Stylistic Differentiation in Cultural Markets: The Benefits of Conspicuous Category Spanning

A consistent finding in research on cultural markets is that innovation often involves recombining stylistic features across categorical boundaries. Cultural products routinely borrow features from other categories while maintaining their primary classification. However, we observe considerable variance in outcomes: Some borrowing achieves remarkable success, whereas others fail spectacularly. Existing theories of optimal differentiation and category spanning tell us that balancing familiarity and novelty matters and that improperly spanning categories can be costly, yet they provide limited guidance on how to differentiate effectively by borrowing features from alternative categories. Analyzing nearly 6,000 films and the narrative features they employ, I find that borrowing succeeds when products incorporate recognizable, familiar features from other categories. I further show that borrowing from sparsely populated categories provides greater benefits than borrowing from crowded ones, because audiences grow weary of features associated with oversaturated categories. These findings reconcile two influential but previously unconnected perspectives: the theory of optimal differentiation and the theory of category-spanning penalties. The results reveal conditions under which borrowing from other categories can enhance rather than diminish appeal and demonstrate that differentiation strategies succeed when borrowing is visible and interpretable to audiences.

Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2023.18354.