A Labor Day blast from the past

Look for the Union Label

The ILGWU sponsored a contest among its members in the 1970s for an advertising jingle to advocate buying ILGWU-made garments. The winner was Look for the union label.[9][10] The Union's "Look for the Union Label" song went as follows:

    Look for the union label
    When you are buying a coat, dress, or blouse,
    Remember somewhere our union's sewing,
    Our wages going to feed the kids and run the house,
    We work hard, but who's complaining?
    Thanks to the ILG, we're paying our way,
    So always look for the union label,
    It says we're able to make it in the USA!

The commercial featuring the famous song was parodied on a late-1970s episode of Saturday Night Live in a fake commercial for The Dope Growers Union and on the March 19, 1977, episode (#10.22) of The Carol Burnett Show. It was also parodied in the South Park episode "Freak Strike" (2002).

Friday Pop Culture Corner

John P. Marquand, author of both respected literary novels and the popular Mr. Moto thrillers was said to use those lighter adventure stories as a way of, for lack of a better word, subsidizing the research for his more serious works. Blogs are great for that. Not only do they provide an outlet for all those interesting facts and stray observations that come from laying the groundwork for a longer piece or bigger project; they also are an excellent way of starting a conversation and generating interest for those bigger undertakings.

One of these days, I would like to do a serious deep dive into the current rather sad state of criticism and cultural commentary. I've got plenty of bad examples (I could probably do an entire thread of embarrassing examples from the otherwise essential Lawyers Guns and Money), but I also have at least one very good example, Bob Chipman.

Chipman, who also goes by MovieBob, seems at first glance to be almost a performance art parody of a Boston fan boy. I suspect there is at least a small element of affectation here (it's almost impossible to craft a public persona without it), but most of this is clearly sincere, and those pop culture obsessions are a fundamental part of what makes Chipman so valuable. He understands the fan boy dynamics that drive so much of the entertainment industry (and consequently major segments of our economy). At the same time he has the detachment, self-awareness, and broader literacy to see the big picture (perhaps not coincidentally, the name of his original series of video essays).

I know how improbable this sounds, but having slogged through a swamp of bad Pauline Kael impersonators, the critic I've come across who comes the closest to capturing what made her so important and readable is a minor YouTube celebrity in a donkey Kong T-shirt.

Hopefully, I'll be delving into this deeper at some later point, but for now here are some recent pieces that you might want to check out.

This piece on Disney addresses a couple of extraordinarily important topics, starting out with a discussion of fan conspiracy theories (often with an alt right agenda) about Disney's Star Wars and Marvel Cinematic Universe franchises, then segues into the far more important topic of media consolidation.



As a follow-up, these two videos examine Black Panther both as a film and as a cultural phenomenon.







This account of the firing of James Gunn addresses the increasingly dangerous alt right tactic of launching a social media attack on a progressive figure based on feigned offense over some old tweet or video clip.




I initially planned on doing a post comparing this video essay to the somewhat analogous arguments Andrew Gelman made not long ago about the influence of feminism on his work.



[For those of you who like to stick with text, check out Chipman's website.]

Back on the Musk beat -- actually, the Augean stables part is rather apt

One of the perks of following the recent news around Elon Musk and Tesla motors is the opportunity to observe in detail the performance of a narrative when stressed to the breaking point. We see the limits of its tensile strength, learn to spot the signs of strain.

Of particular interest is the way journalists react to those signs while trying to maintain the basic integrity of the narrative. This entails a strategic retreat on some points, sidestepping others, and holding firm, even doubling down, on the rest.

Take this Wired article by Alex Davies provocatively entitled "Elon Musk Is Broken, and We Have Broken Him." With the important caveat that some of this may be tongue-in-cheek (there are certainly touches of snark which suggests at least the possibility of more subtle sarcasm), here are some illustrative points.

Conceding the obvious first

On the surface, the implication—nobody else can do this—is nonsense. Lots of people could run Tesla. Starting with the hundreds of capable executives at the world’s automakers, most of which are larger, more efficient, and more profitable than Tesla.

Even here you have some hedging bordering on distortion. The phrase "more profitable"  in particular is pushing things quite a bit. This is true in the mathematical sense – – a positive number is always greater than a negative number – – but it arguably leaves the impression that Tesla is profitable rather than a money losing concern. The real pivot, though, follows in the second half of the paragraph where we it the inevitable mythic aspect of the story.

Go a bit deeper though, and you find the truth of the sentiment. Sure, someone might be a better CEO. But there’s no replacing Elon Musk. Because the man is not just a CEO. To many, the man is a legend.

