Optimal differentiation in cultural industries : an exploratory study in the Dutch clubbing industry

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Optimal Differentiation

In Cultural Industries

An Exploratory Study in the Dutch Clubbing Industry

Author: Niels van Loo Student Number: 10437169 First Supervisor: M. Piazzai

Date of Submission: 22-06-2018 (Final Version)

MSc. in Business Administration – Management and Entrepreneurship in Creative Industries Institution: University of Amsterdam, UvA

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Statement of Originality

This document is written by Student Niels van Loo who declares to take full

responsibility for the contents of this document. I declare that the text and the work presented

in this document is original and that no sources other than those mentioned in the text and its

references have been used in creating it. The Faculty of Economics and Business is responsible

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Abstract

Topic: The main objective of this research is to understand how optimal differentiation with

cultural industries occurs. Differentiation is crucial for obtaining value within cultural

industries, however literature providing a strategic view on the decisions making process for

increasing the chances of successful differentiation appears to be in its infancy.

Background: Categorization is decisive for value ascribed to differentiation, this limits

differentiation and imposes an optimum. Gatekeepers and selection systems exert influence on

the value determination of a differentiation. Academic work explaining how producers of

cultural goods can successfully differentiate or make strategic choices to reduce the risk

accompanied with differentiation appears to be almost non-existent. Other literature claims that

popular products can be used as a tool to balance out financial and artistic incentives, but no

conditions for a strategic execution of this strategy towards optimal differentiation can be found.

Methodology: An embedded multiple case study among eleven creative decision makers

belonging to eight distinct nightclubs is conducted to exploratively identify decision making

procedures that might add to closing the imposed research gap. The setting of this research is

the clubbing industry in the Netherlands.

Contribution: This research makes a contribution to the existing literature by extending it with

the theory that identity guides differentiation. The identity of a cultural organization is an

indicator for the success of cultural organizations and a determinant for the differentiation

optimum per organization. Also this research proposes two strategies for differentiation within

the boundaries set by the identity and one strategy for successful differentiation outside these

identity boundaries.

Keywords: Differentiation, Optimal Differentiation, Categorization, Gatekeepers, Selection

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1. Introduction

The purpose of this research is to analyze how optimal differentiation in cultural

industries occurs. Literature on cultural industries extensively claims that these industries are

characterized by surpluses of cultural products with highly uncertain success rates, and tension

between the artistic and financial incentives of the producer of these goods (Peltoniemi, 2015;

Caves, 2003). Wijnberg & Gemser (2000) suggest that in such industries differentiation is the

key to gaining recognition and assigning value to products. In their research they argue that

within the cultural industry, successful and value adding differentiation is perceived as

innovation. However, in such a confusing, uncertain and experience-based market, success and

value are very complicated to measure. Especially for individual consumers, as the true value

of most products appears post consumption. Therefore, evaluation and value determination of

cultural products occurs with the help of gatekeepers and/or selection systems (Peltoniemi,

2015; Caves, 2003). When put together, this suggests a successful differentiation is an addition

to the existing offer within a cultural industry that is being perceived as valuable by the right

people. What remains unclear is how the producer of cultural goods, can gauge what will be

perceived as a valuable addition to the various cultural industries. Literature on this topic

remains largely inconclusive and managerial strategies for successfully differentiating within

cultural industries are scarce and vague.

Existing literature on differentiation in cultural industries explains that differentiation

practices do not necessarily have to be in the spectrum of socially accepted codes proposed by

the industry (Durand, Rao & Monin, 2007). In their findings, Durand et al. (2007) demonstrate

that determining the right balance in what a company changes versus what they preserve is

significantly more important than the type of change. According to Zuckerman (2016),

differentiation is evaluated along two stages; The first part of the two-stage evaluation process

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6 certain group or category, overlap with other category members is key in this stage. The second

evaluation phase focuses on the distinctiveness, the extent to which a product is different

(Zuckerman, 2016).

As the relevant evaluators are more capable of understanding differentiation when a

product can be categorized, categorization appears to be equally or maybe even more important

for value determination than differentiation. However, literature that helps identify boundaries

on the amount of overlap required to still be perceived as a legitimate category member is

scarce. Additionally, given the fact that differentiation does not inevitably have to correspond

with any social codes or guidelines, cultural organizations are provided with an infinite amount

of differentiation options. Literature that assists in structuring or understanding these decisions

appears to be virtually non-existent. This is a rather strange phenomenon, as, these decisions

form the foundation for gaining recognition and obtaining value as a producer of cultural good.

Therefore, the main objective of this study is to aid in closing the current gap in literature by

answering the research question:

How can cultural organizations differentiate optimally?

This question will be answered by using data obtained from qualitative research within

the Dutch clubbing industry. The Dutch clubbing industry is part of the electronic dance music

industry, a huge industry with an estimated total worldwide value of $7.4 billion in 2017

(Watson, 2017). The Dutch event industry occupies a prominent position within this industry

worldwide (Den Butter, Joustra, & Reijnders, 2014). On average one in seven Dutch people

annually visit a dance event (ING Report, 2015) and one in twenty jobs in the Dutch cultural

industry are in the electronic dance event industry (Den Butter et al., 2014). In this research,

eight Dutch for profit nightclubs are analyzed on their decision making process and

differentiation practices within the industry. Even though the eight clubs are for profit, profit

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7 therefore clearly apparent, creating a valuable environment for understanding optimal

differentiation within cultural industries.

The first part of this research is a deductive, critical literature study for an accurate

determination of the existing literature gap. The literature review provides the researched

themes and categories that form the basis of the inductive exploratory research. This paper

adopts a embedded, multiple case study approach in which the eight nightclubs form the cases.

The units of analysis embedded in the cases are eleven creative decision makers employed in

the cases. A semi-structured interview is repeated eleven times to understand the individual

perspectives of the interviewees on categorization, differentiation and value determination

within the clubbing industry. After this, systematic text condensation including a cross-case

analysis provides an overview of general themes that appeared in most interviews.

A synthesis of the literature review and data analysis outcomes suggest possible

interesting decision making strategies for optimal differentiation within the cultural industry.

