Escaping the Flat Circle of Time: Hollywood and the Art of Future Insights

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Information about Escaping the Flat Circle of Time: Hollywood and the Art of Future Insights
Business & Mgmt

Published on March 7, 2014

Author: brianchristian


                        Escaping the Flat Circle of Time   By  Dustin  Smith     W   ith   the   soaring   popularity   of   HBO’s   True   Detectives,   Nietzsche’s   doctrine   of   eternal   recurrence   has   once   again   gained   cultural   purchase.   In   Episode   Five,   Matthew   McConaughey’s   character   Rust  Cohle  muses:  "Someone  once  told  me  time  is  a  flat  circle.  Everything  we've  ever  done  or  will  do   we're  gonna  do  over  and  over  and  over  again."  Which,  to  the  clear-­‐eyed,  sounds  like  the  86  iterations   of   The   Oscars1   ceremony:   the   same   story   arc,   starting   with   a   benign   comedic   monologue   and   minor   awards,   and   then   crescendoing   to   the   “In   Memoriam”   montage   and   Best   Picture   revelation.   But   the   formula  works.  It  “gets  the  ratings.”2  It  is  commercially  successful.3   Hollywood4   has   faltered,   however,   when   applying   that   same   logic   to   feature   films.   Chasing   blockbuster  hits,  the  studios  have  made  fewer,5  bigger6  films,  leaning  on  pulp  lit  (Twilight,  The  Hunger   Games),   fantasy   (The   Avengers,   Star   Trek),   and   action   (Gravity,   World   War   Z)   genres,   with   a   heavy   reliance   on   sequels   and   reboots.7   These   movies   are   easier   to   model   financially,   and   the   pressure   to   demonstrate   expected   returns   prior   to   “securing   financing”   for   films   is   enormous,   thus   the   appeal.   They  also  play  better  globally.     But  Hollywood  is  no  longer  a  monopolist  serving  a  disconnected,  culturally  starved  public.  We  swim   in   cheap,   abundant,   excellent,   on-­‐demand   content,   with   ferocious   competition   for   our   attention.   We   are   part   of   a   vast,   complex,   globally   intertwined   culture   admixing   at   an   ever-­‐increasing   clip.   The   model   of   blockbuster   mediocrities   shown   in   a   soda-­‐glazed   multiplex   is   withering,   with   declining   profits8   as   testimony.   Cost-­‐cutting9  will  allow  studios  to  stabilize  financially  and  placate  investors  in  the  short-­‐term.  In  the   mid-­‐term,   corporate   strategy   integrating   megatrends   such   as   Ubiquitous   Computing,   3D   Integration   and  User-­‐Generated  Content  will  help  them  play  catch  up  (see  Comcast’s  move  to  release  films  on  the   The Innovation Quarterly (Winter 2014) | 1  

same  day  as  theaters,10  for  example).  But  to  progress  beyond  incremental  improvements  and  toward   transformative   and   defensible   strategic   innovation   in   the   long-­‐term,   studios   need   to   take   account   of   relevant  weak  signals,   the   emergent,   non-­‐obvious   micro-­‐trends   that   reveal   a   proprietary   view   of   the   future.     Weak Signals Megatrends  have  been  validated  by  industry  experts  and  by  clear  supporting  data;  they  are  well-­‐ known  and  defensible.    But  weak  signals  take  a  concerted  effort  to  gather,  to  ascertain  their  relative   plausibility,  to  synthesize.  Often  they’re  hidden  deep  in  extra-­‐industry  trade  publications,  academic   journals,  and  the  technical  press,  as  well  as  social  media  conversations,  vlogs/blogs/Tumblr  posts,  the   comments  section  of  Amazon,  and  cultural  criticism.   By  way  of  example  (relevant  to  the  film  industry),  take  Netflix.  Initially  it  offered  no  innovation  in   content,   simply   better   distribution   than   Blockbuster.   But   now   Netflix   produces   original   series   such   as   House  of  Cards,  explicitly  taking  advantage  of  streaming  (and  human  weakness).  Described  by  The  New   Yorker   culture   critic   Emily   Nussbaum   as   “hypnotic,   highbrow,   empty   calories,”   Netflix   made   all   12   Season  Two  episodes  available  on  the  premiere  date:   “House  of  Cards  really  is  designed  to  be  binge-­‐watched,  by  which  I  mean  consumed  so  quickly  there   is   no   time   to   taste   all   the   garbage   we   are   guzzling   down   alongside   those   delicious   and   sneering   putdowns.”  Willa  Paskin,11  Slate       Other  examples  include  Kickstarter  and  YouTube:   • After  the  Veronica  Mars  TV  show  was  cancelled  in  2003,  creator  Rob  Thomas  shopped   around   a   movie   but   couldn’t   get   funding.   In   2013   he   mounted   a   Kickstarter   campaign12   that  netted  over  $5.7M,  drawn  from  over  71,000  “backers.”     • PewDiePie13  (PEW-­‐dee-­‐py),  a  24-­‐year-­‐old  Swede,  has  more  than  24  million  subscribers   to   his   YouTube   channel   (about   one   percent   of   all   Internet   users)   and   is   projected   to   make   $2.8   million   over   the   next   four   months   from   related   ad   revenue.   His   main   attraction:  watching  him  play  video  games.   With   hundreds   more   of   these   weak   signals,   clusters   emerge,   indicating   hotter,   more   promising   areas   of   inquiry.   The   three   examples   above   may   well   presage   a   more   personal,   more   participatory   entertainment   experience.   Then   again,   perhaps   not;   upon   a   more   intense   search,   one   could   find   The Innovation Quarterly (Winter 2014) | 2  