As long time readers have already guessed, we are about to enter the realm of magical heuristics, sorcery and myth dressed up as business plans and technology. Before we get the good stuff, however, there are some important facts that have to be downplayed.

We get an account of the development of electric vehicles that dismisses everything that came before Tesla as "golf carts." No mention is made of the numerous predecessors or the other companies that were developing competing products in 2003 such as the Nissan Leaf and the Chevy Volt (and before any hands go up, a plug-in hybrid is an electric car with a backup power system). Likewise, TRW fails to make an appearance in the account of the birth of SpaceX. Perhaps my favorite part of the whole piece is this "he wished a hyperloop industry into creation" which manages to combine the heuristic of will (bringing things into existence through focus and faith) with the phrase in "hyperloop industry."

For those who haven't been following the story, there is no Hyperloop industry because there is no hyperloop, and with the possible exception of a glorified amusement park ride in some place like Dubai, there probably never will be. The near universal consensus among independent experts is that the plan is nowhere near viable. At best the companies pursuing this technology are tragically overoptimistic; at worst, it is an enormous scam that is fleecing hundreds of millions of dollars from gullible investors and quite possibly taxpayers in the near future.

Regular readers will also know that we have an ongoing thread at the blog collecting examples of business and technology writing that implicitly and sometimes explicitly owes more to folklore than to what we would normally consider journalism. This article presents a particularly rich vein in this area, having Musk play multiple mythic or archetypal roles ranging from Fisher King to Icarus to questing demigod (actually, I'm not too sure about the first one. It's been decades hence I read any Joseph Campbell and I have a feeling that I've conflated the Arthurian figure with someone else. There's no doubt about the demigod part, however).

Musk, then, is Hercules remixed. The greatest of Greek heroes performed his famed labors as penance for killing his children in a fit of insanity. Musk has completed his own labors, landing rockets on boats and delivering a wonderful, affordable, electric car. But the effort seems to have left him mad. And now he threatens to destroy what he has created.

Pre-existing conditions and medical care

This is Joseph.

We have talked a few times about the issues with medical insurance.  We live in a world where, unfortunately, we all age and decay.  Over time, we all acquire conditions.  It is also the case, in a world where insurance is linked to both employment and the ability to pay, gaps in insurance may occur and/or insurance providers may change.

This makes the question of pre-existing conditions a thorny one.  Since the rules against excluding care based on them are under legal assault, there is a new bill to protect them.  Unfortunately it doesn't do a great job.

From Michael Hiltzik

The measure says that no insurer may reject an insurance applicant based on his or her medical condition or history. But it’s got a loophole that even the dimmest insurance company could drive a hearse through: It doesn’t require that the insurer provide for treatment of the applicant’s preexisting condition.

That makes the bill’s guaranteed access to insurance “something of a mirage,” says Larry Levitt, senior vice president of the Kaiser Family Foundation. Levitt observed on Twitter that “So-called ‘pre-existing condition exclusions’ were common in individual market insurance policies before the ACA, and are also typical in current short-term policies.” At best, they can impose waiting periods for treatment of those conditions; at worst, they exclude coverage permanently.

As medical costs rise in the United States, it becomes impossible to self insure against a pre-existing condition at any likely level of total income.  So this matters a lot.

If we want to make private insurance work, there has to be a way for people to get coverage for these conditions, unless we want to completely rethink the cost and licensing structure of American medicine (can we outsource medical care to India using robots and teleconferences?).

It is a big deal not to make this mistake.

Neil Simon (July 4, 1927 – August 26, 2018) Updated

Some of Simon's funniest work came early in his career.











Posted this haste.

Left out some stuff.

Still in haste, but here are a few quickies.

1. Check out the reference to socialized medicine and more pointedly, the McClellan Committee in the casino episode.

2. Lots of Nat Hiken favorites like Al Lewis and Charlotte Rae pop up.

3. Hiken was way ahead of his time in casting black actors in diverse roles both here and in Car 54.

4. Car 54 had TV's first interracial kiss, despite what Star Trek fans would have you believe.

5. Car 54 was William Faulkner's favorite show.

Don't feel bad if you haven't heard of Ecclesia College (Pat Boone didn't remember it and he's on their board.) -- UPDATED

Ecclesia College appears to have been the Trump University of Bible colleges. The graduation rates and academic standards would have embarrassed a stripmall business school.