Results of this synthesis proposes that successful differentiation is inseparably linked to a strong

identity. Furthermore, the research proposes two interesting strategies for experimenting and

balancing the artistic and financial incentives. And one strategy for expanding the identity or

adopting new identity. Also, some preconditions are identified which appear to add to the

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2. Literature Review

The following chapter is a critical review of existing literature concerning differentiation

within cultural industries in which crucial concepts important for this process are explained.

The purpose of this review is to put forward an argument that unpacks and highlights the

discrepancies within existing literature as well as provide evidence to support these claims.

2.1 Cultural Industries and Large Uncertainties

Cultural industries are defined as “those that produce experience goods with considerable creative elements and aim these at the consumer market via mass distribution

(Peltoniemi, 2015, pp 41.).” Typical for these industries are surpluses of artistic labor,

overproduction of cultural goods and huge uncertainties about the success rates (Peltoniemi,

2015; Caves, 2003). These industries are also characterized by the “art vs commerce principle”, which refers to the tensions between artistic and commercial incentives experienced by

producers of cultural goods, as discussed by Caves (2003). These characteristics generate a

highly uncertain industry with a significant amount more supply than demand, in which

decisions for creative elements or practices are not necessarily aimed at profit maximization.

Nevertheless, the eventual outcome of the creative decisions made has a huge influence on the

competitive position of the cultural product within the market (Currid, 2007). This suggests that

no matter the producer’s incentives, possible consequences of the creative decisions must always be clearly considered upfront in order to reach the set objectives. However, theories

that aim to provide an understanding of how these creative decisions can be made successfully

often seem very generalized and incomplete.

Peltoniemi (2015) and Caves (2003) explain risk reduction and value creation for

cultural products in terms of popularity. Popularity refers to the ability of a product to appeal

to mass markets (Craig & Dubois, 2010). When the decision is made to yield products that are

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9 sustainability also increase. Using popularity to compensate for risk-taking activities and

balancing art vs. commerce is a strategy that is already being deployed in some cultural

industries (Alexander, 1996). Alexander (1996) writes as an example that large museums

compensate for rare and abstract exhibitions with popular exhibitions to generate revenue.

Although this an interesting starting point for understanding how cultural organizations balance

the conflicting (internal and external) pressures, the scope of the Alexander’s research is rather

limited to a very specific type of cultural organization. Additionally, the competition is not

included in this research, therefore a comprehensive explanation of these decisions and the

effect they have on the market position remains largely unclear.

2.2 Differentiation

Wijnberg & Gemser (2000) write that for producers of cultural goods to gain recognition

and add value to their products, they need to differentiate. Successful differentiation within

cultural industries is referred to as innovation (Wijnberg & Gemser, 2000). Hannah & Freeman

(1977) argue that innovation can best be understood when looking at the industry for a

population ecology perspective. The population ecology perspective compares organizations in

an industry to organisms that adopt to their environment to increase their chance of survival.

Child (1997) elaborates on this concept in more depth by explaining that innovative

organizations undergo an evolutionary cycle which assists them in successfully transforming

into different shapes to remain competitive within the market. These shapes are not

predetermined, but rather a result of the initial market position, internal activities and external

pressures of the organization. Organizations have the highest survival rates when they are both

proactive and reactive to their dynamic environment.

Scientific literature on cultural industries widely accepts the theory that innovation is a

crucial concept for understanding value creation and the development of organizations within

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10 2004). However, concrete managerial literature that aids in understanding the decision-making

process for specific differentiations that underly these innovations are extremely rare. Durand

et al. (2007) use empirical evidence to prove that cultural organizations who differentiate have

higher chances of success in comparison to their non-differentiating competitors. However,

they also deduce that differentiation has a peak limit that when exceeded, lowers chances of

repeat success. In their research, differentiation occurs is divided in two categories: code

preserving- and code violation change. Code preserving change is a distinction in the product

range that preserves the social codes in which the firm positions its offerings. Code violation

disrupts orthodox social codes and embraces alternative ones. Findings suggest that both code

violating and code preserving changes have a positive effect on the success of a firm, and that

the frequency of change adds to the success of an organization in a curvilinear manner with

respect to the market. Thus change of any kind increases chances of success over no change,

but changing too much reintroduces risks for the organization (Durand et al. 2007).

These findings raise two questions essential for this research, namely: How do producers

choose the most suitable type of differentiation? And, how do producers know where the

differentiation threshold is? Managerial literature that focuses on this creative decision making

process within cultural industries appears to be almost non-existent. General business and

organizational literature discussing strategic decision making processes in which well-grounded

choices for differentiation can be explained and defended appear to be in their infancy. This

literature is unable to provide a concrete understanding of how an organization differentiates,

although it does explicitly stress the importance of categorization for the differentiation process.

2.3 Categorization

Categorization happens in the minds of the consumers (Keller, Sternthal, & Tybout,

2002). Kuijken, Leenders, Wijnberg, & Gemser (2016) explains product categories as social

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11 Consumers often use prior knowledge to evaluate products. Therefore products or producers

that are easy to categorize have a higher chance of becoming successful (Kuijken et al. 2016).

Producers benefit from explicitly stressing the parity between themselves or their

products and the established category, because it simplifies the categorization process in the

mind of the consumer (Keller et al., 2002). Being perceived as a legitimate category member is

key to differentiation, because categorization provides a frame of reference that helps

consumers make sense of differentiation (Keller et al. 2002). Thus categorization is crucial,

some argue it is even more important for value creation than the actual differentiation

(Romanuik, Sharp, & Ehrenberg, 2007). Differentiation can be perceived as an act of

incompetence or deviance (Zuckerman, 2016). These are serious risks that can lead to being

evaluated as below average with reference to the category. Being perceived as such is very

undesirable for cultural organizations and consequently limits differentiation. Organizations

mimic each other to be perceived as normative (Zuckerman 2016). Mimicking is also referred

to as isomorphism. Hitters & Van de Kamp (2010) explain that with isomorphism,

organizations model themselves to resemble the most successful player in the market. Note that

the most successful player not necessarily has to be the most efficient one in terms of producing

goods.

