Diamond touch: Rihanna is in the tiny group of artists who sell tunes by the million. Photo: Patrick McMullan Co/Rex
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The long tail cut short: the economics of blockbuster capitalism

This story of economics is not completely convincing, but a credible and interesting one: that big companies have tamed the market anarchy of the internet.
Blockbusters: Why Big Hits – and Big Risks – Are the Future of the Entertainment Business 
Anita Elberse
Faber & Faber, 256pp, £14.99
 
In 2006, when global optimism about the new broadband-based, interactive Web 2.0 was at its height, Chris Anderson, then the editor-in-chief of Wired magazine, published The Long Tail. It was a lesson in the new world order for old companies. Eric Schmidt of Google announced that Anderson’s ideas had influenced his company’s strategic thinking “in a profound way”.

The argument was that the internet had made it easier for consumers to buy specialised products. As they pursued their niche interests, the market would fragment. Customers would turn away from the big hits favoured by conventional retailers and create a sales chart with a long, fat and potentially very profitable tail. The Long Tail offered today’s geeks their own version of that slogan of the 1960s, “Stick it to the man.” It was a new way of breaking the power of the big corporations.

And it failed. Anita Elberse’s Blockbusters is the formal announcement of the death of The Long Tail’s premise. In its place is the old chart showing a few big hits and a million misses, a world dominated by the might not of people, but of money. “All in all,” she writes, “although advances in digital technologies may at first blush seem to have a ‘democratising’ influence, in reality they tend to have the opposite effect: they foster concentration and a winner-takes-all dynamic.” So much for sticking it to the man. As Elberse is a professor at Harvard Business School, we can take it that this was never on her agenda. That does not, however, compromise the truth of what she argues and the research that has gone into making the case.

She starts in 1999, when Alan Horn, the then president of Warner Brothers, decided to aim for four or five “tent-pole” (mega-budget) movies a year. The remaining 20 or so films would have to sink or swim, with buoyancy provided by much smaller marketing and star budgets. It worked. Thanks to the Harry Potter films, The Hangover, The Dark Knight, Ocean’s Eleven and a few others, for over a decade Warner took $1bn at the US box office every year – a record. Meanwhile, over at NBC, Jeff Zucker pursued the reverse strategy with middle-cost, middle-risk television shows. He failed.

There are dozens of similar stories in this book, all from the entertainment industries (sport plays a big part). This leaves the question: why is “blockbusterism” true now and “longtailism” dead? (I stress “now” here because modern business books have a very narrow window in which their ideas appear to be true – probably only a few years – as capitalism is dynamic and it is in the nature of markets to seek profits by opposing the prevailing wisdom.)

Elberse has many answers to the question (too many, in fact) but the overriding point is that the rewards of successful high-investment products swamp anything that can be made out of the long tail or even the medium-long tail. Anderson was wrong because, it turns out, people do not seek out niche products on any significant scale.

Perhaps one of the most devastating instances of this is music downloads, once the great hope of stick-it-to-the-man idealists. In 2011, of the eight million tracks sold in North America, 95 per cent sold fewer than 100 copies and 32 per cent sold only one copy each. Lady Gaga, Maroon 5, Jay-Z, Rihanna and the other superstars wiped the floor with the wannabes. “The level of concentration in these markets,” Elberse writes with a statistician’s fervour, “is so astounding, in fact, that it is nearly impossible to depict the demand curve: it disappears entirely into the axes.”

That seems clear but many of the other examples in this book are less so. She contrasts the business models of the world’s leading football clubs. So Boca Juniors in Buenos Aires finance themselves by generating talent and trying to sell one player a year to the gold mines of the European leagues. Real Madrid pursue a ruthless policy of paying top dollar for the best players, Gareth Bale being the latest example. Barcelona devote resources to local player development. Elberse goes into immense detail about how these clubs can be seen to be pursuing blockbuster policies, but the thesis doesn’t quite work.

This is evidence of a degree of “Gladwelli­sation” – the telling of good stories that are then unconvincingly retrofitted into an overarching thesis. Nevertheless, the general point is credible: that big companies have tamed the market anarchy of the internet. When we think of the web now, we don’t think of a bustling marketplace of small traders; we think of Google, Amazon, Apple and Facebook. The gold rush has turned into the same old land-grab.

What is not Gladwellish about this book is that, in spite of Elberse’s breezy tone, there is no happy ending. The evisceration of the music industry that lies behind those download figures is a sad tale, told elsewhere by the great Silicon Valley apostate Jaron Lanier, and only a fool would regard the mindless pursuit of identikit blockbusters as anything other than a disaster for the film industry. Luckily, directors such as Wes Anderson and the Coen brothers have worked out a way to survive with medium-sized budgets that do not require them to be sucked into the philistine maw of the marketing department. Art happens with or without the backing of business books. But if, like Chris Anderson, you thought a better world was riding in on the back of broadband, you were, I am afraid, wrong.