In the meantime, Oren Paris III, who had been installed as president of Ecclesia College in 1997, took the school from roughly 50 acres at the time of his installation to approximately 200 acres by mid-2005. From 2005 to 2013, Ecclesia did not buy any land. By 2013, according to the website, which has since been scrubbed to remove reference to Oren Paris III’s leadership, Ecclesia and Paris had come up with “extensive plans for future growth and development.” According to the federal indictment, however, it is more accurate to say that Ecclesia (through Paris) had come up with a plan to call Jon Woods to talk about increasing Ecclesia’s participation in the Arkansas General Improvement Fund, using the selling point that Ecclesia “produces graduates that are conservative voters.”

That is probably true; Ecclesia graduates likely do vote conservative for the most part. Thing is, there are barely any graduates. Look at 2016, which the most recent complete data available, for example:

That’s an 11.6% graduation rate, consisting of FIVE graduates in 2016. Five is 11.6% of a class of about 43 students. So, of the 43 students who enrolled at Ecclesia College in 2012, five graduated in 2016.

Not that 2016 was an aberration. Depending on where you look — and depending on whether you are calculating based on 4, 5, or 6 year graduation rates — Ecclesia College consistently has a graduation rate between 6 and 15%. Compare that to some of the schools consistently considered the most difficult for undergrads.

MIT has a graduation rate of 91.6%. Reed College has a graduation rate of 80.6%. Swarthmore? 85%.

So why is Ecclesia’s rate so low? It could have something do with the fact that the 25/75 percentile ACT scores for Ecclesia College are 6 and 9. (For comparison, MIT’s 25/75 are 31/35, and a perfect score is 36.)

11.6% graduation rate is, to put it bluntly, abysmal. That graduation rate, combined with those ACT scores, makes Ecclesia easily the worst college (2- or 4-year) in the entire state.

The school's board of advisors featured evangelical luminaries like Pat Boone and revisionist historian David Barton, but when the Arkansas Democrat-Gazette contacted the members, Boone's first reaction was that he had never heard of the school. It was only after checking his records that he issued a correction saying that he had agreed to serve though it appears he it never actually attended a meeting or went to the campus. (Barton did know about the school but that may have had something to do with its proposal to name the history building after him.) It would be tempting to put Boone's initial denial down to an octogenarian's lapses in memory if two of the other "members" contacted had not definitively stated that they were not on the board.

All of this would probably have gone unnoticed if not for this

On January 4, 2017, Arkansas legislator Micah Neal pleaded guilty to conspiring to direct $600,000 in state government funds to Ecclesia College and another non-profit in exchange for $38,000 in bribes.[1] The plea agreement also singles out the president of the college (Oren Paris III) as being directly involved with the conspiracy.[2]

On March 2, 2017, former State Senator, Jon Woods, was indicted on 13 charges by a grand jury in connection to the kickback and bribery scheme.

Woods is facing 11 counts of honest services wire fraud, one count of money laundering and one count of honest services mail fraud.

The indictment outlined the scheme to steer General Improvement Fund money from the state legislature to projects supported through funding distributed by the Northwest Arkansas Development District.

The indictment also named the president of Ecclesia College in Springdale, Oren Paris III, who is facing nine counts of honest services wire fraud and one count of honest services mail fraud after receiving funding from GIF monies. The college is not listed in the indictment.

An Alma man, Randell G. Shelton Jr., is also listed in the indictment as part of an unnamed consulting company that was used to pay and conceal the kickbacks that Woods and Neal were allegedly receiving.

Both Shelton and Paris initially pleaded not guilty during arraignment hearings.

Paris changed his plea to guilty on April 4, 2018 and resigned as president of Ecclesia College.

Ecclesia College is a perfect example of something I've been meaning to write about for a while, the potentially big role of small state scandals. As we've mentioned before in other contexts (notably over the air television and the rise of terrestrial superstations), a major source of press dysfunction is the disparity of attention paid to different parts of the country. On one end of the spectrum you have New York City (particularly upscale sections) and more recently San Francisco. Stories of even the most limited local interest in these cities will receive extensive national coverage. On the other end of the spectrum you have rural areas in places like Arkansas or Oklahoma. Stories that primarily affect these areas, even if they collectively affect tens of millions of people and have significant economic, political, or security implications, will go almost completely unnoticed by the national press or a shockingly long period of time.

I keep up with Arkansas because I was raised there, I know the state, and I've kept a number of friends in the area. Recently, when I ask them what's going on back home or when I check out some local media online, the news is of scandals, mostly low to mid level stuff but pervasive and disproportionately Republican. This is remarkably consistent with the picture I'm getting from places like Oklahoma Missouri, etc. It also sounds a lot like the corruption cases we've been hearing about from places like California and New York State.

