How to create a blockbuster

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Anita Elberse’s [amazon_link id=”0571309224″ target=”_blank” ]Blockbusters: Why Big Hits and Big Risks are the Future of the Entertainment Business[/amazon_link] is published in the UK in January (it was out in the US earlier in 2013). It’s a clear and well-written series of case studies in how various branches of the entertainment business – movies, pop music, TV shows, books, sport – rely on a ‘blockbuster’ strategy as a business model.

[amazon_image id=”0571309224″ link=”true” target=”_blank” size=”medium” ]Blockbusters: Why Big Hits – and Big Risks – are the Future of the Entertainment Business[/amazon_image]

The economic analysis underlying the argument is not new. It can be traced back to Sherwin Rosen’s 1981 paper on the Economics of Superstars. I wrote about the way digital technologies were amplifying the superstar effect in my 1996 book, The Weightless World (pdf). However, Blockbusters provides plenty of examples of how the analysis translates to the real world. There are many interesting case studies in the book, albeit all American. Elberse also shows very convincingly how the blockbuster business model stacks up, based on her research experience talking to many of the firms she describes – she cites the revenue and cost data for specific movie releases, for example. A Harvard Business School professor, she clearly has terrific experience across a range of entertainment industries, and the details are fascinating. If you can afford to market a new release or title at scale, you’d be an idiot not too.

This means the [amazon_link id=”184413850X” target=”_blank” ]Long Tail[/amazon_link] idea is largely wishful thinking. The profit margins from the handful of blockbusters might support the production of a long tail but it isn’t even the case that there will always be a long tail because producers don’t know which will become hits. For although there is indeed great risk involved in releasing a possible blockbuster, few films or books or albums become blockbusters without a deliberate marketing effort. And scale in marketing is almost always decisive; the book cites a few grassroots successes, such as Lady Gaga’s first album, but they are obviously exceptional. So this means there is little prospect of Hollywood moving away from the model of putting resource including marketing into successful franchises, and most of what will be on offer will be of the same ilk as Harry Potter I to VII, The Hunger Games I to N, etc. Celebrities will only grow larger and more monstrous.

The book ends on the suggestion that the blockbuster strategy is going to have to be adopted by a growing range of businesses. Elberse gives the examples of Apple and Victoria’s Secret for their successful deployment of spectacle around a few products. “Apple releases fewer products and product variations than virtually all its competitors in computer hardware,” she writes. It makes just a few bets, in both production and marketing, in contrast to its competitors.

If I were an executive in any of the entertainment businesses, I’d regard this book as a must-read and consider its lessons very seriously. As a citizen, and a non-American, I found it a bit depressing. As a non-American because the US economic advantage of the scale of the domestic market is becoming even more pronounced than ever; the benefits of that scale are often overlooked anyway. They are even greater in digital markets where fixed costs (including or especially marketing) are high, and marginal cost is low to zero. As a citizen because –  although it would be overstating things to say everything is becoming Hollywoodised and dominated by celebrity – there is something in this.

It is obviously possible to declare independence from popular US-originated or US-inflected celebrity culture, and graze around the vast steppes of the internet for other cultural products. Other countries do succeed in different ways in supporting their own culture. There are different kinds of celebrity – Professor Brian Cox as well as Lady Gaga. Still, it seems it will have to be an increasingly active decision to opt out of Celeb-land. [amazon_link id=”0099518473″ target=”_blank” ]Brave New World[/amazon_link]?

Books from Santa

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He’s got my number.

A book is for life, not just for Christmas

Given the name of my consultancy business, I might have to start with Anthony Pagden’s [amazon_link id=”019966093X” target=”_blank” ]The Enlightenment and Why it Still Matters[/amazon_link]. I’m very keen to read both [amazon_link id=”1408842068″ target=”_blank” ]Writing on the Wall[/amazon_link] and [amazon_link id=”0091944554″ target=”_blank” ]An Officer and A Spy[/amazon_link]. [amazon_link id=”059307047X” target=”_blank” ]The Everything Store[/amazon_link] has the imprimatur of the FT Business Book of the Year prize. [amazon_link id=”0300188226″ target=”_blank” ]The Theory that Would Not Die[/amazon_link] about Bayes’ Theorem was recommended by a reader of this blog. And what’s a holiday without a detective novel – the blurb on the back tells me [amazon_link id=”0349000115″ target=”_blank” ]The Black Rose of Florence[/amazon_link] is a global best seller, although I’m not sure whether that’s a good or bad thing.

The invisible modern

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T.J. Clark’s essay ‘Lowry’s Other England’ in [amazon_link id=”1849761221″ target=”_blank” ]Lowry and the Painting of Modern Life[/amazon_link] is fascinating. He asks why modernism in art turned so decisively away from representing modern life. “There must have been something in the 20th century shape of things that meant that looking for modernity’s location, or its typical subjects, was in itself to misrecognise the way we live now.  … Why was there no ‘painting of modern life’ – or none that Degas and Baudelaire would have recognised? Because modernity no longer presented itself as a distinctive territory, a recognisable new form of space.” He goes on to argue that people who painted or created art came to lead a life physically entirely separate from the masses, Lowry being an exception because of his day job as a rent collector. The classes separated – “The ‘modern’ became a system of separateness – accompanied of course by a more and more coercive machinery of being together-in-what-you-buy.” And then increasingly modern life went indoors, has become personalised, focused on the TV and digital gadgets, and is now increasingly intangible too. Documenting modern life passed entirely from painting to photography.