Bryan Appleyard tweets as @bryanappleyard

 

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Jeremy Corbyn and the paranoid style

The Labour leader’s team has a bunker mentality, and their genius has been to extend that bunker to accommodate tens of thousands of their followers. Within that bubble, every failure becomes a victory.

 

There was an odd moment on the BBC last summer, during Jeremy Corbyn’s first leadership campaign. A reporter had asked him a simple question about nationalisation: “Where did you get these words from?” he snapped. “Has somebody been feeding you this stuff?” 

At the time I was taken aback, but before long the campaign would become defined by paranoia, manifested in its leader as an extreme suspicion of “mainstream media”, and in its supporters as a widespread belief that establishment forces were conspiring to “fix” the Labour leadership contest, the so-called #LabourPurge.

This summer, Corbyn is fighting another leadership election. The main focus of his campaign so far has been an attempt to paint his rival Owen Smith as a “Big Pharma shill”, while Corbyn’s most influential supporter, Unite’s Len McCluskey, has claimed that MI5 are waging a dirty tricks campaign against the Leader of the Opposition. On stage Corbyn has attacked national media for failing to cover a parish council by-election.  

Corbyn’s time as Labour leader has been marked by an extraordinary surge of paranoia and conspiracy theory on the left. The sheer intensity of it, combined with some of his supporters’ glassy-eyed denial of reality and desire to “purge” the party unfaithful, has led some to compare Corbynism to a cult or a religious movement. Unfortunately, the problem goes much deeper. Corbyn didn’t create or lead a movement; he followed one.

In the last few years, a new breed of hyperbolic pundits has emerged on left-wing social media who embody what Richard Hofstadter called “The Paranoid Style” in politics, “a sense of heated exaggeration, suspiciousness, and conspiratorial fantasy”.

Hofstadter’s 1964 essay was inspired by McCarthyism, but the Paranoid Style as a political and psychological phenomena has been with us for as long as modern politics. Of course conspiracies and misdeeds can happen, but the Paranoid Style builds up an apocalyptic vision of a future driven entirely by dark conspiracies. The NHS won’t just be a bit worse; it will be destroyed in 24 hours. Opponents aren’t simply wrong, but evil incarnate; near-omnipotent super-villains control the media, the banks, even history itself. Through most of history, movements like this have remained at the fringes of politics; and when they move into the mainstream bad things tend to happen.

To pick one example among many, science broadcaster Marcus Chown’s Twitter feed is full of statements that fall apart at the slightest touch. We learn that billionaires control 80 per cent of the media – they don’t. We learn that the BBC were “playing down” the Panama Papers story, tweeted on a day when it led the TV news bulletins and was the number one story on their news site.  We learn that the Tories are lying when they say they’ve increased spending on the NHS. As FullFact report, the Tories have increased NHS spending in both absolute and real terms. We learn via a retweet that Labour were ahead of the Conservatives in polling before a leadership challengethey weren’t.

The surprise Conservative majority in last year’s election shocked the left to the core, and seemed to push this trend into overdrive. Unable to accept that Labour had simply lost arguments over austerity, immigration and the economy, people began constructing their own reality, pasting out of context quotes and dubious statistics over misleading charts and images. Falsehoods became so endemic in left-wing social media that it’s now almost impossible to find a political meme that doesn’t contain at least one serious mistruth. Popular social media figures like Dr Eoin Clarke have even built up the idea that the election result itself was a gigantic fraud.

The problem with creating your own truth is that you have to explain why others can’t – or won’t – see it. One answer is that they’re the unwitting stooges of an establishment conspiracy that must involve the “mainstream media”, a belief that seems more plausible in the wake of scandals over expense claims and phone-hacking. Voters can’t be expressing genuine concerns, so they must have been brainwashed by the media.  

The left have long complained about the right-wing bias of the tabloid press with some justification, but in recent years the rage of a hardcore minority has become increasingly focused on the BBC. “Why aren’t the BBC covering X” is a complaint heard daily, with X nearly always being some obscure or unimportant protest or something that in fact the BBC did cover.  

Bewildered and infuriated by the BBC’s refusal to run hard-left soundbites as headlines, the paranoid left assume Auntie is involved in some sort of right-wing establishment plot. Public figures such as Laura Kuenssberg, the Corporation’s political editor, have been subjected to a campaign of near-permanent abuse from the left, much of it reeking of misogyny. By asking Labour figures questions as tough as those she routinely puts to Conservative politicians, she has exposed her true role as a “Tory propagandist whore”, a “fucking cunt bag”, or a “Murdoch puppet”.