Therefore, the evaluation and actual value of cultural products largely depends on

categories. Similarly with categorization, strategies for understanding how decisions within

cultural organizations are made to be perceived as at least a normative category member appear

to be missing from existing literature. For a clearer understanding of the extent to which cultural

organizations have to categorize themselves, it is important to understand how categories are

created. Zuckerman (2016) argues that the categorization occurs before selection and that

relevant audiences create norms to define categories of legitimate and acceptable candidates.

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12 relevant audiences and phases (Peltoniemi, 2015). This suggests that, as producer of cultural

goods, one has to understand the norms and extent to which they must categorize to be

perceived as a legitimate player within the market. It is imperative to understand who the

relevant audiences are and what is involved to be perceived as at normative.

2.4 Gatekeepers & Selection Systems

The first relevant audiences for producers of cultural goods are the gatekeepers.

Peltoniemi (2015) explains that gatekeepers filter the huge streams of overproduction in cultural

goods and surplus in artistic labor by allowing or restricting access to reach the consumer. This

happens in two phases: upstream selection and downstream selection. During upstream

selection gatekeepers decide whether a product reaches completion. During downstream

selection gatekeepers exert influence on whether this product reaches an audience (Peltoniemi,

2015). These audiences eventually determine the actual value of the good and are referred to as

selectors (Mol & Wijnberg, 2007).

Selectors can be divided in three selection systems: market selectors, peer selectors and

expert selectors (Wijnberg & Gemser, 2000). When consumers are the most important value

determinant of a product, the product is subject to market selection. Within peer selection, the

value is determined by producers of cultural products belonging to the same type of cultural

industry, e.g. a painter evaluating the work of other painters. In expert selection neither

consumers nor producers of these goods determine the value, e.g. a professional art critic

evaluating a design lamp (Wijnberg & Gemser, 2000). It is important to note that selection

systems are not necessarily autonomous in determining the value of cultural products, so

combinations of selection systems may occur (Mol & Wijnberg; 2007). In plural organizations

it is very common to have multiple business leaders who have different incentives and different

perceptions of what adds to improving of the organization, and therefore focus on obtaining

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13 important to note that for a cultural industry, always one of the three selectors is the most

dominant when it comes to value determination (Mol & Wijnberg; 2007).

Currid (2007) explains that this value determination of cultural products occurs through

socially constructed subjective evaluations concerning the financial, aesthetic and social value

of cultural products. The first evaluations are done by gatekeepers. For these evaluations to

obtain validity they eventually have to be reaffirmed by the dominant selection system, which

in Currid’s case were the consumers.

When connecting the information about gatekeepers and selection systems to

differentiation. One can argue that gatekeepers thus are the initial boundary determinants for

product categories and therefore crucial for understanding the categorization limits. Wijnberg

& Gemser (2000) argue that the actual value of an innovation is determined by the dominant

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3. Empirical Setting: The Dutch Clubbing industry

The setting of this research is

the Dutch clubbing industry, an

industry that lies at the core of the

electronic music industry. The

electronic music industry worldwide

is a huge and ever-growing industry.

In 2017 the estimated total value of

the industry was $7.4 billion, which

is a 3% annual increase (Watson,

2017). Globally, the number of dance events continues to increase. Dutch event industry

occupies a prominent position in delivering creative input within this respective market in the

world (Den Butter, Joustra, & Reijnders, 2014). Furthermore, the industry within the

Netherlands is extremely vibrant. Figure 1. Demonstrates that in 2017 the Netherlands placed

itself in eighth position of countries streaming the most electronic music in the world. The figure

also indicates that the percentage of inhabitants listening to electronic music is far above

average when compared to the rest of the world. On average, one in seven Dutch people

annually visit a dance event (ING Report, 2015) and one in twenty jobs in the Dutch cultural

industry are in the electronic dance event industry (Den Butter et al., 2014).

In this research I focus on a specific part of the above mentioned industry, namely the

Dutch clubbing industry. Purcell and Graham (2005) define clubbing as: “ the experience of attending nightclubs, dance clubs, or lounges, and commonly involves dancing to music played

by a disc jockey (DJ), "scoping" (i.e., appraising other patrons to identify prospective

romantic/sexual partners), socializing, and choosing from a wide array of intoxicants to

heighten one's pleasure(pp: 132)”. The organizations participating in this in the clubbing Figure 1. Electronic Music streams on Spotify (Watson, 2017)

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15 industry are individual nightclubs. Often, these clubs are for-profit venues (Kühn, 2015).

Stakeholders in the clubbing industry include inter alia club owners and promoters (internally),

who in turn hire large numbers of technicians, DJs and professional dancers (externally).

Combined, with the use of electronic music, clothing, lights/ambiance and dancing they create

the experience called clubbing (Goulding & Shankar, 2011). These people are eventually

determinants for the creative elements out of which a club night exists, and are therefore

referred to throughout this thesis as creative decision makers.

The clubbing industry is one that lies at the core of the Dutch electronic music market

and is extremely interesting for research on creative decision making and optimal

differentiation. This is due to the fact that many nightclubs come into existence for the love of

electronic music and a fascination for the clubbing industry (Kühn, 2011). This especially true

for nightclubs interviewed during this research, as all of them were created to add a different

element to the existing scene in terms of cultural value. Profit maximization is not the primary

objective of these clubs. This allows them to play a lot with differentiation and financial

viability. For this reason it can be argued that this is the perfect environment to research optimal

differentiation within cultural industries.

During this research eleven creative decision makers employed in eight different

nightclubs are interviewed. Five of the eight nightclubs are located in Amsterdam while the

other three can be found in Groningen, Rotterdam and The Hague. It is important to note that

regardless of their location within the Netherlands, these nightclubs appear to be part of similar

and comparable communities. The scene in which they operate appears to be small and

informal and many of the interviewees in this research know each other personally. What’s more, it is not uncommon for the interviewees to be in one way or another involved in multiple

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16 to the venues researched in this paper. This gives an indication of the size of the scene and how

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4. Method

This chapter contains an overview of the research methods and strategies used during

this research. It provides an in-depth description of the data collection and analysis procedures

together with a detailed overview of the interviewees and cases. Corresponding strengths and

limitations associated with the specific methodological choices made in this research are

reported and defended in this chapter.