Taken individually, none of these scandals mean much, but taken collectively they suggest a major underlying problem for the GOP. We could spend endless hours discussing the causes, but the short version is that decades of media manipulation, working the refs, putting party loyalty above all, and tolerating a culture of grift (prominently featuring Arkansas's own Mike Huckabee) has created, if you'll pardon a melodramatic phrase, a culture of corruption in the Republican Party.

When you combine a sense of persecution and entitlement with the knowledge that your party (currently the dominant political party) will watch your back and with the suspicion that the bar is about to close, people will start to bend rules and break laws at an ever accelerating pace. If you then combine that with what is likely to be an unprecedented collection of scandals in the White House, all of those little stories have the potential to add up to a very big one.

UPDATE -- A friend from Arkansas just sent me this link

Official: Governor went against advice, signed bill geared toward 1 Arkansas college

Gov. Asa Hutchinson went against the advice of his state budget director when he signed a 2015 bill that would benefit only Ecclesia College in Springdale, the former budget director says.

Daycares and zoning

This is Joseph

This article points out the problem with urban development and the pressures involved:

Neighborhood residents sparred with the Zoning Board of Adjustment and the project developer over the proposed conversion of a 12,800-square-foot building on 22nd and South Streets into a Goddard School franchise.

“One person complained and said, are we going to have to listen to the sounds of kids laughing and yelling?” developer Jason Nusbaum told Billy Penn. “We could have worse problems.”

While zoning board members ultimately voted to welcome the childcare facility into the tony neighborhood, their unanimous decision did not come without a massive argument about noise, traffic and, of course, parking.

 Look, one thing that is very clear is that new businesses always have impacts on existing residents and it is never going to be popular to make life a bit harder.  I know parking is loathed by a lot of urban development advocates, but it is the lifeblood of how we do efficient transit in the United States.  Fixing that is a much bigger issue and involves rethinking transit. 

[I think driverless cars are a distraction as we don't yet know their net effect on congestion and if we need to do new infrastructure to make them work then it's unclear that this is a different collective action problem then making transit work.]

But the truth is that it is indubitably true that a new daycare is going to make the neighborhood more congested.  It is also the case that failing to welcome it will be bad in the long run for everyone in the city.  What would be nice is if we could come up with an incentive system that did not reward maximum obstruction.  Because being nice about development means you get all of it, under the current system and that isn't great either.  

Hark the Herald Reporters Sing – – another magical heuristics post

I was reading yet another piece talking about how some Silicon Valley/Silicon Beach company was about to do some impossible thing. As I was mentally compiling a list of factual errors, fallacies, and improbabilities, it suddenly struck me that I was approaching the piece from a completely inappropriate framework. This wasn’t an analysis of a business model; it was the foretelling of the coming conquests of great men. The numbers and anecdotes given in the piece were not evidence and context; they were portents.

We’ve certainly discussed the idea that the discourse of the tech industry is rife with the language and imagery of myths and magic, and we haven’t been the only ones to notice (Paul Krugman recently described the rhetoric of crypto currency supporters as “messianic”), but reading that piece I was struck by an implication which I believe had evaded me up to this point. What are the psychological effects of these stories on the people who tell them?

If tech journalists are increasingly inclined to see figures like Elon Musk as messiahs (and if you think this is over the top, go back and read the Rolling Stone cover story), isn’t it inevitable that these journalists who are announcing the coming of these messiahs will start to think of themselves as heralds?

Up until now, we have tended to describe these reporters as conmen or suckers, but just as two categories are not mutually exclusive, neither is this one. If you dig into the history of charlatans, you’ll have no trouble finding promoters who were both willing accomplices and true believers.

I’ve been struggling to explain the seductiveness of the bullshit narratives which has come to dominate our discussion of science and technology. Part of this unquestionably comes down to the appeal of the pitch: the future is not only brighter than you could imagine, it’s also going to be cheap and easily attained and it’s right around the corner. It’s not difficult to imagine people wanting to believe this, but that still doesn’t fully explain how so many smart and skeptical people have fallen for the obvious flimflam and have rejected the rational for the magical heuristics.

I suspect the psychology of the herald plays a large role here. While it certainly doesn’t hurt that these stories are good copy or that these “messiahs” have appropriately majestic lifestyles (sometimes, the next best thing to being rich is hanging out with the rich), but the reporters covering the stories also have the sense of being part of something great even if their role is only to witness and record.