This was the context in which Corbyn’s leadership campaign was fought, and with his own dislike of the media and love of a good conspiracy theorist, he swiftly became a figurehead for the paranoid left. Suddenly, the cranks and conspiracy theorists had a home in his Labour party; and they flocked to it in their tens of thousands. Of course most Corbynistas aren’t cranks, but an intense and vocal minority are, and they have formed a poisonous core at the heart of the cause.

The result is a Truther-style movement that exists in almost complete denial of reality. Polls showing double-digit leads for the Conservatives are routinely decried as the fabrications of sinister mainstream media figures. The local elections in May, which saw Corbyn’s Labour perform worse than most opposition leaders in recent history, triggered a series of memes insisting that results were just fine. Most bewildering of all is a conspiracy theory which insists that Labour MPs who quit the shadow cabinet and declared ‘no confidence’ in Corbyn were somehow orchestrated by the PR firm, Portland Communications.

The paranoid left even has its own news sources. The Canary manages, without irony, to take the worst traits of the tabloids, from gross bias to the misreporting of a suicide note, and magnify them to create pages of pro-Corbyn propaganda that are indistinguishable from parody. On Facebook, Corbyn has more followers than the Labour Party itself. Fan groups filter news of Corbyn and his enemies so effectively that in one Facebook group I polled, more than 80 per cent of respondents thought Corbyn would easily win a general election.

This kind of thinking tips people over a dangerous threshold. Once you believe the conspiracy theories, once you believe you’ve been denied democracy by media manipulation and sinister establishment forces mounting dirty tricks campaigns, it becomes all too easy to justify bad behaviour on your own side. It starts with booing, but as the “oppressed” gain their voices the rhetoric and the behaviour escalate until the abuse becomes physical.

I’m prepared to believe Jeremy Corbyn when he says that he doesn’t engage in personal abuse. The problem is, he doesn’t have to. His army of followers are quite happy to engage in abuse on his behalf, whether it’s the relentless abuse of journalists, or bricks tossed through windows, or creating what more than 40 women MPs have described as a hostile and unpleasant environment

Supporters will point out that Jeremy Corbyn hasn’t asked for this to happen, and that in fact he’s made various statements condemning abuse. They’re not wrong, but they fail to grasp the point; that the irresponsible behaviour of Corbyn and his allies feeds into the atmosphere that leads inexorably to these kinds of abuses happening.

We see this in Corbyn’s unfounded attacks on media conspiracies, such as his absurd complaints about the lack of coverage of council elections. We see it in the shadow chancellor John McDonnell’s angry public jibes at Labour MPs. Surly aggression oozes out of the screen whenever a TV reporter asks Corbyn a difficult question. Then there’s the long history of revolutionary rhetoric – the praise for bombs and bullets, the happy engagement with the homophobic, the misogynistic, the anti-Semitic, the terrorist, in the name of nobler aims. 

Even the few statements Corbyn makes about abuse and bigotry are ambiguous and weak. Called upon to address anti-Semitism in the Labour party, he repeatedly abstracts to generic racism – in his select committee evidence on the topic, he mentioned racism 28 times, and anti-Semitism 25 times, while for his interviewers the ratio was 19 to 45. Called on to address the abuse of women MPs in the Labour Party, he broadened the topic to focus on abuse directed at himself, while his shadow justice secretary demanded the women show “respect” to party members. Corbyn’s speech is woolly at the best of times, but he and his allies seem determined to water down any call for their supporters to reform.   

Still, why reform when things are going so well? Taken at face value, Corbyn’s summer has been appalling. It began with the poor local election results, continued with Labour’s official position being defeated in the EU Referendum, and then saw the party’s leader lose a vote of no confidence, after which he was forced to watch the resignation of most of his shadow cabinet and then face a leadership challenge. Labour are polling terribly against Theresa May (who, admittedly, is in her honeymoon period), and the press are either hostile or find Corbyn impossible to work with.

If Corbyn were a conventional Leader of the Opposition these facts would be catastrophic, but he’s not and they’re not. To understand why, let’s look at some head-scratching quotes from leading Corbynistas. Jon Lansman, Chair of Momentum, was heavily mocked on Twitter recently for saying, “Democracy gives power to people, ‘Winning’ is the small bit that matters to political elites who want to keep power themselves.” The former BBC and Channel 4 journalist Paul Mason released a video clip suggesting Labour should be transformed into a “social movement”, along the lines of Occupy.  

