The world seems more dangerous today than it ever has before, but study after study shows that we’re safer now. Hans Rosling’s Factfulness, Matt Ridley’s Rational Optimist, and Steven Pinker’s The Better Angels of Our Nature are three books that dig into this.
In part, life feels more dangerous today because we have so much information about bad things that happen via the news and social media, both of which are incentivized to lead with what agitates us. Don’t get me wrong: horrible things happen to people all over the world all the time, like Russian atrocities in Ukraine. For most people reading this piece, though, things outside your front door aren’t deadly.
Life also feels more dangerous because as individuals we have less practice taking everyday risks today than we did a few years ago.
Tinder is a perfect example. The dating platform de-risks approaching somebody desirable to see if that person might also find you desirable. Before you even start talking, you’ve both already swiped right to indicate, “sure, yeah, I’ll talk with this person.” This is cheating! Back in the day, if I wanted to ask a girl to dance (or on a date, or whatever), I had to use my mouth to form words in her presence and maybe even make eye contact, heart racing, palms a little sweaty (and that last bit made dancing a joy to the lady in question, I’m sure), not really sure if I wanted a yes or a no. With Tinder, you already have data that you’re not going to get shot down. It’s so much easier.
But I suspect (and this is speculation because I’ve been married since before there was online dating, so a lot of this is science fiction for me) that after using Tinder it’s harder to approach somebody in real life without that boost from data.
On the human development side, taking little risks gets you ready for bigger ones later. The rise of helicopter parenting, where people don’t let their kids play without adult supervision, swaps a tiny risk for a bigger one. The tiny risk is that a stranger will do something bad to your child, which statistically speaking is unlikely. The bigger risk is that your kids won’t be able to make decisions on their own, might be risk averse in general (this is what the Free-Range Kids movement is all about), or might have trouble accurately assessing risk later in life.
On the business side, when a platform makes it easier to do things on the platform than off it, then it’s tempting to go all in on the platform. However, you risk enslaving yourself to the platform with no leverage if the platform abruptly changes its rules… whether it’s dating, selling (like on Fulfilled by Amazon), advertising (on Facebook or Google), buying books (you know), getting around (Uber and Lyft), and the list goes on.
If you own the platform it’s different. I once heard a fascinating presentation from a Direct-to-Consumer, Fast Fashion executive who said, “we chase wins.” His company performed hundreds of experiments, making a limited number of pieces, and then watching the e-comm data obsessively. When sales on a certain item started to pop, the company would pour marketing gasoline on the item to make the win bigger. It’s a great strategy so long as you have a critical mass of customers visiting your platform regularly.
Chasing wins has come to the entertainment business. Writers build audiences and find publishers on Wattpad, and for traditional book publishers Wattpad de-risks manuscript acquisition because the new writer already has a fan base.
It’s also true of streaming video. Here’s a passage from fascinating article about CoComelon in the most recent Time Magazine:
CoComelon is not only a ratings juggernaut. It’s also a model for a new approach to children’s TV. The educators who developed hits like Sesame Street and SpongeBob SquarePants had to fight for years to get their shows on the air. A room of adults could toil on a concept that helped kids learn important ideas, only to find out viewers weren’t interested. CoComelon is part of a push to eliminate such guesswork. Its parent company, Moonbug Entertainment, scours digital platforms like YouTube for popular kids’ programming, buys them, and then tries to build them into even bigger phenomena, drawing on data from YouTube to figure out what resonates with audiences.
On the downside, if YouTube changes its terms of service, then Moonbug might be left in a lurch.
All of which brings us to movies, where the nature of a win is changing. I’m writing this on Sunday, March 27th. Tonight is the 94th Oscars ceremony, and in the lead up a lot of ink has been spilled (this cringe-inducing New York Times column is a good example) about how Apple TV+’s Coda and Netflix’s The Power of the Dog and Don’t Look Up from Netflix are all Best Picture contenders, which showcases how the cultural power of streaming video is on the rise.
What we’re really seeing is a battle between two different models of risk.
Films like Belfast and Licorice Pizza use the traditional movie model of risk: a theatrical window followed by a series of other windows, with streaming towards the end. (Duneand West Side Story were 2021 anomalies because of COVID, but without the pandemic they would have followed the traditional model.) In this model, the individual title carries all the risk. It’s a series of big bets, like playing roulette with tall stack of chips, but one bet has nothing to do with the next. A studio typically winds up regretting the vast majority of its content because it doesn’t make enough money, while hoping that the profitable content makes enough to keep the whole enterprise going for another year. It’s not quite the Pareto 80/20 rule, but close enough.
The streaming model de-risks individual titles for the studio. Sure, Apple TV+ and Netflix would love to win Academy Awards, but they reason they want Oscars is because it makes marketing their monthly services easier. A Best Picture Oscar will help a streaming service acquire a subscriber who wants to watch a nominated movie but doesn’t want to buy or rent the film. More importantly, a month later, when it’s time to think about cancelling, the presence of Oscar-winning movies will make the subscriber hesitate to lose access to the option of watching those movies.
The massive upside of de-risking content creation is the explosion of high quality content that we’ve been seeing over the last few years.
On the other hand, a downside is that if, like CoComelon, content platforms only chase what works in the short term, then that might result in less patient, pathbreaking, genre-twisting, surprising entertainment.
Steve Jobs famously said, “customers don’t know what they want until we’ve shown them.”
Thanks for reading.
Leave a Reply