The complicated statistics and conflicting objectives of video recommendation algorithms

What is the objective of the algorithm and how do we know if it's achieving that goal? Well, that depends. The things we would really like to know like impact on long-term customer loyalty and retention, particularly in the event of price increases and/or loss of popular content. Unfortunately, getting an answer to this question that does not entail waiting five or 10 years is extremely difficult.

I suspect the most popular alternative would be simply measuring how often customers accept the recommendation, but that metric is deeply problematic even under the best of circumstances and is almost worthless if approached naïvely.

A big part of the problem is that customers almost always walk into the door with some kind of mental queue, albeit often a vague and incomplete one. A recommendation algorithm that does not change that queue in a nontrivial way is a failure, a complete waste of time and money.

[I almost veered off into a discussion of how models and algorithms interact in this situation, but I'm trying to stay on topic and that's a subject that really needs a serious post or perhaps even thread of its own.]

Now we get to the next level of complexity. If you fail to change the queue you accomplish nothing, but if you do change the queue you still don't necessarily accomplish anything of business value. This is where we need to start getting specific about our objectives because there are some perfectly reasonable but contradictory choices to consider

If the sole concern is serving the customer (and serving the customer is never the sole concern) then the goal might be to get the viewers to watch and give a high ratings to shows they were previously unaware of. Another interesting related metric might be to look at before and after ratings, comparing how much they expected to enjoy a program with how much they actually did.

While great for viewers, this can very easily turn around and bite the company in the ass. For example, if Netflix gets viewers interested in classic cinema, they are likely to start migrating to other services with far better cinephile collections. Filmstruck is probably the best-known of these, but here in LA and possibly in your town as well, the public library offers a free streaming service which includes the Criterion Collection, a catalog which Netflix can't possibly compete against.

So chances are the business not only needs to change the queue; it needs to direct the viewers toward certain programs.

Before we pursue this any further, we need to remember that convincing a person to watch a movie or a TV show that he or she is unfamiliar with has never been easy and has grown far more difficult in recent years. For the first three or so decades of television as a mass medium (let's call it 1950 to 1980 just to have some round numbers), you basically had three networks to choose from. Some minor players popped up – – PBS, independent stations, a few abortive attempts at a fourth network – – but most people spent most of their time watching CBS, NBC, or ABC (usually in that order). Simply getting a show on the air guaranteed enough of an audience for word to get around.

If you want to build the IP value of a television show in 2018, the best way to do it is probably still going the route of a prime time network run and a wide syndication release, but that paradigm is clearly fading. Despite what you may have heard, no one has come up with anything close to replacing it. As a result, companies are either relying on established properties that achieved high name recognition status under the old paradigm or are desperately trying to prop up new properties     with dump trucks full of marketing and PR money. Under these circumstances, the suggestion that the viewership for the programming being produced by the streaming services is driven by recommendation engines should be taken with extreme skepticism.

Furthermore, at the risk of being cynical, it would probably be a good idea to approach any story about the role of recommendation algorithms in the world of online video with the assumptions that the sources for the stories have a strong incentive spin them a certain way and that there is a very good chance that those sources don't know what they're doing.

Codetermination

This is Joseph

The new proposal by Elizabeth Warren to introduce codetermination to the United States has certainly engendered a lot of debate.  It led to attacks on the plan as a way to nationalize industries.  It also led to questions about whether the same goals could be achieved by empowering unions.  A lot of this seems to be an innate resistance to any form of wealth redistribution, which is a tough line to hold as wealth inequality increases and we slide into a crisis of affordable housing.

However, I suspect that there is an even bigger piece that is being overlooked.  Just consider these two provisions:

40 percent of the directors would be elected by the company’s workforce, with the other 60 percent elected by shareholders. 

Corporate political activity would require the specific authorization of both 75 percent of shareholders and 75 percent of board members.

This is a nice way to keep corporate free speech but to prevent a small class of managerial executives from controlling the political agenda of the companies.  A company is still free to be an advocate for political positions, but they need to build broad stakeholder consensus that this position is in the best interests of the business.  For obvious things that impact the business, like bankruptcy laws for banks, this is an easy sell.

Now other policy ideas could achieve the same goals.  But this is a rather clever assault on the principle agent problem as regards to corporate free speech.  

A few points to remember about the recent (ongoing?) Meltdown of Elon Musk.

[If you haven't been keeping up with the story, here's a good write-up from the superior Times.]