[amazon_image id=”1849761221″ link=”true” target=”_blank” size=”medium” ]Lowry and the Painting of Modern Life[/amazon_image]

As a distinguished art professor, Clark doesn’t say that a taste for ‘modern’ art is very much acquired as part of a class-stratified upbringing and education, and the working classes (I generalise hugely) tend to like painters looked down on by the art establishment eg Jack Vettriano. And that part of the reason painters like Lowry have been controversial among the experts is not because they’re not good but because they’re popular.

Liking the unlikeable, on the other hand, is a badge of social status. The social elements make the art market absolutely fascinating, yet the most thoughtful economic analyses have come from Marxists (and a long time ago at that) such as Walter Benjamin in [amazon_link id=”0141036192″ target=”_blank” ]The Work of Art in the Age of Mechanical Reproduction [/amazon_link]and Theodore Adorno in [amazon_link id=”0415253802″ target=”_blank” ]The Culture Industry[/amazon_link]. Conventional modern economics seems mainly interested in whether or not buying paintings is a ‘rational’ investment.

[amazon_image id=”0141036192″ link=”true” target=”_blank” size=”medium” ]The Work of Art in the Age of Mechanical Reproduction (Penguin Great Ideas)[/amazon_image]

And of course, as per recent posts, paintings are supremely positional goods.

What does work look like?

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I’m gliding into holiday reading, and have devoured a fine, albeit rather depressing, novel, Jon McGregor’s [amazon_link id=”0747561575″ target=”_blank” ]If nobody speaks of remarkable things[/amazon_link]. Now I’m well into the introductory sections of [amazon_link id=”1849761221″ target=”_blank” ]Lowry and the Painting of Modern Life[/amazon_link] by T.J.Clark and Anne Wagner, the catalogue of the recent, fine Tate exhibition they curated. It’s a brilliant essay – I’m a Lowry fan being from those parts.

They point out that: “England – we constantly shift between ‘England’ and ‘Britain’ in this book, and always on purpose – has been by and large so determined to evade, in representation, the dull catastrophe of its post-Imperial, post-Industrial-Revolution condition. Lowry does not.”

[amazon_image id=”1849761221″ link=”true” target=”_blank” size=”medium” ]Lowry and the Painting of Modern Life[/amazon_image]

This reminded me an essay by Hilary Mantel I read years ago, about the extremely narrow construction of English identity, in terms of stately homes, rolling green hills, cricket on the village green, CofE church socials run by Miss Marple, etc. Even Orwell (famously) caricatured it this way. What hope for a northern (English), working class, female of Irish Catholic descent, like her, to feel a sense of national identity, asked Mantel. (The other nations of the UK are different, of course.) I can’t track the exact quotation down now – I’d thought it was in her excellent memoir [amazon_link id=”0007142722″ target=”_blank” ]Giving Up The Ghost[/amazon_link], but can’t find it this morning.

The other aspect of modern life Lowry captures is of course work, work in the mills. Until around a decade ago there was very little English fiction about work. David Lodge’s [amazon_link id=”0099554186″ target=”_blank” ]Nice Work[/amazon_link] stood out as a bit of an exception. This was a great contrast with the days of [amazon_link id=”014143967X” target=”_blank” ]Dickens[/amazon_link], [amazon_link id=”014043464X” target=”_blank” ]Mrs Gaskell[/amazon_link], [amazon_link id=”046087781X” target=”_blank” ]George Gissing[/amazon_link] and their peers, writing about the effect of the Industrial Revolution on work and other aspects of life. I think this is changing now, and there is some fiction about post-Internet working life (nominations for good examples, please).

[amazon_image id=”0099554186″ link=”true” target=”_blank” size=”medium” ]Nice Work[/amazon_image]

However, visual representations of modern working life seem rarer – I can’t think of any. Cotton mills and assembly lines are iconic. But rows of people tapping away at terminals? Why is it so hard to visualise modern work?

Hirsch on Galbraith

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More on Fred Hirsch’s[amazon_link id=”0415119588″ target=”_blank” ] Social Limits to Growth[/amazon_link].

[amazon_image id=”0415119588″ link=”true” target=”_blank” size=”medium” ]Social Limits to Growth[/amazon_image]

Hirsch has a chapter on J K Galbraith’s book [amazon_link id=”014013610X” target=”_blank” ]The Affluent Society[/amazon_link], with its famous description of ‘private affluence and public squalor’. Hirsch comments that Galbraith’s critique is apt but misses a key point in arguing that the problem is one of incorrect priorities, of insufficient attention and money directed to the public domain. [amazon_link id=”0415119588″ target=”_blank” ]Social Limits to Growth [/amazon_link]argues that there is a fundamental adding up problem in capitalist societies: the market excels at satisfying individual wants, but not all individuals can get what they want – by definition whenever you accept positional goods to be significant. Whether resources are allocated through the market or by the government is irrelevant. Moreover, attempting to satisfy all individuals’ wants through public spending sets taxation and expenditure on an ever-upward trajectory.

[amazon_image id=”014013610X” link=”true” target=”_blank” size=”medium” ]The Affluent Society (Penguin economics)[/amazon_image]