stronger   evidence   to   the   contrary   and   abandon   that   hypothesis.   But   the   overall   intention   is   to   weave   a   tapestry   of   the   megatrends   and   the   weak   signals   into   a   coherent   depiction   of   a   plausible   future,   which   we  call  future  insights.   Future Insights   Swiftly   evolving   technologies,   global   connectivity,   and   increasing   complexity   all   contribute   to   uncertainty   and   risk   for   decision-­‐makers.   To   thrive   in   this   environment,   evidence-­‐supported   future   insights   can   help   articulate   a   future   against   which   one   can   weigh   decisions,   to   inform   anticipatory   actions.       A  few  key  tenets  of  a  good  future  insights  process:     1. Cultivate   and   curate   knowledge.   Read   and   watch   everything   of   interest   to   your   domain:   blogs,   Amazon   comments,   interviews,   screenshots,   articles,   books,   Tweets,   academic   papers.  Pull  in  data  feeds.  Snip  whatever  you  find  interesting  (we  use  Diigo  and  other  tools).     2. Build  a  “community  of  interest.”  Engage  with  individuals  and  organizations  with  intelligent   things   to   say   about   your   domain.   This   may   well   include   non-­‐traditional   “intentional   communities”  with  customers  and  other  stakeholders.   3. Create  future  scenarios  and  stories.  A  combination  of  plausible  future  states  (drawn  from   megatrends   and   weak   signals)   and   likely   implications   supports   an   easily   communicated   narrative.     4. Establish   your   “beacons   out   in   time.”   Given   the   stories,   what   are   signals   or   indicators   of   change?   Ideally   you   have   “trip   points”   that   spur   action:   investment,   further   study,   project   greenlighting,  etc.     5. Review,  debate,  and  revise.  Put  time  on  the  calendar  to  review  assumptions,  key  questions,   stories,  and  beacons.     Developing    future  scenario  models  extends  a  firm’s  purview  beyond  its  industry  as  it  exists  today,   articulating   a   plausible   world   in   which   envisioned   innovations   can   be   tried   and   tested.   It   spurs   opportunity   discovery   and   enhances   opportunity   development.   It   affords   decision-­‐makers   better   communication  tools  and  clearer  insights  into  where  to  allocate  time  and  resources,  with  a  higher  level   of  confidence.  It  is  an  essential  component  of  strategic  innovation.     Large  organizations  such  as  the  “Big  Six”  film  studios  boast  inherent  advantages  of  scale,  access  to   capital,  brand  equity,  and  a  cultivated  talent  base.  But  in  the  face  of  rapid  change,  they  risk  ossification   and  irrelevance.  As  a  corrective,  future  insights-­‐supported  strategic  innovation  allows  firms  to  remain   plastic  and  nimble  enough  to  take  advantage  of  the  next  big  opportunity.   The Innovation Quarterly (Winter 2014) | 3  