1. First off, we all know that this story about spending every waking hour focusing on Tesla production problems is bullshit on any number of levels but most obviously based on the fixed upper bound of hours in a day. Musk leads a very public life, and even limiting ourselves to that public record, we know that he finds lots of time to support a multi-hour-a-day social media habit, hang out with his popstar girlfriend, play around with miniature flamethrowers and other toys, confidently make dubious proposals involving Hyperloops and tunneling machines and squeeze in a profoundly embarrassing trip to Thailand.

1a. As always, it is important to remember that Elon Musk has a long history of making questionable claims of extraordinary personal accomplishment. From reading the entire encyclopedia as a child to studying martial arts and taking out the school bully with a single punch to spending a month subsisting on hotdogs and oranges to test his self-discipline and ability to live frugally. These stories are difficult to believe individually; taken together, they strain credulity. Despite this, reporters routinely write "Elon Musk did – –" instead of "Elon Musk said he did – –".

1b. Also important to note that, like many conmen and manipulative people, Musk often relies on appeals for sympathy and personal "revelations" to win over listeners and breakdowns skepticism. This is particularly on display in the infamous Rolling Stone cover story.

1c. None of this is all that important for the state of Tesla, but it tells us a great deal about the state of 21st century journalism.

2. Even if the every-waking-hour story were true, it would hardly be addressing the real problems the company is having. Musk has no relevant experience in the field of auto production and he is, as previously mentioned, a terrible engineer. Even as a way of motivating the troops (an area where Musk has shown a natural gift) this is probably a waste of time thanks to his increasingly toxic relationship with Tesla workers. If he actually wanted to solve this problem, rather than pitching a tent on the production line floor, he would be on a plane trying to poach top talent from other companies.

3. The story does, however, make sense when viewed through a framework of magical heuristics. Keep in mind that one of the primary heuristics, especially when dealing with Musk, is the belief that certain chosen ones have the ability to will things into existence. Though this is always couched in the language of science and business, the real precedents are Merlin conjuring a dragon or Yoda levitating a spacecraft. Closely related to this is the heuristic of destiny. Instead of Merlin and Yoda, think Arthur or Harry Potter or perhaps even a more explicitly messianic figure. Musk repeatedly says that, though his burdens are great, he accepts them because there is no one else who can take them from him.

Keeping things in perspective. This interview will not decide Elon Musk's role in Tesla (his tweet about taking the company private might, but that's a topic for another post). The survival of Tesla will not determine the fate of electric vehicles. And while they have an important part to play, electric vehicles will not be the most important factor in the futures of either transportation or climate change. This isn't that big of a story.

It is, however, an instructive one. We live in an age when massive rivers of money are diverted based on hype, credulous journalists and investors, and folklore passing itself off as business plans. The results were never going to be pretty.

Shows with legs – – more background on the Netflix thread (and an excuse for a Friday post of MeTV promos)

[corrected -- Dragon hears "nonrival" as "nonviable"]


I've probably spent too much time on this thread already, but one of these days I ought to do a post on just how problematic the Netflix exclusivity model is, how it goes against the well-established but deeply weird economics of certain nonrival goods. (When increasing supply increases demand, things get very strange very quickly. Insert highly appropriate Twilight Zone reference here.)

For now, we'll focus on one specific corner of the topic, television shows that maintain a viable and highly lucrative syndication presence for decades, often actually growing in popularity since their initial run. I'm not talking about programs that form the basis for reboots or reunions or sequels, but of shows where the original episodes continue to draw large viewerships.

We could have a long interesting discussion on the psychology behind the appeal of the familiar. You probably coulld even come up with a few pretty good research topics on the subject, but I want to keep the focus on the business side. Television became a national mass medium in the late 40s. Within its first decade, it started producing shows like I Love Lucy and Perry Mason, now both over 60 years old, which would continue to maintain a surprisingly steady audience to this day.

The return on investment of these programs is stunning. With a handful of exceptions, all of the following shows turned a nice profit during their original network run. Everything since is gravy.


I Love Lucy

Perry Mason

Leave It to Beaver

The Twilight Zone

The Andy Griffith Show

The Adams family/the Munsters

Bewitched/I Dream of Jeannie

Star Trek

MASH

Columbo

Taxi

The Cosby show (until recently)/Roseann (until recently)

Golden Girls

Cheers/Frasier

Seinfeld

Friends
.
The Simpsons

.Married with Children

Law and Order/CSI/NCIS

And many others.

Nobody understands the economics of these shows better than Weigel Broadcasting, the company that almost single-handedly developed the entire terrestrial superstation segment of the industry. One of the keys to their extraordinary ratings success has been their knowledgeable and affectionate treatment of the material and their respect for their audience.