4.1 Research Method & Strategy

Deductive literature research (Yin, 2009) has led to the identification of a research gap

concerning decision making strategies and optimal differentiation within the cultural industries.

Literature concerning this topic seems practically non-existent, however for understanding how

optimal differentiation occurs, one can imagine that the context of these differentiations plays

a crucial role. This research therefore is a qualitative (Yin, 2009; Yin, 2015) exploratory

research (Saunders, Lewis & Thornhill, 2009). The research is written from an interpretivist

vision of the truth (Rynes & Gephart, 2004; Wahyuni, 2012) which allows the utilization of

interviews for describing and understanding the creative decision makers and their perception

of optimal differentiation within the Dutch nightclub industry. Inductive reasoning is used to

find consensus among these separate perceptions and to establish status quos (Saunders et al.,

2009) which may indicate strategies for optimal differentiation within the cultural industry.

The research strategy applied in this thesis is an embedded multiple-case study

(Saunders et al. 2009). The choice for a case study is grounded in the fact that

multiple-case studies usually provide a stronger and more robust basis for theory building, as they are

more accurate and generalizable than a single-case study (Eisenhardt & Graebner, 2007). The

holistic cases are represented by eight different Dutch nightclubs. The embedded units of

analysis within these cases are employees of these nightclubs whom are actively involved in

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18 conducting semi-structured interviews (Yin, 2009) of in-between 45 to 90 minutes. An

overview of the cases and interviewees can be found in table 1.

Cases Function interviewee Location Club Date

Case 1. Interviewee 1. Programmer + Artistic Director Amsterdam 4-5-2018 Case 2. Interviewee 2. Programmer The Hague 9-5-2018 Case 3. Interviewee 3. Head Creative Production Amsterdam 3-5-2018 Case 3. Interviewee 4. Head Programmer Amsterdam 4-5-2018 Case 3. Interviewee 5. Artistic Director Amsterdam 26-4-2018 Case 4. Interviewee 6. Programmer + In charge of

professionalizing the company

Groningen 24-5-2018

Case 5. Interviewee 7. Programmer + Head Creative Production

Amsterdam 24-5-2018 Case 6. Interviewee 8. Programmer Amsterdam 18-5-2018 Case 6. Interviewee 9. Programmer Amsterdam 2-5-2018 Case 7. Interviewee 10. Programmer + Owner +

Creative Director

Amsterdam 29-5-2018 Case 8. Interviewee 11. Programmer Rotterdam 30-5-2018

4.2 Data collection

All interviewees are obtained by utilizing my personal network and thus found by

heterogeneous purpose sampling (Saunders et al. 2009). Heterogeneous sampling led to the case

compositions depicted in table1. The choice for heterogeneous sampling over homogeneous

sampling is based on the assumption that creative decision making entails more sides of a

nightclubs than just the musical programming (Kühn, 2011; Kühn, 2015).

The interviews are all in-depth individual interviews because these are seen as one of

the most powerful tools for gaining an understanding of human beings and exploring topics in

depth (Carter, Bryant-Lukosius, DiCenso, Blythe & Neville, 2014). Eleven interviews and eight

cases turned out to be sufficient for this research because after analyzing the last the case the

incremental learning was minimal and time constraints were very high (Eisenhardt, 1989). The Table 1. Overview Interviewees

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19 division of professional functions of the interviewees and the locations of the cases are not

equally divided. This inequality is due to strict time constraints, the scope of my personal

network and the availability of the interviewees.

The bias this might contain however is reduced to a minimum because both literature

suggest (Kühn, 2011; Kühn 2015) and the interviews confirm, that most interviewees to some

extent are part of a similar community of likeminded people. Almost all participants have

played or are still playing as a DJ, both at their own venue and other venues. Some have worked

at or are/were strongly connected with multiple clubs incorporated in this research. Interviewee

3. for example has also been employed in case 2. and 7. And interviewee 10. has helped with

the initiation of case 3. The creative decision makers mainly use the same sources for obtaining

new creative input and many of them have worked or organized events in different venues. On

top of this all interviewees have the power to alter creative decisions, yet their metrics for

determining the quality of the cultural products produced turned out to be largely the same.

The bias that might remain due to the different functions the interviewees have within

the club is also reduced during the interviews. Interview questions are composed and asked in

such way that the focus lies on the entire creative production of the club. So insights are gained

concerning the specific function of the interviewee within the company, as well as on their

vision of creative differentiation as a whole within their company and the industry.

Interviews are thus composed to create unity. Huge variations are mainly found in the

context in which these venues operate, therefore I have chosen to make this research a

multiple-case research. Cases are always researched in relation to their context (Saunders et al., 2009)

and using multiple cases enables a broader exploration of the research question and a more

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20 4.3 Interviews & Minutes

The semi-structured interviews in this research are constructed and used along the four

steps of (Cassell & Symon, 2004). The first two steps are: Defining a research question and

creating the interview guide. Both of these steps are a result of the earlier described deductive

literature research for clearly illustrating the research gap (Yin, 2009). The interview guide can

be found in appendix 1. and is build out of Leech’s philosophy that “in an interview, what you already know is as important as what you want to know (2002, pp. 665)”. So deductively

derived categories and themes form the basis for the interview questions (Gale, Heath,

Cameron, Rashid, & Redwood, 2013).

The main categories that I have chosen for this research concern categorization,

specifically differentiation and gatekeepers/evaluation, because as explained in the literature

review these are the practices that are the most important determinants for successful

differentiation. The first interview question is an experience question to find out more about the

background of the interviewees and to make the interviewees feel comfortable. The specific

order of the questions is chosen with a clear focus on the differentiation process.

First, I ask interviewees to describe the category their nightclubs are in, and to describe

the categorization process. I try to find out how differentiation occurred in the past to easily

guide them towards a more global overall perception of differentiation. The follow-up questions

focus differentiation. First, I ask how they themselves differentiate with respect to the industry.

