It would be wrong to imply that this scramble for stars was motivated purely by spite—greed played a role, too. By the nineteen-seventies, some record executives had concluded that it made more sense to pay for established hit-makers than to cultivate lots of so-called “baby acts” in the hopes that one of them would eventually grow up. “The pop-music business had a golden principle,” Dannen wrote. “There was an enormous amount of money to be made with a hit record, and no money to be made without one.”
When Dannen published his book, the old business model still worked. The record companies’ fat profits got fatter during the nineties, because of the compact-disk boom. Then, ten years after Dannen’s book appeared, the golden principle failed. In 2001, album sales started a sharp decline; some years, it seemed as if none of the big companies were making any money at all. Executives from television, film, and publishing began to wonder whether this would be their fate, too. It seemed possible that America’s long pop-culture boom, which spanned most of the twentieth century, was finally going bust.
This was a dominant refrain in the aughts; commentators mourned the disappearance of small record stores, big bookstores, broadly popular television programs. Chris Anderson, who was then the editor of Wired, had a more optimistic view: in 2006, he published “The Long Tail,” which celebrated the coming demise of “the hit-driven mindset” and the growing importance of online distribution. Using Netflix, Amazon, or iTunes, you could browse what Anderson called “the infinite aisle,” where vast inventories and smart suggestion software made it easy to shun blockbusters and follow your own passions, no matter how obscure. He argued that retailers, too, had been freed from the tyranny of the hit. Technology made it possible for businesses to profit by “selling less of more,” catering to an explosion of niche markets that, taken together, rivalled the size of the mainstream. Consumers were travelling down the demand curve, away from the head, where the most popular products lived, and out onto the tail, home of the miscellany, which was growing longer (as variety increased) and fatter (as sales of non-hits increased). The new popular culture would be more interesting and more efficient, catering to the ever more diverse tastes of a general public that was outgrowing its reliance on old-fashioned hit men.
Anderson’s book arrived with endorsements from new-economy moguls such as Eric Schmidt, of Google, who wrote, “Anderson’s insights with The Long Tail influence Google’s strategic thinking in a profound way.” (Anderson, in turn, praised Google’s innovative automated advertising program, which allowed small clients to create micro-targeted campaigns.) He also hailed a researcher named Anita Elberse, a professor of business administration at Harvard Business School, whose work on Netflix had been “very helpful.” Now Elberse has published “Blockbusters: Hit-making, Risk-taking, and the Big Business of Entertainment” (Henry Holt), which is a response to Anderson’s long-tail theory, and in many ways a refutation of it. In Elberse’s telling, today’s entertainment moguls, no less than Walter’s Warriors, spend much of their time finding ways to pay big money for big stars to make big hits. Her book, like Anderson’s, is full of congenial portraits of executives who think they have figured out this new economy. One of her most persuasive subjects is Schmidt, who revealed himself to be a long-tail apostate in 2008, scarcely two years after Anderson’s book was published. “Although the tail is very interesting, and we enable it, the vast majority of the revenue remains in the head,” he said. “In fact, it’s probable that the Internet will lead to larger blockbusters, more concentration of brands.”
Anderson’s book often read like a manifesto, cheering for the triumph of the underdogs while also predicting it. Elberse wants to reassure her readers that a hit—“The Avengers,” an N.F.L. game, a Taylor Swift album—still draws a crowd, showering profit on the corporations behind it. Her case studies are meant to demonstrate that popular culture remains big business, and that, in an increasingly complicated and unpredictable cultural marketplace, hits are more dominant than ever. The story she tells about the entertainment business resonates with a bigger story that people often tell about America, where Elberse sees “a winner-take-all dynamic” increasing the distance between the most economically productive citizens and everyone else. More efficient markets aren’t necessarily more diverse or more egalitarian, and perhaps there’s no reason that music or film or books should be immune from the forces of consolidation. Anderson assumed that consumers, once freed from the limitations of brick-and-mortar retail, would scatter into countless niches. In Elberse’s view, we would rather lump than split, and new technology—amplified by canny deal-making—is making us lumpier.