  At  its  best,  Hollywood  has  told  us  beautiful  and  terrible  truths,  beautiful  and  terrible  lies.  This  only   makes  the  prospect14  of  Fast  and  Furious  8  more  crushing.  We  hope  Hollywood  takes  heed  and  soon   escapes  the  flat  circle  of  time.             NOTES:                                                                                                                         1  Incidentally,  McConaughey  received  the  2014  Best  Actor  award  for  his  role  in  Dallas  Buyers  Club.   th  The  86  Academy  Awards  drew  43M  views,  the  highest  total  viewership  in  14  years,  up  from  40.4M  in  2013.     3  Ostensibly  The  Oscars  ought  to  recognize  artistic  merit,  absent  commercial  appeal.  But  Raymond  Chandler’s  1948  critique   sounds  as  fresh  as  ever:  “It  doesn’t  really  seem  to  make  much  difference  how  the  voting  is  done.  The  quality  of  the  work  is  still   only  recognized  in  the  context  of  success.  A  superb  job  in  a  flop  picture  would  get  you  nothing,  a  routine  job  in  a  winner  will   be  voted  in.  It  is  against  this  background  of  success-­‐worship  that  the  voting  is  done.”       4  When  referring  to  “the  studios,”  or  “Hollywood,”  we  mean  the  six  “MPAA  member  studios”:  Disney,  Paramount,  Sony,  Fox,   Universal,  and  Warner  Bros.  They  boast  over  80%  market  share  and  are  still  gaining.     5  MPAA  studio  releases  are  down  29%,  comparing  2012  to  2003,  and  down  9%  from  2012  to  2011.  The  Writers  Guild  of   America,  a  key  supplier  to  the  studios,  on  the  effects  of  fewer  films:  “This  means  more  competition  between  writers  and  the   pressures  become  enormous.  In  this  type  of  environment  screenwriters  rightly  feel  like  they  are  being  exploited.  I’ve  had  to  do   free  rewrites,  often  been  expected  to  start  work  before  any  type  of  payment  is  made,  and  I’ve  frequently  been  paid  late  by   major  studios.  I  think  those  qualify  as  symptoms  of  business  conditions  in  decline.”     6  “Hollywood  economics  have  been  strained  by  movie  budgets  that  have  been  rising  steadily  over  the  past  couple  of  decades.   To  cut  costs,  some  studios  have  dropped  smaller  budget  movies  with  big-­‐name,  expensive  actors,  but  kept  making  summer   blockbusters  based  on  franchises  such  as  superheroes.”  Ryan  Nakashima,  Huffington  Post   7  Fourteen  out  of  the  top  20  films  were  sequels  or  reboots.   8  Five  out  of  the  six  majors  posted  profit  declines  in  2012,  with  Disney  down  17.2%  and  Sony  down  43.1%.     9  “Sony  Entertainment  Is  Said  to  Hire  Bain  &  Company  for  Cost-­‐Cutting.”   10  Comcast  began  this  battle  with  theater  operators  in  2007.   11  Full  article  here.   12  The  Veronica  Mars  Kickstarter  has  reached  its  goal,  but  scroll  down  to  find  project  updates  from  Rob  Thomas.   13  From  PewDiePie’s  YouTube  homepage,  a  video-­‐game  playthrough  and  “Pewds  Does  Everything”  would  be  most   representative.  And  here’s  a  piece  on  how  “Pewds”  is  dealing  with  the  runaway  subscriber  base.   14  “Kurt  Russell,  on  the  other  hand,  has  already  mentioned  that  he  would  like  to  sign  up  for  Fast  8,  after  they  finish  this  one.”   Shane  Jordan,  Classicalite   2 The Innovation Quarterly (Winter 2014) | 4  

              About  The  Inovo  Group   Founded   in   2001,   Inovo   is   an   innovation   consulting   firm   based   in   Ann   Arbor,   Michigan,   that   helps  the  world’s  leading  organizations  succeed  at  strategic  innovation.       About  the  Author   DUSTIN   SMITH   is   a   Senior   Innovation   Lead   at   The   Inovo   Group.   Since   joining   Inovo   in   2012,   he   has   developed   strategic   business   opportunities   for   Fortune   500   clients   in   the   energy,   health   care,   and   consumer   products   sectors.   With   his   passion   for   technology   and   innovation,  Dustin  brings  a  highly  dynamic  perspective  to  all  client  projects.     Earlier  in  his  career,  Dustin  spent  six  years  as  COO  of  The  Armadillo  Group  (now  part  of  SMS   Assist),  where  he  focused  on  R&D  with  a  heavy  emphasis  on  clean/green  tech  innovation   and   product   design   experimentation.    Prior   to   Armadillo,   Dustin   was   a   program   officer   at   Christo   Rey   Jesuit   High   School   in   Chicago,   where   also   he   founded   and   taught   high   tech   courses.     Dustin   completed   his   undergraduate   work   in   Philosophy   at   Villanova   University   in   Pennsylvania  and  holds  an  MBA  from  the  University  of  Michigan’s  Ross  School  of  Business.           Copyright  ©  2014  by  The  Inovo  Group,  LLC   All  rights  reserved.    

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