I also ask them how they think differentiation within the entire industry occurs to find

congruences. After having a clear understanding of the interviewees perspective on

categorization an differentiation, I ask them what determines the success/value of a

differentiation to find out which gatekeepers there are and where the optimal differentiation

boundaries can be found. These questions concerning categorization, differentiation and

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21 visions. Probes for these questions are example questions and prompts for gaining more specific

insights in interesting and possibly relevant claims (Leech, 2002; Rowley, 2012). The ending

of the interview exists out of a concluding question on how to not differentiate, a lighter, less

relevant question on how nightclubs will look in the future and an open question that leaves

space for any remarks or questions from the interviewee towards me and end the interview on

a lighter note (Cassell & Symon, 2004). All questions and probes are designed to be

non-presuming to keep the researcher bias to a minimum (Leech, 2002).

The third step is recruiting participants (Cassell & Symon, 2004). As already explained

in the data collection chapter, this is done by utilizing my personal network. All interviews

lasted in-between 45 and 90 minutes and are recorded with permission of the interviewees. All

interviews are conducted in Dutch and ten out of eleven are in person. The interview with

interviewee 6. was over Skype, due to the fact that the interviewee was located in Groningen

and there were time constraints from both sides. Seven of the interviews took place inside the

club where the creative decision makers work. This provided me with a more visual

understanding of their work. Interviewee 10. used to be a programmer up to approximately

three years ago, but the clubs where he used to work are not in existence anymore. This might

thus introduce a little bias caused by retrospection. And even though it is impossible to

completely get rid of this bias, I argue that the answers are still accurate and valuable to this

research, as Interviewee 10. is co-responsible for the initiation of case 3. and has remained

active as a DJ and therefore is still very actively engaged in the community.

The fourth step is carrying out the interviews (Cassell & Symon, 2004). During the

interviews the structure of the interview guide is largely followed unless interviewees

themselves began to talk about topics related to the other questions. In this case, with the use

of probes, the most relevant information concerning these topics is obtained after which I

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22 also asked in a sensitive and non-judgmental way to keep the interviewee at ease at all time

(Leech, 2002). During the interviews I made minutes that helped me keep an overview on the

information provided by the interviewee during and after the interview. These minutes made it

possible for me to show the interviewee that I was clearly listening since I could literally repeat

earlier stated arguments and ask them to elaborate more deeply on them (Leech, 2002). Also,

the minutes functioned as notes which helped me to quickly remember important points during

the analysis phase (Rowley, 2012).

4.5 Data analysis

The recorded interviews were transcribed word-for-word (Shenton, 2004). The minutes

made during the interviews, together with the deductively categories from the literature, formed

into an emerging structure for thematic data analysis (Gale et al., 2013).

The transcribed interviews are analyzed along the four steps of Systematic Text

Condensation (STC), a frequently used research method for explorative research (Malterud,

2012). STC consists of the following steps: “1) total impression – from chaos to themes; 2) identifying and sorting meaning units – from themes to codes; 3) condensation – from code to

meaning; 4) synthesizing – from condensation to descriptions and concepts (Malterud, 2012,

pp.795)”. During the first step, the transcripts are coded with open coding (Miles & Huberman, 1994). At the second step the codes are grouped and themes are established with axial coding

(Malterud, 2012; Miles & Huberman, 1994). The earlier described minutes and deductively

derived categories are incorporated during the axial coding phase, which eventually led to 6

code-groups. Condensation occurs in the third step, the content of the specific code groups is

reviewed and meanings are discovered (Malterud, 2012). During the fourth step, the

disconnected condensates of step three are restructured into main categories with selective

coding (Malterud, 2012, Miles & Huberman 1994). The code groups and corresponding nodes

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23 different patterns (Malterud, 2012). Patterns that are relevant for this research are frequency,

similarity and difference (Saldana, 2009). Concerning the validity of the analysis, eight

different cases offer eight possibly different perspectives on optimal differentiation, which

means that the validity of the outcomes of the analysis strengthened by data-source triangulation

(Carter et al., 2014).

All types of coding have been done with the use of the qualitative data analysis program

NVIVO. Cross-case analysis per node is conducted to find interrelated phenomena in the form

of the earlier mentioned patterns. The patterns are illustrated with the use of translated quotes

in the result chapter. The original quotes with the corresponding translation can be found per

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5. Results

In this part of the thesis, the interview results are displayed. Quotes in the result section

are translated from Dutch to English. The original quotes and corresponding translations can be

found in Appendix 3. Names of clubs have been replaced by Club A, Club B, Club C etc. and

personal names of artists by Artist 1., Artist 2, Artist 3. etc. to guarantee the anonymity of the

interviewees.

5.1 Categorization Practices

A nightclub begins with a location that functions as a place for social interaction,

anonymity and for displaying and experiencing electronic music. This location can take an

infinite amount of forms, not necessarily one of a building. Multiple interviewees gave the

example of a club that recently opened and is located on a ship. Also, many interviewees have

stressed the fact that clubbing can take place outdoors. Physical aspects interviewees describe

as essential for a legitimate nightclub are proper lighting and a good quality sound system that

can that can provide music at a certain volume to the entire venue capacity:

“I think as a nightclub, well yes you start of course with the basics which mean installing

sound and lighting in there.”- Interviewee 4.

"Music is a crucial element and also at a certain volume, I think. So hard that you can really feel it, so the volume has to be pretty hard. I think these are the most important elements for nightclubs in general.”- Interviewee 9.

Other categorizing practices seem to be more abstract. They concern the choice of

music, frequency and date of events, promotional activities and whether you as a club have

somewhat the same ideology as the scene/community or not. Most of the interviewees identified

the musical programming as an highly important categorization practice. The main genre is

electronic music and for being perceived as a legitimate club, musical bookings to some extent

have to show overlap with the rest of the clubs in both form and content:

"In my opinion, many clubs booked the same artists. I also book a lot of the same artist you know. I also book Woody, Max, Oceanic and that kind of stuff. In this aspect, you can find

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some sort of established layer of artists throughout the scene that shows a lot of overlap with many different clubs.”- Interviewee 8.

"Yes, every nightclub programs electronic music. At least, something we define as a nightclub, let me put it like that. And yes what else the place has to offer next to the music is entirely depended on the place.”- Interviewee 3.