One of the executives central to “The Long Tail” was Reed Hastings, the C.E.O. of Netflix, the company that helped put video-rental stores out of business. Hastings told Anderson that while Blockbuster’s brick-and-mortar stores derived about ninety per cent of their business from new releases, Netflix’s business, built around mailing out DVDs, was only about thirty per cent new releases, partly because of its ability to offer individualized recommendations based on consumer data. Anderson called Netflix’s granular approach “a remarkable democratizing force in a remarkably undemocratic industry.” But, as Netflix expanded into streaming video, the company needed to secure licenses for its movies, rather than simply buying DVDs. And these licenses grew more expensive as film studios realized how lucrative streaming video could be. (If Netflix was making lots of money, that meant the studios were charging too little.) In response, Netflix did something that “The Long Tail” didn’t predict: in 2011, it decided to become a studio itself, spending something like a hundred million dollars to create an American version of the British political drama “House of Cards,” starring Kevin Spacey. Netflix has continued to produce expensive and attention-generating series, including “Hemlock Grove,” by the horror-movie auteur Eli Roth, and a revival of the surreal sitcom “Arrested Development.” Netflix, according to Elberse, is behaving “more like an old-school television network than the long-tail company it once seemed intent on becoming.” Last month, the Wall Street Journal reported that Netflix was negotiating with cable providers, in hopes of finding a place on set-top boxes.
The bedrock of Elberse’s “blockbuster strategy” is a willingness to invest in “premium” content, on the theory that a series of small ripples is no substitute for one big splash. She notes that YouTube, one of the Internet’s most miscellaneous destinations, has increasingly devoted itself to promoting its “Original Channels,” many of them tied to established stars or brands, like Jay Z or World Wrestling Entertainment. Elberse extends her analysis to blockbusters of all sorts, arguing that a grand enough event can “break through the clutter,” thereby justifying its cost. She tells the story of Real Madrid, the soccer team, which paid more than a hundred and thirty million dollars for the right to sign Cristiano Ronaldo, the Portuguese star; she explains how Lady Gaga’s team arranged for her 2011 album, “Born This Way,” to appear in twenty thousand shops, ranging from Starbucks to RadioShack. Elberse argues that the profusion of consumer choice only increases the pressure on big media companies to create grand spectacles that bring us together. Alan Horn, the chairman of Walt Disney Studios, tells her that he concentrates on “high production value” films precisely because people now go to so few movies per year: only a big event, he figures, will drag people out of their homes. “If entertainment businesses forgo making big bets on likely blockbusters,” Elberse writes, “they will find their channel power waning over time.”
Although Elberse’s book is written in the upbeat, anecdotal, gently exhortative style of an airport best-seller, she struggles to turn her observations into useful advice. One passage describes the strategy of Harry Sloan, a Hollywood executive who in 2005 was appointed chairman and C.E.O. of M-G-M, a venerable studio that had fallen behind its rivals. Sloan brokered a deal that was, in itself, a blockbuster: he signed up perhaps the biggest and most reliable movie star in the world, Tom Cruise, by offering him an equity stake and sweeping creative freedom. But the Cruise experiment was, Elberse concedes, “widely regarded as a disappointment.” Even Lady Gaga’s ubiquitous album release turns out to have been only a qualified success: “Born This Way” sold 2.3 million copies, roughly half the sales of her first album, “The Fame.” In Elberse’s telling, blockbusterism often seems less like a strategy and more like a tendency.
Is it a growing tendency? Elberse links the phenomenon to “the public’s ever-increasing fascination with celebrities,” while providing no evidence that we are increasingly fascinated with celebrities. Certainly a scholar wishing to conduct a thorough study of Kim Kardashian will find no shortage of primary and secondary sources—but there’s more available information about everything else, too. How, exactly, would we measure our interest in Kardashian against an earlier generation’s interest in Jacqueline Kennedy Onassis? A related difficulty applies to any consideration of “hits” or “blockbusters”: there’s no easy way to make comparisons across decades or across media. Using data from Warner Bros. and Grand Central Publishing, Elberse shows that the most expensive titles—the potential blockbusters—generally consume a big chunk of a corporation’s budget, while generating an even bigger chunk of its revenues. And yet, by many measures, earlier eras produced bigger hits. “Avatar” is generally considered the top-grossing film of all time, with worldwide earnings of more than $2.7 billion. But nearly three-quarters of that was earned overseas. If you consider only American ticket sales and adjust for inflation, you will find that “Gone with the Wind” earned more than twice as much, at a time when the U.S. population was less than half as big.
Even seemingly simple comparisons are trickier than they first appear. To demonstrate that “hits are gaining in relevance,” Elberse tells us that, from 2007 to 2011, a growing number of songs sold more than a million digital copies, accounting for a growing share of the digital-music market: thirty-six tracks, for seven per cent, in 2007; a hundred and two tracks, for fifteen per cent, in 2011. But the digital-music market, in general, was expanding during those years: more songs were released, more songs were bought, and more songs crossed the million-sale threshold. Yes, hits are important—and they always have been.
