ABSTRACT
In modern, industrial societies, the production and distribution of both fine art and popular culture entail relationships among a complex network of organizations which both facilitate and regulate the innovation process. This chapter outlines the structure and operation of entrepreneurial organizations engaged in the production and mass distribution of three types of "cultural" items: books, recordings, and motion pictures. The publishing house, movie studio, and record company each invests entrepreneurial capital in the creations and services of affiliated organizations and individuals at its input (product selection) and output (marketing) boundaries. Entrepreneurial organizations in cultural industries require competent intelligence agents and representatives to actively monitor developments at their input and output boundaries. Differential promotion of new items, in conjunction with overproduction, is a proactive strategy employed by cultural organizations to overcome dependence on mass-media gatekeepers. Mass-media gatekeepers report a wide variety of mechanisms developed by cultural organizations to influence and manipulate their coverage decisions.
