on DVD showing that consumers have a strong desire for ownership even after they have experienced the movie. A n exclusive movie opening in DVD retail stores would not take full advantage of multiple purchasing behavior, beca use many of the consumers who would buy the DVD in such a retail premiere scenario would also have bought it after having first consumed the movie in theaters (or other rental channels). (Thorsten Hennig Thurau) Consumers like to own the product, despite having seen it. DVD purchases are more common than rentals for those who have seen the movie already. The graph below describes revenue based on various modes of releasing a new movie (Thorsten Hennig Thurau)

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New College of Florida 2010 Katikala 82 Summary The data for collection value was sp arse, though the survey of UK and the study of purchases of DVDs after viewing in theaters provided extremely direct evidence in support of collection value. We also have some indirect support through the evidence supporting brand loyalty. More studies on the topic would have been helpful in solidly confirming collection data, but the data we have is straightforward in supporting collection value. Some of the evidence found for collection value ended up falling under identity formation, since the studies im ply that the purchases and uses for the sets created would be for developing a sense of identity.

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New College of Florida 2010 Katikala 83 Section 4 : Identity Formation There was significant data to support the idea of personal identity, which was not previously considered as a prime value for a rtworks. Below, I will make references to studies already presented which imply that personal identity formation is a major factor in the value that artworks have for consumers. Uses and Gratification Research The idea for identity formation came up throug h U&G studies which frequently tested specifically for this. The phenom en ological approach to uses and gratifications showed that identity formation was an important use for media as well as gave supporting evidence from other studies that mass media helps to develop autonomy and self respect (Dervin). This study had the problem of bundling both information media and entertainment media, but we see supporting evidence from other U&G studies, including the two studies mentioned about soap operas and the Isra el study on various media channels (Chandler; Dervin; Katz, Haas, and Gurevitch) We also see further evidence from an experiment by Steele and Browns study, which provided involved in depth interviews and tours of adolescents bedrooms, concluding that a dolescents appropriate and transform media messages and images to construct their identitie s and make sense of their lives (Dervin). This implies that media consumption has much to do with developing ones identity. Finally, we see from the research of rec ommender systems that consumers prefer the recommendations of like minded people more than recommendations based on genre or familiarity to the recommender (Bonhard et al ) Age Identification

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New College of Florida 2010 Katikala 84 One study demonstrated that age identification and age identity gratifications (AIG) predict television viewing, particularly of shows featuring casts of similar age to respondents and themes close to respondents experience (Harwood) The social identity measures maintained their predictive ability when traditional dimensions of gratifications were simultaneously controlled. At one level this link may seem self evident. Respondents seek to view individuals with similar characteristics to themselves. However, the links from age identification and AIG to viewing indicat e that this is more tha n a simple universal desire to view characters similar to oneself (Atkin, 1985; Hoffner & Cantor, 1991). The desire varies with individual variation in endorsement of social identity measures. Hence, this result supports the idea tha t social identity reinforcement is sought by more highly identified viewers, but not by those less strongly identified Another study indicates th at group identification is associated with reasons individuals give for seeking out particular media experienc es (Harwood) A link was found from the preference for (artificially constructed) shows featuring younger characters to age identification. Those who expressed a stronger preference for the younger shows appeared to gain increased age identification as a r esult: The mere act of making a viewing choice may enhance ones sense of belonging in a group and be important to overall self concept. Actual viewing may result in more substantial effects. If the mere act of making a viewing choice enhances the idea of self concept, then we have collection value. However, if the actual viewing results in group identity formation, then we might conside r this data to support conversational value. Summary

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New College of Florida 2010 Katikala 85 Identity formation appeared again and again in the research, prompting investigation into identity formation as a prime value. Not only has the data have all strongly supported identity formation with no evidence suggesting that identity formation might not be important to consumers, but as we will explore in the conclusion identity formation explains much of the conclusions we gathered about the other value systems.

