Thursday, February 02, 2006
Publishing 2.0 - Death of the Blockbuster Edition
Scott K has a very cool post up, which has some very nice things to say about me.
He quotes this very interesting comment:
"...the majority of people WANT blockbusters. It may seem to media economists that everyone should have a highly sophisticated strategy for consuming media in reconstituted microchunks through smart aggregators, just as they do, but a significant portion of the populace may not want to invest a lot of their precious time figuring out this Media 2.0 environment and will instead stick to a few trusted sources."
Let's count the ways in which this is wrong:
1. Intuitively: do you really want blockbusters? Come on...
2. Existence proof: retursn to blockbusters are, in fact, eroding - just ask Hollywood, or check out the latest graphs up at Chris's Long Tail blog.
3) By definition. A blockbuster is something that has a little bit of everything for everyone. That's because people have vastly different preferences. When distribution is scarce, you have to bundle a little bit of what everyone wants into big blockbusters, which can be marketed over and over again. When distribution is abundant, everyone can have whatever they're willing to pay for.
That's theory, sure. But it's also exactly what we see emerging in the world around us. You can think of the Long Tail - or an exploding number of other examples (blogs, MySpace, search, Zara/H&M, Lego Factory, etc).
4) Now, the point is that of course very few people will invest a great deal of time in individualizing their choices in an exploding consumptionscape. That's exactly the opportunity for all things 2.0 - that's why and how they create very real economic value; or, conversely, why blockbusters create less and less value.
5) Don't misunderstand: this is not to say that professionally produced media will die. In fact, it's strongly complementary with micromedia. What it does mean is that the blockbuster as a strategy for producing and marketing media will die - and we'll see less marketing investment, and more production investment.
Even given this "exploding consumptionscape", it seems to me that many people will continue to be guided by peer pressure and other group psychology stimuli.
And that'll start to generate a Zipfian distribution of choices, admittedly flattened dramatically by the smart aggregators, but it'll be there nonetheless, surely?
(Please feel free to correct me - I'm no economist and I'm still trying to understand the finer details of all of this)
Talent is the scarce resource that doesn't factor well into the Media 2.0 economic model. Exceptional talent will continue to produce exceptionally valuable content. Ridley Scott will not simply retire and say "Oh well, there is no place for me" nor is Ridley the "product" of a Media 1.0 economic world. Some people are
hyper-talented, and some apparent talent is
manufactured. Media 2.0 will make the differences more obvious, and change the opportunity landscape.
Not all hyper-talented individuals will choose forms that microchunk well. Art knows no bounds. For some like Madonna, form derives from function. For others, like Warhol, function is appropriated by form.
One really important word that occurs frequently in Hagel's excellent article is "talent". Too many media theorists assume that in a world of plentiful media the value of media will reach zero. While it is true that the cost of the distribution
of media will reach zero, the value
is quite different. The difference can be accounted for by talent, star quality, and contemporary focus (DJ remixes of Elvis tunes are more popular than the tunes themselves sometimes).
The 2.0 challenge for Media 1.0 companies is to try to figure out how to connect two scarce resources: talent and audience attention. And indeed, for reasons you have so deftly outlined, it will be a totally different game.
It's a bit risky for me to even comment here. I'm still learning more and more from your work, Umair, and you are responsible for the elimination of several layers of dust on my economic bookshelf. Thank you.
But you do need to be careful not to flatten media into an undifferentiated resource, and focus a bit more on how hyper-talent factors into the 2.0 model. The really important question is not whether the blockbuster "strategy" will die. It will. The question is, how will Ridley Scott and his successors create the cultural media events of of the future in the Media 2.0 landscape. There will
Let's differentiate between "blockbusters" - a bit of media that realizes huge returns because it maximizes utility - from *the blockbuster strategy* - marketing economies of scale and scope.
Don't conflate these - they're two very different things.
You're right. Of course talent will out. That's the whole point. This talent will, I'm betting, be recognized via snowballs - not blockbusters.
The snowball effect is another name for returns to [talent, creativity, etc] rising dramatically, as value creation becomes aligned with capture.
That's already happening - think about the new breed of bands getting famous via Myspace - they're snowballs, not blockbusters.
That's an interesting point. I think to extent cognitive biases will paly a role - and we see that they are; think about info contagion on Digg, etc.
But those are transitory phenomena.
Think about the stock market - in the short term, it's hugely irrational. In the medium term, it's at least fairly rational.
The same dynamics are already at work in 2.0
Thanks for the comments.
As a quick follow-up, and by pure coincidence, I just spotted an article on the BBC News website entitled Musical taste 'swayed by peers'
which reported on a study which found that:"...the power of group opinion meant people who visited a new songs website gave higher ratings to tunes which had been downloaded often.Participants were also more likely to download a song if they knew others had done so, creating a snowball effect."
There's a bit more on the BBC report, but no link to the actual research, unfortunately.
I'd be interested to see how much
of a factor these psychological factors will have on media 2.0 - whether they can influence things strongly in the long term or whether they're just currents and eddies that don't affect the course of the stream.