"Well yes every club has to create their own identity, but for clubs that program in similar styles, you see a lot of different factors are done in a similar manner. So you don't program two nights of techno in a row, but you always book one night this the other night that. That means if you are only open on the Friday and Saturday at least, then most clubs are focused on programming in such a way.”- Interviewee 1.

Another categorization practice that is seen as crucial for being perceived as a legitimate

nightclub is the communication, PR and online appearance. These three elements display the

identity a nightclub adopts. The main goal of these practices is two-fold and slightly differs per

medium. First, when first opening, pictures and (positive) press-releases on prominent online

magazines help gain a legitimate spot in the existing market and enable being perceived as a

serious international player:

"But I also think that it has something to do with announcing your ambitions and doing this is sort of an international way. This way you are taken the most serious and I think that the most simple example of such practice is that when you open you make sure you are mentioned in a press release on Resident Advisor. If you have this set you count in the industry and if you don't you don't count. So this is what everybody does.”- Interviewee 4.

Second, after establishing a spot within the market, a consistent, well-structured and

frequent use of social media is described as important for presenting yourself as a legitimate

club. Facebook appears to be the main tool for this. The online profile communicates the

identity of the club and helps visitors to match this to their own identity. Not every club engages

in the same promotion and marketing strategy. However, every club picks a strategy that suits

them to communicate that they indeed are a club, making this an important categorization

practice. Consistency is described as key for this practice, especially in the tone of voice of your

promotion:

" Communication is the way you present yourself to the outside world. This has to suit you, don’t act like you are something which you are not. I can be daring in your communication. And just like your program, your commutation has to be able to surprise people sometimes but

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make sure to do this in the right tone of voice. This has everything to do with the texts, photo, images and type of linguistics you use. It also has to do with how and what kind of posts you spread. Communication nowadays have become more important than ever.”- Interviewee 10.

“No, I think nightclubs are very occupied with presenting themselves via social media, that really is something from this age. To try to create an identity in a marketing kind of way, so people can get a specific feeling with the actual nightclub which helps them to identify themselves with this venue.” - Interviewee 4.

“Our marketing person is always very precise in making sure everything has one tone of voice. This tone works for us, this is where we stick to.”- Interviewee 6.

All of the interviewees seem to agree that promotion and communication are important

categorization practices. However, not all of them seems to know how to properly execute them.

Two interviewees explain they understand the importance of communication. Yet they do not

understand how to generate a consistent online promotional image of themselves suggests they

are a legitimate club. Interviewee 8. explains that if the club where he works would have a

stronger and more consistent online appearance as a legitimate club, it would be able to

categorize itself as such in the minds of potential visitors. This will probably add to the success:

“Sometimes it is very crowded at our club and sometimes it is not. I wish we could be more consciously occupied with profiling ourselves as a nightclub within the market. But to be honest, I do not know that well how we should do this. Furthermore, I think our programming is really the thing that distinguishes us as a legitimate club. That is something we definitely do on purpose.” - Interviewee 8.

Another pillar for nightclub category membership is that these are places with a different

set of rules compared to the outside world. Interviewees describe nightclubs as places of

freedom, expression, and openness. They allow personal/individual experimentation and

experiments in a group dynamic. Nightclubs are places where people can be almost totally

anonymous, relax, rewind, dance and experiment with art, culture, sex and drugs in a safe

(nonjudgmental) environment.

"That we are a place where people can dance, listen to music and be under influence in a completely free world. For that matter, we are of course just like all other clubs and this places us in the nightclub category.”- Interviewee 6.

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"I think nightclubs are really very emotional breeding grounds and cultural breeding grounds. You can really explore your own boundaries because it is a world in which no-one really keeps an eye on you.”- Interviewee 8.

These norms and values are communicated in a similar way throughout the industry and

therefore appear to be an indicator for category membership. Communication outside the club

occurs with the use of house rules and a door policy. House rules notify people beforehand what

the rules of the game inside the club are. The door host is the one in charge of the door policy.

This person filters out people at the door before entrance who have a high potential of breaking

these rules. Once inside, the staff communicates these norms and values to the visitors:

“I think that for example that something such as having house rules is very defining for

a nightclub.”- Interviewee 3.

"Yes, well, our door policy, we just look at whether certain people look like they are a fit with our club or not. Our door host is super good at this and she perfectly senses what people make a good fit. Also visitors can be slightly drunk, that’s no problem at all. More important is whether someone seems like a fun addition to the night or can cause trouble, these are our most important criteria for checking which people are allowed entrance.”- Interviewee 11.

"Freedom also has something to do with how are approached by our club and security staff. Our security staff tries to move very discreetly through the crowd and only address people if you show border-crossing behavior. This is important because a nightclub often is a place for visitors to experiment with themselves and others. These experiments do not always succeed, therefore it is important that our visitors understand that when such experiment goes a bit less well, they can ask anybody in our building for help.”- Interviewee 3.

On a side note, this does not mean that for every club the exact same set of rules apply.

It implies that having such rules indicates category membership. Some clubs namely only filter

out the people that appear to be too intoxicated or aggressive, while others have more strict

house rules and selection procedures. Almost all the interviewees mentioned a door policy and

even the ones that claimed to not have one, do have a door host who can either accept or refuse

people.

The last pillar identified by the interviewees as an indicator of valid category

membership is membership of one or multiple communities. These communities are often

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28 audiences the club attracts. For being perceived as legitimate by these communities, active

membership is required. The keywords here are "matching identities", meaning that the club’s identity has to match or at least show a large overlap with the identities of the audiences. Both

in artistic preferences and ideology:

“When people say you are an underground club, I think you are not underground, you become underground. You are not underground as a club, you become this thanks to your audiences. I think this very often. And I think at our venue this is a very nice organically grown thing. So yes we are a nightclub, but we are actually also more a community and the nightclub is a part of this.”- Interviewee 6.

“I think we bring people together visitors, artist, our programmer and our art director people who all have the same perspective on what they think is beautiful. Like the saying, like attracts like.”- Interviewee 3.

Being an active community member thus increases your chances of being perceived as

a legitimate category member.