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New College of Florida 2010 Katikala 86 Chapter 5: Conclusion Section 1: Results Strength of Data As stated by several authors on the subject of mass produced artworks, th is is a largely ignored subject Hence, the data were rather sparse, indirect, and a fair amount of interpretation had to be applied to connect the results of these studies to the three (now four) distinctions. The data could have been more direct, such as a uses and gratifications survey comparing different forms of artwork while providing more clear distinctions to make it more relevant to the thesis. For example, there was dif ficulty in interpreting what the phenomenological U &G results meant regarding communication/relationship value. The mos t direct data was in WOM studies the supers tar effect, mood evocation, desire for physical media and in support of identity formation. Another problem with the data is that many points are supported only by one channel of artistic good. F or example, the term superstar effect is generally associated with music, though a similar effect could be occurring with other types of goods. This made it hard to find data about the superstar effect in relation to film, books, or television. Data for collection value was difficult to find for books and television. Since much of book reading is done through borrowed books from libraries, it doesnt make much sense to correlate sales numbers with amount that is read. A study analyzing personal libraries while taking into account borrowed books would have been extremely useful. With television, consumers generally dont own the

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New College of Florida 2010 Katikala 87 material but instead subscribe to cable or watch free broadcasting making it difficult to develop an idea of a collection Si nce the data were mixed in supporting the value systems, the conflicting data had to be interpreted in terms of its strength and relevance. It is necessary to explain these discrepancies and conclude the strength of the support for each value system. This requires some interpretation and judgments beyond the actual data presented and the conclusions given by studies. Much useful, relevant data were unable to be acquired. First, it would have helped a lot to have statistical data on what people naturally ta lk about. This requires just prompting free speech and identifying which topics most frequently come up. For emotional value, it wo uld have been helpful to have direct s urvey s on what people looked for in their purchases (actors versus directors, singers, producers). Nearly all of the more rigorous data on art markets and media are found in market research which, from their descriptions, contains very relevant data but are extremely expensive. For example, The 20092014 World Outlook for Book, Periodical, and Music Stores is priced at 851 Euros (International) With even very limited funding or a small group of researchers, it would be quite easy to perform the t wo studies described above; with a large budget, we could have gotten insight from detailed and reputed market research data. Overall, the data are not impressive. We expected from the beginning to have only very tangential data since it was established that the study of mass produced artworks is not very studied. However, we have enough data to hav e a few very powerful revelations about the nature of demand for mass produced artworks.

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New College of Florida 2010 Katikala 88 Conversational Value The evidence for social value is not especially strong for the types of artworks analyzed. The evidence for conversational importance was pretty weak The superstar effect appears to have empirical backing, though it appears to be one of exposure more than having a common conversational field. The bestsellers list is the best example of this, showing that placement on the list significantly only af fects unknown authors. The shocks from media exposure are brief and immediate, implying that television appearances spark our interest and exposure to the book. However, the very weak effect of word of mouth implies that either conversation isnt affecting our purchasing decisions, or (more likely), we arent talking much about our artworks. Similarly, we find consumers online to tend to have a decision in mind already that can only be dissuaded by reading reports of disappointed reviewers Combined with the uses and gratification research, the overall evidence here seems to support consumers relying on others for information about the good but with little evidence that consumers think that talking about the artwork is important otherwise. This fits in wit h literature about art markets. The risk of purchasing an experience good can be dispelled partially by talking with other to ensure that we arent purchasing a lemon We did find weak cross cultural consumption and some evidence that books, at least, are good substitutes with other cultural products. T his is only secondary ev idence for conversational value and it can be explained in terms of the primary evidence we found. Since consumers rely on each other for finding information, it can be assumed that t here is a cultural aspect to information spreading about artworks. The culture comes from before the artwork is experienced, in order that we might use each others experiences to help us from making bad