On this point, at least, Anderson would agree. Although “The Long Tail” proclaimed a coming revolution, Anderson was careful never to predict the demise of blockbusters. “Hits, like it or not, are here to stay,” he wrote. But he believed that the cultural power of hits was fading, and he presented his economic analysis as a moral crusade. “For too long,” he wrote, “we’ve been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop.” The language reflected his own tastes, which were self-consciously hip. (He was vexed by the popularity of boy bands and excited about a retro-futurist electronic genre known as “chip music,” which achieved micro-success in the aughts.) He hoped that more of us would discover “smaller artists who speak more authentically to their audience,” and that all of us might, at last, perceive “the true shape of demand in our culture.” He was flattering his readers by inviting them to be part of his community of connoisseurs. Long-tail economics would make good on the promise of the Internet, turning more people into experts on topics fewer people had heard of. Elberse flatters her readers, too. In her book, the old ethos of the Internet has given way to the new ethos of social media; while Anderson predicted the end of the “watercooler era,” Elberse sees the water cooler reborn, as fans track the progress of the latest cultural juggernaut across their Twitter timelines. “Because people are inherently social, they generally find value in reading the same books and watching the same television shows and movies that others do,” she writes, recasting our taste for hits as proof of our common humanity. Lurking behind her blockbuster thesis is the suggestion that being sociable matters more than being hip.
Because Anderson and Elberse both focus on consumer choice, they make it easy to forget that the entertainment industry is partly a reflection of the political processes that created it. For instance, movie franchises might be much less valuable if copyright protections didn’t last so long. In 1790, Congress enacted a law granting copyright protection for fourteen years, with an option for a fourteen-year extension; in the most recent revision, in 1998, Congress extended copyright protection to last a lifetime plus seventy years. (Works created by a corporation, instead of a person, may be protected for as long as a hundred and twenty years.) Similarly, the shape and the size of various online music-streaming services will be largely determined by the compulsory royalty rates set by the government, and by legal decisions about the relative value of different forms of digital musical consumption.
Although neither “Blockbusters” nor “The Long Tail” spends much time considering the power of legislation, that power is one of the main themes of “Hit Men.” The book’s true protagonist is a federal regulation, a 1960 amendment to the Communications Act, which banned secret payments to radio disk jockeys. In response, the big record companies began hiring middlemen known as independent radio promoters, who had a mysterious ability to transmit their musical passions to the program directors running radio. By the nineteen-eighties, during Yetnikoff’s heyday at CBS Records, big labels were spending millions on independent promotion, a practice their smaller competitors couldn’t copy. “The large record companies understood on some level that if radio airplay were not free, it would mean a major competitive edge,” Dannen writes. This is not so different from the logic that drives big film studios to spend increasing amounts of money on special effects and elaborate marketing campaigns, at a time when it’s easier than ever to shoot and distribute a movie. Horn, the Disney chairman, told Elberse that blockbusters were important precisely because they cost so much money. And Disney would have much less money to spend if Congress hadn’t extended its copyright protections. “Very few entities in this world can afford to spend $200 million on a movie,” he said. “That is our competitive advantage.” The long tail is real—and executives like Horn will pay whatever they must to stay out of it.
For a book about the future of the entertainment industry, “Blockbusters” can seem strikingly old-fashioned. Elberse quotes an executive talking about the importance of securing a screen at a big Los Angeles movie theatre; she explains the continuing influence of radio airplay; she analyzes the art and science of getting a book onto a bookstore’s most coveted shelves. Part of this is a necessary corrective to the idea that everything is digital: even in the atomized and de-atomized entertainment industry, an awful lot of business still gets done offline. Elberse sees the unreconstructed nature of the entertainment industry as proof that the blockbuster is here to stay. But it’s also possible that the stubborn endurance of cardboard-and-paper books, eighties-era multiplexes, and laughably primitive compact disks is proof of how much electronic transformation still lies ahead. In the seventies and eighties, the hit men worried mainly about each other, but the rise of digital delivery means that their modern-day successors must also contend with a more existential threat. After all, the endurance of blockbusters wasn’t enough to save Blockbuster video, which announced the closure of its last remaining stores earlier this month. Horn’s decision to focus on expensive movies might be shrewd, but it is not likely to reverse a decades-long decline in moviegoing. Betting on blockbusters might be a defensive strategy: a way for established entertainment companies to stall the larger forces eroding their “channel power,” at least for a while. Unlike the old hit men, Elberse’s executives can’t assume that their industries will be around forever.
