Our most ancient technology is story.
Shakespeare was right all along.
All the world’s a stage. That stage, however, would matter not at all, to any one of us, without an audience to absorb the story.
The audience plays its part as much as any actor, writer or producer. In fact, it may be the audience that matters most of all. We are each a part of it. We are all the audience.
The Audience is Us.
From the perspective of economics, we are, each and all of us, consumers. Which is to say that we, each and all of us, are buyers. We purchase, rent and buy into almost everything that maintains our lives, our livelihoods and our lifestyles.
From food & water, to clothes, cars and homes to who we believe in, vote for and identify with as individuals, families, communities and nations, we consume the information and common-knowledge that binds us as Humans into the various markets in which we spend our time, attention, money, labour, love, obsession, acquiescence and outrage.
Each and all of these increasingly chaotic bazaars fall within one, all encompassing marketplace of ideas.
And into the marketplace of ideas enter the sellers. The storytellers. Each an artist of one type or another. Each conveying meaning that either resonates with us, the audience, or doesn’t.
When a story resonates, the meaning it conveys becomes common knowledge.
That is the power of narrative.
To understand this more fully, read: The Now Literal Reality of a Virtual Age
What is Narrative Economics?
The Nobel Prize-winning economist, Robert Shiller, coined the phrase, “going viral” to explain his observation that some stories spread like epidemics through the media to drive major market events. His view was that viral stories are an external, exogenous influence on market demand and price.
At the Media C-Suite, we believe that this describes the influence of story on markets as an effect. We’re more interested in the cause.
When we add a structural account to how stories generate credibility, shape trust and influence transactions, the explanatory power of Shiller’s epidemiological approach to Narrative Economics becomes much more than an observable effect on markets. We begin to see the cause of markets.
A wider and deeper view of Narrative Economics treats narrative as core economic infrastructure: the mechanism through which economic coordination occurs, how risks are interpreted, when trust is formed and why transactions are ultimately executed.
Markets do not simply respond to narratives; they are constituted by them. Once narrative is viewed as endogenous infrastructure around which economic coordination and transaction occurs, then the origin and mechanics of economic markets begin to clarify.
Our view from the Media C-Suite is that Narrative Economics explains how human beings use story to stabilise shared meaning, align expectations, generate credibility, extend trust and agree to commit scarce resources. Narrative offers a framework for understanding the conditions under which markets become possible.
The Narrative Model:
Narrative → Audience Resonance → Credibility → Narrative Capital → Proposition → Transaction → Outcome → Expectation–Outcome Adjustment
Facts alone don’t move markets. Data does not organise itself into action. Information does not tell people what to care about, who to trust or what future outcome is worth risking capital against.
Narrative does that work.
To better understand what narrative is and how it works, read: What is Narrative? How Stories Form Markets
Why Media & Entertainment is the Apex Industry
Narrative is story organised and deployed with purpose. It structures shared meaning, aligns expectation and prepares action as strategic objective.
Only one industry is entirely focused on the effective dissemination of narrative at scale.
Media & Entertainment is usually described in terms of its familiar verticals: film, television, music, games, publishing, news, advertising, sport, social media.
The Media & Entertainment industry is so much more than the sum of these parts. It is the industrial system through which humanity converts stories into meaning, meaning into common knowledge, common knowledge into belief, influence and demand, then demand into economic value.
That is why the Media & Entertainment industry is not peripheral to the global economy. It sits upstream of it.
Media & Entertainment is the only global industry whose core economic function is the production, distribution and monetisation of narrative. Its products are films, series, games, songs, formats, feeds, articles, podcasts, campaigns and platforms. Its deeper output is shared understanding.
The Media C-Suite defines M&E as “the complex system of creators, enterprises, rights-holders and infrastructures that originate, own, distribute and monetise intellectual property expressed as content in order to shape and monetise the attention of audiences.”
That definition changes the industry’s position in the global economy.
Other industries produce goods, services and infrastructure. M&E produces the interpretive environment in which those goods, services and infrastructures are accepted, rejected, trusted, feared, desired or ignored.
For greater understanding of this, Read: Narrative: Why Media & Entertainment is the World’s Apex Industry.
Further Reading
To dive deeper into how the Media C-Suite views the Media & Entertainment industry through the lens of Narrative Economics, read these articles:
Why the Marketplace of Ideas is the Only Market that Really Matters
By Thomas Kingston | Core Content
Narrative Economics: How Storytelling Becomes Economic Power
By Thomas Kingston | Core Content