From Chicago Magazine:

Still under family ownership more than 40 years after its inception, Weigel Broadcasting stands as the last independent television outfit in the city and one of the last in the country. So while the network affiliates in town (WBBM, WMAQ, WLS) blare forth with new, expensively created fare, Weigel’s channels beam with Sabin’s intuition and pluck. “Neal is doing the best television in Chicago with the least amount of resources and the toughest obstacles,” says the former Chicago Sun-Times columnist and local television/radio sage Robert Feder.

Nowhere does this come through more than in their stations promos.

Here's Carl Reiner's reaction to one.



.

Here's more from Feder on Weigel's promos.

And here are a few more favorites to close the week.




[And yes, I believe that may be the same set.]

Trump and testifying

This is Joseph

There have been a lot of calls for president Trump to testify about his actions in office, for some pretty understandable reasons.  However, this seems to misunderstand the way that the modern US criminal justice system is designed.  Here is a great twitter thread explaining it.  My favorite part is:

Making incorrect statements has been a source of many easy convictions from what I can tell.

This is not to say that this is a good system.  I am especially sad that federal agents may lie and suspects face criminal jeopardy for any statements that they make that are not perfect.  Heck, it may even be an innocent error on the part of the investigator that they think you are lying about.  Guess who faces charges for this innocent error?

So I do think that I would like to hear the president defend his actions and I worry greatly about the optics here.  But saying "just tell the truth" has the risk of misleading people into thinking that they shouldn't consult extensively with a lawyer first (which to be fair, the president does have one) and that the situation is not one of extreme danger.  I was impressed with how Peter Strzok refused to commit to exact numbers without his case files.  Because if he had made a mistake, recollecting events over a year ago, he might have been charged with perjury or making a "material false statement".  He was a law enforcement professional, which Donald Trump is not.  Not are you and I.

So I do think that we should be very clear about how it is not incriminating to avoid interviews with law enforcement (the point of the 5th amendment), especially given the way that the legal system works.  Has anybody not seen this video yet?

So I do want to have explanations for all sorts of things.  But I can totally understand why agreeing to an interview with a prosecutor is both a) risky and b) enormously time consuming (in terms of careful and relentless preparation).

Revisiting the Big Swinging Check Syndrome

From Wikipedia

Season		Episodes		Originally aired		Nielsen ratings
				First aired	Last aired	Rank	Average viewers (millions)
	1	22		September 23, 2013	May 12, 2014	6	14.95[14]
	2	22		September 22, 2014	May 14, 2015	14	13.76[15]
	3	23		October 1, 2015	May 19, 2016	22	11.19[16]
	4	22		September 22, 2016	May 18, 2017	30	9.25[17]
	5	22		September 27, 2017	May 16, 2018	42	8.41[18]

This is another bit of context to keep in mind when following the Netflix thread.

Tuesday, September 2, 2014

Netflix and the big swinging check syndrome

Another post in what what was supposed be a fairly brief Netflix thread. I want to move on to other topics, but this latest news item was just too good an example of certain bad trends in journalism to pass up.

You may have seen the following news story earlier:

Netflix Acquires ‘The Blacklist’ For $2 Million An Episode

EXCLUSIVE: In what is believed to be the biggest subscription video-on-demand deal for a TV series, I’ve learned that Netflix has acquired the rights to hit NBC drama The Blacklist from Sony Pictures TV in a deal that will net $2 million per episode. I hear Season 1 of the series starring James Spader will debut on the streaming service next weekend. As for future seasons, Netflix usually makes them available shortly after the season finales.

Sony TV first tested the off-network market waters for The Blacklist in March. While other streaming services, like Amazon and Hulu, do joint syndication deals with cable networks, Netflix, which largely pioneered the series SVOD business, insists on getting first dibs. Twentieth Television just recently sold New Girl to TBS and MTV, more than an year after prior seasons of the Fox series landed at Netflix in a rich deal, said to be worth $900,000 an episode. Like was the case with New Girl, I hear Sony TV has the right to also sell The Blacklist in cable and broadcast syndication, with Netflix getting an exclusive first window. The $2 million per-episode fee is said to be the biggest for an off-network series paid by Netflix (or any others streaming company), eclipsing previous record holder, AMC’s The Walking Dead, whose sale price to Netflix is believed to be $1.35 million per episode.

For starters, you will notice that the headline is somewhat misleading. Netflix did not "acquire" the Black List in the sense that, say ABC would have. The show will still be running on NBC next year. Nor did it acquire the rights to stream the episodes during the regular season; those will presumably stay with Hulu. What Netflix did acquire was the right to stream the previous year's episodes.