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New College of Florida 2010 Katikala 89 consumption choices. It isnt clear that after the a rtwork is consumed, we have a desire to talk about it; our discussions appear to be ones of trading recommendations. Emotional value The data for emotional value were pretty persuasive. Consumers tend to use mass produced artworks as pure personal enterta inment. They dont tend to try to learn anything or bond with others when consuming artworks; instead they use it in various ways to fill up time. With television for example, consumers tend to multitask and distract themselves while performing monotonous tasks, if not to escape stress and thought. In music and film, consumers relate more directly to attributes of the product than with fellow consumers according to data on recommender systems. Mood evocation by all types of artworks was important support he re. In different ways, consumers seemed to use different types of artwork to produce or evoke a certain type of emotion. We see from the various uses and gratification research that consumers tend to have introvert gratifications when considering the value of artworks. Collection Value Evidence shows that consumers of books, music, and movies demand physical products even when (often cheaper and more convenient) digital means are available. There is direct survey evidence from the UK about consumers preferr ing physical copies of music even when they own the mp3s. Those who demand box sets of television shows on the other hand, are a relatively small demographic, though still a significant one since it brings back large profit for the producers. The evidence is mild but strongly favors collection value to be present in the preferences and consumption choices of individuals Identity Formation

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New College of Florida 2010 Katikala 90 One reoccurring issue in the data, especially uses and gratification research is that of identity formation. This has turned out to be a strong motivator for individuals to consume artworks. Based both on consumption patterns and survey data, we find consumers using artworks to define themselves. However, d oes the term identity belong with conversational emotional or collection? It depends on whether we should classify the need for identity formation as a social need a personal need, or discovered through collecting The evidence points towards building of personal identity through artwork, though we must question how personal identity affects our social life. It seems as if personal identity will inherently manifest itself into affecting our social identity making artwork socially valuable However, the evidence seems to indicate that the social value of artworks isnt as direct as a conversation topic. By developing our identities, we position ourselves differently in a social environment. The evidence seems to imply that we might consume artwork to become part of a group or culture, amplifying the ideals that the group embodies, though the group probably wont even talk much about the artwork they share in meaningful conversation. Identity formation is also related to emotional value. We know that artwork evoke moods and these moods might induce certain patterns of thinking. For example, death metal is generally very angry with lyrics accenting emotions associated with unjust, immoral, and hurtful situations. This might make salient the angry thoughts of the listeners. At least some of our identity comes from the salience of different kinds of thoughts, which can be brought out by artworks. In this way, we might consider artworks simultaneously for their emotional value and their value in identity formation. The artwork is valued for the thoughts and emotions we d esire; our preferences in the emotions we desire are a part of identity formation.

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New College of Florida 2010 Katikala 91 Collection value is a little more difficult to connect to identity formation. The extent to which the act of collecting and ownership i s responsible for the creation of our identities isnt clear Ownership and a creation of a personal library might help to catalogue our influ ences, but it doesnt seem necessary to have such a catalogue to use artwork to enrich our identities We might consider collecting to be a tool which helps with detailing our progress but isnt necessary. Since identity formation has some connection with each of the three proposed value systems, I have treated personal identity as a separate issue, not supporting or denying any of the hypotheses. The ev idence seems to b e fairly strong that identity formation might be the primary or one of the primary uses for artworks. A future study of identity formation would be helpful to gain a better conclusion. An ideal study would keep track of a moderate number of participants with a questionnaire that gauges the strength of their personal identity. The questionnaire could ask questions relating to self perceived uniqueness, confidence, and personal growth. An accompanying survey would ask questions about their c onsumption of various artistic goods, media, and personal relationships. The trends and correlations can be used to figure out the role of artistic goods to different aspects of personal identity formation. Gaining enough participation for the analysis to be si gnificant might prove difficult. However, the results could potentially help entertainment businesses better reach out to consumer needs. Null Hypothesis We originally considered traditional accounts of aesthetic value and stated that if the evidence wasnt strong enough to support any of the proposed value systems, we might fall

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New College of Florida 2010 Katikala 92 back on the idea that aesthetic value is capricious as a null hypothesis. Though the evidence is only moderate, we have found clear evidence for patterns in artwork consumptio n. There is enough scattered evidence to reject an idea of each individual valuing artwork in such vastly different ways that it doesnt make sense to define patterns or suggest a single value as more important than another. We have found significant evide nce for identity formation to be valuable to the consumer, as well as evidence for emotional value and collection value. There is moderate evidence against my original hypothesis that conversational value is most important to the consumer. The Release Dat e An interesting discovery through this analysis is the extent of the importance of the release date for the consumer. There is no clear explanation why consumers of music, books, and movies wait until rele ase date to pirate the product. This puzzling fac t should be investigated further in another project for it might reveal more insight into the needs satisfied by artistic goods. Summary The results of this thesis have shown identity formation to be a primary value for consumers of m ass produced artwork s. The original three hypotheses each represent elements of identity formation to a different degree and exemplify various details about how identity formation works. Conversational value had a fair amount of evidence showing that consumers dont really co nsider consuming artworks for the purpose of talking about it with others. The evidence instead showed that consumer s generally speak about artworks to gather information