You needn’t be a mogul to share some version of this anxiety: it is common among cultural producers of all sorts and sizes. Where fans see a glorious profusion of options, some performers see a potentially dangerous imbalance: an ever greater supply, balanced by the kind of soft, digital-era demand that can more easily be measured in eyeballs than in dollars. In “How Music Works” (McSweeney’s), a wide-ranging book of essays, David Byrne expresses a dismay shared by many of his peers. Byrne released his first album, with Talking Heads, in 1977, and he can’t help but be nostalgic for the old industry. Like Elberse, though less happily, he sees labels chasing after “blockbuster hits,” and he broods over the plight of musicians, especially the kind who, like him, once made a pretty good living in the margins of the major-label profit machine. Byrne’s 2004 album, “Grown Backwards,” was a modest success, selling nearly a hundred and fifty thousand copies, and he estimates that, after recording costs and other expenses, his net profit was about fifty-eight thousand dollars, not including royalties. Spread over a few years, that doesn’t seem like much, especially since Byrne can’t expect every album he makes to sell that well. He wonders, “How is a mid-level artist—someone who sells more than five thousand copies of a record but less than a million—supposed to live, given this scenario?”
The disappearance of the middle is the possibility that unites Anderson and Elberse, suggesting that the blockbuster era and the long-tail era are perfectly compatible. In financial terms, “mid-level” acts are by definition mediocre, and mediocrity is what a dynamic, low-friction marketplace is supposed to drive out. In “Average Is Over” (Dutton), the inventive economist Tyler Cowen sketches a vision of the future based on precisely this logic. He, like Anderson, is impressed by Netflix’s ability to guide its subscribers toward films they might like. But he sees the exchange as an example of an increasingly common labor arrangement: a consumer with money to spend relies on a computer algorithm for advice on how to spend it, making everyone better off except, perhaps, the movie buff from Blockbuster or the local video store, who no longer has a job. Anderson, more interested in culture than in economics, spent lots of time considering the independent films that Netflix might help, and not much time considering the merchants that it might hurt. From this angle, his egalitarian pronouncements can seem darkly ironic. “By putting our commercial weight behind the big winners, we actually amplify the gap between them and everything else,” Anderson wrote. “Economically, this is the same as saying, ‘If there can only be a few rich, let them at least be super-rich.’ ”
Cowen is less troubled by the further enrichment of the already rich. He takes it for granted that America will be increasingly influenced by “labor-market polarization”: productivity will continue to increase, but an ever larger proportion of the gains will go to “a relatively small cognitive elite”—human blockbusters, economically speaking. Meanwhile, more and more workers will find themselves in various service industries, assuming they can find full-time work at all. According to Cowen, future citizens will agree that “America is one of the nicest places in the world.” He predicts that even those with stagnant or falling wages will have “a lot more opportunities for cheap fun and also cheap education.” The formulation “cheap fun” explains much of what makes people so excited, and so anxious, about the future of popular culture.
In an earlier generation, anxiety about popular culture usually referred to something different: a fear that our entertainment industry was somehow corrupt, and corrupting us. We were being manipulated, it seemed, by nefarious executives like Dannen’s hit men, who conspired with shady men in shiny cars to manipulate radio playlists. But popular culture isn’t scary anymore. When ABC, NBC, and Fox created a streaming video site called Hulu, to compete with YouTube, they announced it with a 2009 Super Bowl commercial starring Alec Baldwin as a friendly but evil alien, intent on turning viewers’ brains to “mushy mush” by beaming television shows to their computers and phones. (The tagline was “Hulu: An evil plot to destroy the world. Enjoy.”) Beneath the joke was a sly acknowledgment that now network television, not the human brain, looks to be in danger of maceration.
Cultural consumption has grown more self-conscious: after years of stories about entertainment-industry upheaval, consumers have grown intensely aware of what Anderson called the “commercial weight” of our purchases. Despite all the lumping and splitting, popular culture remains roughly democratic: every consumer has a vote, and the price of voting is low enough to allow just about everyone to participate. And the availability of free pirated content online has endowed other, legal, forms of cultural consumption with a faint aura of righteousness. Many connoisseurs have come to think of themselves as patrons, eager not just to consume culture but to support it—or, occasionally, to boycott it. Each paid-for download, each Kickstarter donation, each movie ticket, each HBO subscription is an affirmative act, and a social one: a contribution to the cause, a vote in favor of Katniss Everdeen or some rookies on Bandcamp, a strike against the demise of whatever part of the entertainment industry still entertains us. Even Elberse’s blockbusting executives look vulnerable: they are producers in a consumers’ paradise, forever scrambling to adjust to the public’s changing whims. And so Elberse must reassure them, and reassure us, that big hits and big business aren’t going away. Once upon a time, we worried about what popular culture was doing to us. Now, more and more, we worry about what we’re doing to it.
Original Article
Source: newyorker.com
Author: Kelefa Sanneh
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