5.2 Differentiation practices

The main objective of this research is to find out how optimal differentiation within the

cultural industry occurs. The short answer to this question this appears to be: find a relevant

gap in the market and add something to the existing offer, as illustrated in the quote below: “This is something that will never happen, but I think that if you open a club that has the same ideology, same capacity, you present your club in a similar way as another club and book the same artists. You might cause both clubs to be half full which in my opinion means that you are not adding much to the existing offer.” - Interviewee 9.

These gaps however can, as the above-mentioned quote already assumes, come a

numerous amount of forms. An method to find a relevant gap that is used in six of the eight

cases, is to find a social issue that is underrepresented within the industry and make decisions

based on improving this issue. For example, choose creative elements to improve diversity,

sexual freedom, freedom as a whole, public opinion towards refugees or protest against

governmental cutbacks on cultural funding:

“Diversity is very important, specific music belongs to for example different ethnical groups and we feel it is important that people that have a special connection with these specific

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types of music are offered a place to perform. We’d rather have a very diverse schooled artist that can make everybody feel at home than someone with a so to say fetish for one sound.”- Interviewee 9.

"We have planted a tree here outside the club with a sign saying: "love is the message". That was part of the freedom dinner, something we really enjoy doing but definitely doesn't pay the rent. We have planted the tree for the freedom dinner on the fifth of May, a dinner we organize every year with the purpose to bring people together and talk about freedom. We invite a speaker to remember people that freedom is not a given, but that it is something where a lot of people have fought for in the past. Something that also fits our vision as a club.”- Interviewee 7.

Another way to differentiate is, as already touched upon in categorization chapter, the

door policy. As explained, all cases to some extent have a door policy, yet the strictness of this

policy differs a lot throughout the industry. Exclusivity thus seems to create gaps in the market

and offers possibilities for clubs to differentiate:

“Difference between our club and other clubs can be found in the people we allow or refuse entrance. We have a door policy which means that our door host that talks to people that want to enter, so visitors exactly know what we are and where they indulge themselves in.” - Interviewee 3.

"We do not want to be an exclusive place or a club that doesn't let anybody in. Which happens a lot at other clubs, that people are not allowed entrance. I want to be placed where everybody can come to experience the music. So, of course, we also ask at the door to visitors, do you know who is playing tonight? And if they don't, our door staff explains this and people are still allowed entrance. This is what we find important, to provide high-quality music and make this accessible for everybody who's interested in this.” - Interviewee 1.

Differentiation in the physical appearance of clubs occurs in every case, in an almost

infinite amount of ways and does not seem to have strict guidelines. Some cases make sure that

every edition their physical appearance is different form the edition before. Others sporadically

change their appearance. Also, many clubs aim at finding gaps in opening and closing times to

offer different experiences with introducing clubbing at unorthodox times.

“If you have not visited our venue for two months and you come again it will be completely different.”- Interviewee 2.

"Physically speaking we have a garden which is something not all clubs have. Besides that, we also have a room that can be used during the day because it has a lot of windows.” - Interviewee 3.

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“We make sure that our venue looks every edition completely different. This entails, completely repainting everything from the bottom to the top, every month a new theme, artists that place objects in our clubbing areas and we build our toilet cabins by ourselves to collect feces in hay for heating our club.”- Interviewee 6.

Gaps are also found and filled by category spanning. Clubs span categories to offering

more impulses than just music and lighting by becoming a cross-over between a club and a bar,

restaurant, café, gym, extreme sports area, theatre, cinema, karaoke, game hall or even a ballet:

“We are a nightclub and a bar in Amsterdam North, o yes and also a restaurant by the way.”- Interviewee 8.

"I think Artist A really is a symbol for what we do here at Club A. We really have become a platform for visual artists to experiment and they also understand that for them there are no boundaries here. And you notice that in a couple of more venues in the Netherlands they start doing the same. If you, for example, look at Amsterdam, Club E also just opened a gallery.”- Interviewee 5.

"One of our rooms which is always open is the lobby. We have placed all kinds of games in the lobby so this element is always apparent during our club nights. Maybe this is a point of difference for us as well. Games. People can play air hockey or something like that, we have a couple of these games in our lobby. This is something we have always had, right from the start. Also during the summer nights when everybody is enjoying the weather outside in our garden, we usually put a ping-pong table on the dancefloor so everybody people can play ping-pong.”- Interviewee 11.

A valuable insight given by one of the interviewees; differentiation through category

spanning and the addition of creative elements other than music, seems to know no upper limit.

People are extremely receptive for new impulses and tolerate a lot. A somewhat absurdist

example of this is given by interviewee 5. of this is written below:

"Another work I thought was super special, was that during a weekender we asked a visual artist to give a lecture about the relationship between noise as a sound within the visual arts and noised as a sound within club culture. This was a rather theoretical academical reading, and yet about 50 were sitting on the floor and listening to this very quietly and attentively. So yes we really can go far here with experimenting. And in the meantime, people also have begun to expect this from.”- Interviewee 5.

Interviewee 5. provided a valuable side note to this. She explained that differentiation

practices like category spanning and the addition different artistic practices within the club offer

almost limitless differentiation, however these are just a minor activator for attracting potential

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31 tickets. Therefore differentiation in music comes with a higher risk and is more complicated

practice:

“It is important to note that there is a lot more pressure to perform on the shoulders of one in charge of the musical programming than on my shoulders as an artistic programmer. People namely buy a ticket for Club A, primarily because of the music that is being programmed. Not so much because of the art. Which means that I am not under pressure to reach certain visitors quota.” - Interviewee 5.

This, however, does not mean that differentiation within the musical programming does

not occur. On the contrary, it throughout all the analyzed cases. However, as interviewees 8.

explains being a 100% renewing atistswise is nearly impossible:

"You can never be totally renewing because you book an artist and these exist not only to perform at your venue. They are existing people who are not new. But it is possible to combine the artist in different ways so you offer a combination that is renewing. It will always be possible to offer renewing combinations of artists. Also, we program a lot relatively unknown DJs that do have a true fanbase here in Amsterdam. This also is a well-working criterium for us to book an artist.” - Interviewee 8.