Furthermore, if you hit a few relevant Wikipedia pages and do some quick back-of-the-envelope calculations, you will see it is difficult to see how Netflix can justify this price-per-episode to its shareholders or how Sony could have negotiated it.

It is the nature of television, whether broadcast or streamed, that while the quality has a way of tapering off after a few years, the commercial value tends to increased sharply once a show has established itself. As a rule of thumb, it is not until programs approach 100 episodes that you start talking real money.

Just to put things in perspective, while a long running, syndication friendly, proven hit like NCIS can bring in over $2 million a year. That is very much an upper bound. The Blacklist is years away from having a viable syndication package. Even when it gets there, its serialized elements will probably keep it from making the really big bucks. A forty-four million dollar deal one year into a series run is extraordinary. It is almost inconceivable that Sony would not have settled for much less.

I realize that the following point should be too obvious to bother with, but the object of business is to bring in as much money as possible while sending out as little as possible. If Netflix just paid $44 million for something which they could've gotten for 20 or even 10, this would indicate a fundamental lack of confidence by the management of the company.

Here though, we get into one of the great paradoxes of modern business journalism. From a strictly logical standpoint, the best run businesses are, almost by definition, those which do the most with the least. From an emotional standpoint, journalists are most impressed by those executives who spend extravagantly without apparent hesitation.

For lack of a better word, the willingness to sign large checks is seen as a sign of virility. The bigger the check, the more positive the impression it makes on the reporters covering the story. The soundness of the purchase does not matter, nor does its positive or negative impact on the executive's company.

Netflix has long been something of a joke within the entertainment industry for its tendency to pay more than top dollar for properties that have already been turned down by everybody else and yet Reed Hastings' reputation as a visionary business genius simply grows stronger.

Along similar lines, when Mark Zuckerberg paid an exorbitant amount of money for a company the New York Times simply gushed with enthusiasm, even though it was later revealed that the primary selling point of the company was the fact that the founder threw awesome parties.

Hastings and Zuckerberg may stand out but that doesn't mean they aren't representative. Executives, particularly tech executives, are routinely lauded for big, bold deals, even when those deals make no sense from a traditional business standpoint. Like so much business coverage we see these days, what is presented as rational analysis is a series emotional reactions to charismatic personalities, catchy narratives and the reflected glow of great wealth.

What does Netflix really want? Look at the content quadrants

To make sense of the company's approach toward original content, it is useful to think in terms of long-term IP value vs the hype-genic, those programs that lend themselves to promotion by being awards friendly or newsworthy. For example, a talk show would be in the high hype/low IP quadrant. You have famous people saying topical, interesting, sometimes even important things. The articles pretty much write themselves, but in terms of IP, the genre has a shelf life somewhere between a ripe peach and a properly refrigerated gallon of milk. After over 60 years, the best anyone has managed to do is package a few low rated, niche programs for nostalgia channels out of the absolute cream of the genre. The same goes for art films like Beasts of No Nation and documentaries like Icarus (and no, the bump in IP value that Oscar bestows is not worth what Netflix paid to get it). Easy to book the creators on Fresh Air but don't count on any real viewership five years from now.

By comparison, as previously mentioned, the bulk of the Netflix children's slate has no IP value whatsoever. Since journalists outside of the entertainment industry have little interest in the segment and no understanding of its importance, this falls in the low hype/low IP quadrant. Licensing high name recognition kids shows is essential for building the subscriber base, but it is strictly a short-term investment.

When you start categorizing the various shows according to quadrant, keeping in mind the additional goals of building the subscriber base and not spending money too wastefully (even Netflix has its limits), you can't help but notice that the distribution is not at all consistent with what you would expect given the stated goals and strategy of the company.

We can quibble over some of the classifications. Despite its coult status, Stranger Things arguably falls into the high/high quadrant. What about the Crown? Historical costume dramas have sometimes proven to have legs, but the record is mixed and it's difficult to see how Netflix will ever compete with BBC catalog.

Quibbles aside, it is fairly obvious that Netflix has a strong preference for shows that are easy to promote and that a significant portion of their original content budget (and presumably virtually all of their remaining content budget) is going toward shows that contribute little or nothing to the content library. If Netflix really is playing the wildly ambitious, extremely long term game that forms the basis for the company's standard narrative and justifies incredible amounts of money investors are pouring in, then this distribution makes no sense whatsoever. If, on the other hand, the company is simply trying to keep the stock pumped up until they can find a soft landing spot, it makes all the sense in the world.