Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Friday, September 07, 2007

Strategy School: The Fallacy of Numbers, Starcom Mini Case Study

"...ComScore reported that, on average, 23.5 videos were consumed per user on YouTube over the course of the month, with an average 56.7 minutes for the month. The ComScore ABC Primetime report showed that, on average, users consumed 14 videos a month, but stayed an average length of 72.6 minutes a month per user. CBS showed similar results.

...Once all of these shows are on all platforms, people are going to watch prime content. That's not to say they aren't going to watch YouTube, but there's a lot of hype that the tail is really long, and what I'm saying is all this content is going to find its place and the tail is not that long."

This is a strange - and fascinating - quote, by a pretty senior figure at Starcom/Publicis. It's a prime example of the fallacy of numbers.

Let's begin by noting that the conclusion (the tail isn't really that long) in no way logically follows from the premises (the consumption numbers she quotes). The numbers can allow us to draw any number of conclusions.

Now, numbers in media are barely reliable to begin with. But the real problem is that, more deeply, they often blind us to strategic reality.

Look, there's a massive existence proof - one the size of Jupiter - that the tail is, in economic reality, pretty long.

What's that? That ad networks are exploding across the mediascape. These networks exist to make sense of the tail, and to try and profit from consumption along the tail.

Scheppach's quote, then, really is another case of intellectual bankruptcy in today's media industry. This - the lack of real economic arguments - is the real cause of the strategy decay that's ripping the old value chain - and yesterday's business models - to shreds.

In this case, a decision maker has relied on shaky numbers - and then drawn a very, very shady conclusion from them.

Unsurprisingly, the conclusion is really just one of the same old big media assumptions in disguise (mass media content is still king).

Of course, that's not a real argument. It's just sophistry; a basic flaw in logic, a total error in thinking renders this anti-argument utterly irrelevant.

Especially to the harsh reality that, very simply, an exploding number of ad nets are like a massive neon sign telling us that a newer, more efficient value chain is being refashioned by radical innovators - exactly because the tail is lengthening.

-- umair // 1:26 PM // 2 comments


Total bromide for a scared shitless industry.

Like saying, ‘I see the sun out. It must be perfect weather all over the world.’

The market for stories that matter to people is hugely elastic. Think about how you can be immersed in a banal, crap-quality video because it's someone you know.

The context of knowing that person is what makes the stories engaging. That is the long tail.
// Anonymous James // 6:36 PM

Great post!

No doubt the bottom up media revolution is just beginning. The only question is can we keep control or will the big media monopolies find a way to put the genie back in the bottle.

I hope not.

Blog on!
Rick Calvert, CEM
CEO & Co-founder
BlogWorld & New Media Expo
// Anonymous Anonymous // 6:09 AM
Post a Comment

Recent Tweets


    due diligence
    a vc
    tj's weblog
    venture chronicles
    the big picture
    bill burnham
    babak nivi
    n-c thoughts
    london gsb

    chicago fed
    dallas fed
    ny fed
    world bank
    nouriel roubini


    uhaque (dot) mba2003 (at) london (dot) edu


    atom feed

    technorati profile

    blog archives