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New College of Florida 2010 Katikala 93 assessing its quality before experiencing. The evidence for emotional value helps support this conclusion by showing that consumers have primarily internal motivations for consuming. We see mood evocation combined with uses and gratification research which tend to show that consumers treat artworks as personal entertainment and for identit y formation. The evidence for collection value was sparse, but the evidence that was there was pretty strong and convincing. Though this is probably strongly related to identity formation, survey and statistical data showed us that consumers generally find great utility in owning physical copies and often will purchase movies after seeing them in theaters. S ection 2 : Application The result of this thesis paints a pretty grim picture for the future of mass produced artworks. If the majority of the dialog ue about artwork s is just to help gauge the quality before they are experienced, then current changes to the industry might reduce the dialogue significantly. Many scholars in the field (Dolgin and Caves to name a couple ) see the next step for music to be collaborative filtration, where music listeners preferences are matched with listeners with similar preferences to provide suggestions of new songs and artists. This concept will be applied most likely through an online database program linked to ones li brary. Previous attempts have been made, but the effectiveness of the algorithms has been subpar and attaining users preferences without being intrusive or timely has proven difficult. However, much research is being done currently on both fronts to perfe ct a system enough to where enough users will use the program for it to be useful and common. Dolgin points out that when such a program effectively takes off, it will greatly change how we perceive music. It will

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New College of Florida 2010 Katikala 94 decrease navigation costs by automatically sifting through the billions of songs available and pointing out only the ones relevant to the user. We will no longer have the same mystery when we purchase a CD where we feel lucky or disappointed by our decision. We might have read some good reviews or heard good things from friends but when we finally listen to it, we might find that it doesnt suit our tastes. With recommender systems, we dont have to listen to maybe ten albums to find the one that we will enjoy listening to over and over again. If t hey prove to be as accurate as anticipated, then we will be fairly confident we will be matched almost instantly with an album that we will cherish for a long time. Similar recommender systems are be worked on for movies and more distantly, books. These r ecommender systems will take over the role that most of our conversation about artworks currently has. We talk about artworks primarily to gauge its quality and to help eliminate some of the lack of information about the artwork. If a program can do it bet ter, then how much dialogue will be pursued about art? Already, we might notice that much conversation (and interest) about more traditional art forms like theater, ballet, and classical music has died down significantly. Why is it a concern if we speak less about art? I f the conclusions of the thesis are accurate and identity formation is one of the prime uses of artworks, then who we are as people will change as well. The products that we use to define ourselves as individuals will no longer be by searc hing, having conversation and debate, and having a personal and involved process. Instead, theyll be calculated and presented to us systematically It is possible that recommender systems might do just the opposite. By making us more efficient in our de cisions about artworks, we might actually gain more to talk about. Our

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New College of Florida 2010 Katikala 95 personal identity wont be shaped by those in proximity; instead, well be connected to similar thinkers on a global scale. This developed identity will be more unique relative to those in close physical proximity since it isnt shaped by the recommendations of locals. Thus, in sharing ones identity with those in a class, for example, one will bring a perspective and a developed identity from distant sources. This diversity could bring forth more enlightening conversations, allowing greater complexity and clashing of ideas. As the technology appears, we should look forward to encountering this debate between the potential benefits and the existential dilemma of having an essential compon ent of our perso nal identity dictated by algorithms In preparation for these technological changes and as an extension of the findings of this thesis, I suggest deeper research into identity formation and art. What exactly is identity formation? How is it affected by art? How much is affected by conversation? What are the costs and benefits to having personal identity development assisted by technology? How does it affect the psychology of an individual? Is there a line where it goes too far on moral gro unds? Based on the findings of the thesis and the current state of the media industry, these questions will become very important in coming years and should be taken seriously.

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