"As a programmer, you always have to consider the context of the setting in which you book artists. Maybe one DJ you book does not activate people to buy tickets and another one that night does. But booking these artists together, maybe the mixture of these two artists combined is what makes the night musically interesting or exciting. So you have to for possible interesting connections among artists and look for combinations.”- Interviewee 10.

Even though being 100% renewing artistwise is impossible, interviewees 8. and 10. state

that differentiation can occur by booking artist in different formations. This method is used in

multiple cases and therefore appears to be a frequently used differentiation practice throughout

the clubbing industry. Also, many cases book relatively new artists under the guise of

differentiation. Often having a small local fanbases, or that have the potential to gain one is a

precondition for such artists to be booked. Interviewee 4. explains that this method for musical

differentiation and can be understood as a future investment:

"If you book relatively new artists in which you see potential it, you can book him with the philosophy that if you book the artist in this phase of his/her career you might not sell out immediately. But what it can offer you is that when this artist has made it and become big in one or two years, he/she can think club A gave me a chance back then when I was growing so I'd rather go play there when I am in the Netherlands than anywhere else.”- Interviewee 4.

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32 Differentiation in the main musical genres is unusual. The main genres are identified by

multiple interviewees as Techno, House and Minimal. Some nightclubs do sporadically

differentiate from these genres, but even then the new genres often are strongly related to

electronic music or in combination with electronic music like hip-hop, disco or drum’n bass.

Musical differentiation occurs more often by introducing new artists within the established

genres. In seven out of eight cases, interviewees explain that they are constantly looking for

new artists that either perfectly suit their usual programming or have a completely new and

weird sound:

"Currently the industry has turned into rate race of who can find the newest sound (Interviewee 8)."

"I love to book artist that have slightly different sound then everybody else because. These are unique. For example DJ Slingshot, if you hear a new track from Slingshot you immediately know it’s his. That is what makes an artist refreshing, it is just something different. Every now and then an artist like this pops up and you think oke, wow, this is completely unique and resembles nothing sound wise. Eventually it is all electronic music of course, but these artists are hard to categorize among other artists.”- Interviewee 2.

Clubs program acts that are in line with their usual programming to create a signature

sound. The signature sound is described by multiple interviewees as the sound that fits the

identity of the club. This is an example of gap finding and adding to the existing offer because

this suggest that if the club did not exists, this sound and the accompanying artists would be

underrepresented in the industry. Another underrepresented group and thus a gap identified by

interviewee 9. are live artist. Producers that produce their electronic music live on stage instead

of mixing existing tracks. In case 6. and some others differentiation occurs by offering a stage

to live artist:

"We book a lot of electronic live act. I think that these are a bit ignored throughout the night live industry because they, in general, are more complicated and cost more money. This way we try to differentiate and add something to existing offer in Amsterdam market.”- Interviewee 9.

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33 Differentiation also occurs by booking acts that communicate the progressive image and

add to making social issues negotiable. For example, program artists with an eye on increased

diversity:

“Diversity is a topic we very actively incorporate into our programming.”- Interviewee 8.

“For example female DJs, I think it is important to help them increase their chances of success and offer them a place on stage. So these I am very actively looking for. So I really keep an eye on which female DJs have good productions an which ones are upcoming.”- Interviewee 1.

Differentiation however is never is risk-free and therefore tactful differentiation is

important. Interviewees discussed multiple manners of doing this. The core of most methods

consists of balancing financial and artistic incentives. The method that appeared to be deployed

in all cases is to spreading the financial risk over multiple nights. So programmers organize

club nights that upfront are more likely to sell out and club nights with more experimental artists

that will potentially generate a loss. The different nights have (partially) different target

audiences. The monthly programming is constructed in such a way that all target audiences are

satisfied and at the end of the month a breakeven point is reached. So profitable nights with this

method, profitable nights compensate for the more experimental practices, as explained in the

quote below:

“Programming is also partially a financial consideration. I think it is perfectly doable

to completely sell out two nights in a month and to program two other nights with a musically very interesting and experimental artist that will highly likely cause you to lose money, and stripe these night off against each other so you financially end up playing even. Then you have done a good job.” - Interviewee 4.

Interviewee 6. and 10. Explain that engaging in differentiation with a high change of

generating a loss, can be used as a tool to identify yourself as a progressive club:

"We sometimes make decisions that do not bring us anything financially but add a lot to who we can profile ourselves as a whole. And of course, on the other hand, you sometimes

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make choices to become more financially stable and allow you to continue existing (Interviewee 6)."

A second strategy that can be identified, is one that balances out more popular and more

experimental artists during one club night:

"You try to find big established artists and some more upcoming artist and program these in a combination so you programming remains interesting while simultaneously attracting people. - Interviewee 1.

This strategy is used in six of the eight cases, which suggest that this strategy has a

higher risk. Compared to the first, every club night in the second strategy contains a risk factor.

This risk factor is kept to a minimum by making estimation about the ticket sales. When it is

unclear whether a night will sell out, it is best to pick all the artist based on matching identities

with the club, the potential audience and the other artists:

“When you book somebody you do not immediately come with a price offer, but first you

inform the artist and the agency why you feel there is a match between the artist and your club. You think of a concept for the night and preferably book artists that know each other personally already, so you know there is a mutual cohesion among the artists.”- Interviewee 4.

When a night is strongly expected to sell out, experiment and surprise seem to be more

legitimized as explained by interviewee 2. below:

“The bigger events and certain concepts we have already been organizing for a long

time and which are almost guaranteed going to be sold out, are the events that allow you differentiate music wise. You can book very exciting artists and surprise people so they think like, wow what was that?! It was super awesome and really something I haven't heard before.”- Interviewee 2.

Most cases seem to utilize a mixture both strategies proposed. Noteworthy, is that cases

with more regular visitors engage less in the first strategy. This does not per definition make

these places more experimental or more differentiating than the other places. More regular

visitors might indicate that the club has an identity that is strongly connected to one specific

community. This can allow the club to experiment more within the genres, subgenres, and

sound that is linked to this group. However, this also assumes that experimenting with new

Optimal differentiation in cultural industries : an exploratory study in the Dutch clubbing industry