These sentiments are echoed at the heart of Team Corbyn. Owen Smith claimed to have asked Corbyn and his Shadow Chancellor, John McDonnell, whether they were prepared to let the Labour party split. According to Smith, whose version of events was denied by John McDonnell but backed up by two other MPs, Corbyn refused to answer while McDonnell said “if that’s what it takes”. Many activists seem to hold the same view – Twitter is full of Momentum warriors quite happy to see the bulk of the PLP walk away, and unconcerned about their diminishing prospects of winning any election.

Which on the face of it makes no sense. Labour has 232 seats, considerably more than David Cameron inherited in 2005. Their opponent is an “unelected” Prime Minister commanding a majority of just twelve, who was a senior figure in the government that just caused Britain’s biggest crisis since the war, and is now forced to negotiate a deal that either cripples the economy or enrages millions of voters who were conned by her colleagues into believing they had won a referendum on immigration. Just before leaving office, George Osborne abandoned his budget surplus target – effectively conceding it was a political gambit all along.

A competent Labour leader, working with other parties and disaffected Remainian Tories, could be – should be - tearing lumps out of the government on a weekly basis. Majority government may be a distant prospect, but forcing the Tories into a coalition or removing them from government altogether by the next election is entirely achievable.  Yet it’s fair to say that many Corbynistas have little interest in seeing this scenario play out.

Which makes sense, because to these people Labour – real Labour – doesn’t have 232 seats, it has about 40. The others seats are occupied by “Red Tories” or, worse, “Blairites”. Since these groups are as much the enemy as the Tories are, exchanging one for the other is meaningless. The Corbynites could start their own party of course, but why do that when they can seize control of Labour’s infrastructure, short money and institutional donors. The only long-term strategy that makes sense is to “purify” Labour, and rebuild from the foundations up. That may mean another 10 or 20 years of Tory rule, but the achingly middle-class Corbynistas won’t be the ones to suffer from that.

Seen through that prism, Corbynism makes sense. A common theme among the dozens of resignation letters from former shadow ministers has been his apparent disinterest in opposition policy work. A recent Vice documentary showed his refusal to attack the Tories over the resignation of Iain Duncan Smith. Even Richard Murphy, a supportive economist who set out many of the basic principles of ‘Corbynomics’, lost patience in a recent blog post

“I had the opportunity to see what was happening inside the PLP. The leadership wasn’t confusing as much as just silent. There was no policy direction, no messaging, no direction, no co-ordination, no nothing. Shadow ministers appeared to have been left with no direction as to what to do. It was shambolic.”

So where are his attentions focused? Unnamed “insiders” quoted in the Mirror paint an all too feasible picture of a team that, “spent hours in ‘rambling’ meetings discussing possible plots against him and considered sending ‘moles’ to spy on his Shadow Cabinet.” That claim was given more weight by the recent controversy over Karie Murphy, Corbyn’s office manager, who allegedly entered the office of shadow minister Seema Malhotra without permission. Vice’s documentary, ‘The Outsider‘, showed Corbyn railing against the BBC, who he believed were ‘obsessed’ with undermining his leadership, and other journalists.

By all accounts, Corbyn’s team inhabit a bunker mentality, and their genius – intentional or otherwise – has been to use the ‘paranoid style’ to extend that bunker to accommodate tens of thousands of their followers. Within that bubble, every failure becomes a victory. Negative media coverage simply reinforces their sense of being under attack, and every bad poll or election disappointment becomes an opportunity to demonstrate the strength of their faith. Shadow cabinet resignations and condemnations reveal new ‘traitors’, justifying further paranoia and increasing the feeling of being under siege.

It’s terrible for a functioning opposition, but brilliant for forming a loyal hard-left movement, driving screaming protestors into CLP meetings, keeping uppity MPs in line with the prospect of more abuse or deselection, and ensuring that Corbyn will sign up enough supporters to win the leadership election by a landslide.  

Hofstadter wrote that ”the paranoid is a militant leader. He does not see social conflict as something to be mediated and compromised, in the manner of the working politician.” In the United States, Bernie Sanders was ultimately forced to compromise when Hillary Clinton won the Democrat nomination. The Bernie Corbyn & Jeremy Sanders Facebook group, hardcore loyalists to the end, immediately disowned him, and suggested the group change its name.

Corbyn need make no such compromise, which is his whole appeal. Those who expect him to step down after a general election defeat, or to compromise with the rest of the party to achieve greater success, have completely failed to understand what they’re dealing with. For Corbyn and is followers there is no compromise, only purity, and a Red Labour party with 50 MPs is better than a centrist party with 400. That is the reality of the movement that Labour and the left are facing, and it is catastrophic. 

 

Martin Robbins is a Berkshire-based researcher and science writer. He writes about science, pseudoscience and evidence-based politics. Follow him on Twitter as @mjrobbins.