The Collapse of Complex Business Models (2010)(shirky.com)
shirky.com
The Collapse of Complex Business Models (2010)
http://www.shirky.com/weblog/2010/04/the-collapse-of-complex-business-models/
25 comments
One fun experiment would be for a company to place all it's middle managers on gardening leave. For a year. Give them the same ability to influence as that of a very minority shareholder (i.e. none).
Then see how the bottom line fares. I see three outcomes:
Then see how the bottom line fares. I see three outcomes:
1. Profits are down. Those managers added value after all.
2. Profits about the same. Those managers added nothing.
3. Profits up!! Those managers were dragging them down the whole time. Who knew?
That there are three outcomes does not mean they are equally likely.
Oh, and additional possible outcomes (IMO both more likely than yours):
Oh, and additional possible outcomes (IMO both more likely than yours):
4. the company disintegrates into complete chaos and goes bankrupt before the year is half over.
5. the remaining employees self-organize and the more ambitious among them end up doing exactly what the middle managers were doing before.What will happen is massive ugly in-fighting among professionals over turfs, who is responsible for what, whose faults what is. Eventually, winners of that cut the throat and backstab fight will take the role of middle managers.
And the difference with the current situation is ...
Probably also true in code.
Shirky cites Joseph Tainter. If you want to hear from Tainter directly, which is the podcast that has kept me up at night, listen to this:
podcast (en) – omega tau science & engineering podcast 184 – Societal Complexity and Collapse
https://overcast.fm/+HPTgN-4U
Tainter's book on Amazon (no affiliate link): http://a.co/hDAtqpU
podcast (en) – omega tau science & engineering podcast 184 – Societal Complexity and Collapse
https://overcast.fm/+HPTgN-4U
Tainter's book on Amazon (no affiliate link): http://a.co/hDAtqpU
Man I miss the hell out of Clay Shirky writing stuff on a blog. He barely even posts on Twitter. I guess he had the book about the Chinese smartphone company in 2015
https://www.amazon.com/Little-Rice-Smartphones-Xiaomi-Chines...
.. but nothing else of note? It's hard to tell what he's up to these days, but I sorely miss his blog writing.
https://www.amazon.com/Little-Rice-Smartphones-Xiaomi-Chines...
.. but nothing else of note? It's hard to tell what he's up to these days, but I sorely miss his blog writing.
He left NYU Shanghai earlier this year to move back to NYU Manhattan.
Check YouTube, you’ll still find him around.
To pick a couple of examples more or less at random, last year Barry Diller of IAC said, of content available on the web, “It is not free, and is not going to be,” Steve Brill of Journalism Online said that users “just need to get back into the habit of doing so [paying for content] online”, and Rupert Murdoch of News Corp said “Web users will have to pay for what they watch and use.”
Was that dog whistling the repeal of net neutrality?
Was that dog whistling the repeal of net neutrality?
My favorite is all the financial complexity in order to take advantage of the debt-based economy. I even did a blog post on Google and Mozilla that shows some of the other problems: http://yuhongbao.blogspot.com/2017/12/google-mozilla-and-deb...
"The most watched minute of video made in the last five years shows baby Charlie biting his brother’s finger. (Twice!) That minute has been watched by more people than the viewership of American Idol, Dancing With The Stars, and the Superbowl combined. (174 million views and counting.)"
Not sure why the two use cases are presented as directly competing. The popularity of long form scripted content on Netflix and shows like Walking Dead, Breaking Bad, etc., are huge and not going away even though the methods of distribution are changing from linear broadcast with commercials over cable/satellite to subscription on-demand OTT without ads. That's the transition taking place rather than hours spent viewing 1 minute viral videos taking away from hours spent watching high cost production long-form content otherwise the ratings would be crashing for those shows and Netflix wouldn't be spending billions on production.
Seems like a false dichotomy.
At least a few times per week I go through the YouTube and Vimeo apps on the Apple TV and apart from catching up on late night talk shows on YouTube, and some interesting short-form content on Vimeo, it doesn't at all replace watching high quality (expensive, complex) content from iTunes and Netflix.
The article also doesn't cover live programming at all, which is increasing exponentially in complexity for things like sports (Olympics coverage, specifically) but also a ton of live event production that wasn't possible before complexity (new technology) increases. Again, user-generated live (Periscope, YouTube) is additional, and doesn't replace watching that content either. There's a ton of room for more complexity with new technology for things like the Super Bowl with tiny 4K cameras in each helmet and delivery over web streaming with viewers watching from whatever angle they want, etc., that user generate content has no means of replacing.
The challenge is managing the shift from ad revenue to subscription revenue, and subsequent competition for the consumer's total monthly subscription budgets, rather than complex production being challenged by non-complex (user generated) content.
Unlike the AT&T example listed, large companies are already aggressively moving towards acquiring content rights and shifting to building OTT/VOD platforms, which is a key motivator of the recent large acquisitions like AT&T (ironically) and Time Warner / Turner / HBO, and Disney and Fox... the pivot is underway and whether or not it is successful doesn't seem related to those companies not being able to simplify but rather if they can avoid a fall in revenue from loss in ad sales during the transition process.
Not sure why the two use cases are presented as directly competing. The popularity of long form scripted content on Netflix and shows like Walking Dead, Breaking Bad, etc., are huge and not going away even though the methods of distribution are changing from linear broadcast with commercials over cable/satellite to subscription on-demand OTT without ads. That's the transition taking place rather than hours spent viewing 1 minute viral videos taking away from hours spent watching high cost production long-form content otherwise the ratings would be crashing for those shows and Netflix wouldn't be spending billions on production.
Seems like a false dichotomy.
At least a few times per week I go through the YouTube and Vimeo apps on the Apple TV and apart from catching up on late night talk shows on YouTube, and some interesting short-form content on Vimeo, it doesn't at all replace watching high quality (expensive, complex) content from iTunes and Netflix.
The article also doesn't cover live programming at all, which is increasing exponentially in complexity for things like sports (Olympics coverage, specifically) but also a ton of live event production that wasn't possible before complexity (new technology) increases. Again, user-generated live (Periscope, YouTube) is additional, and doesn't replace watching that content either. There's a ton of room for more complexity with new technology for things like the Super Bowl with tiny 4K cameras in each helmet and delivery over web streaming with viewers watching from whatever angle they want, etc., that user generate content has no means of replacing.
The challenge is managing the shift from ad revenue to subscription revenue, and subsequent competition for the consumer's total monthly subscription budgets, rather than complex production being challenged by non-complex (user generated) content.
Unlike the AT&T example listed, large companies are already aggressively moving towards acquiring content rights and shifting to building OTT/VOD platforms, which is a key motivator of the recent large acquisitions like AT&T (ironically) and Time Warner / Turner / HBO, and Disney and Fox... the pivot is underway and whether or not it is successful doesn't seem related to those companies not being able to simplify but rather if they can avoid a fall in revenue from loss in ad sales during the transition process.
All content competes with each other, because humans still have finite time. Personally, I have gone through periods of not watching any long-form, scripted shows, and primarily watched content on YouTube about my specific interests. I have a finite amount of leisure time in the evening, and every option I have - books, shows, video games, dinner with friends, YouTube channels, etc. - is in direct competition with everything else.
Yes, obviously true in terms of finite time in the day. I think the total time is actually increasing (although up to a finite point) but the main point is that it's more of a transition from linear/cable/sat/ads to VOD/OTT/mobile as the primarily factor that the large companies have to manage, rather than heaving losses in time spent on complex (high budget professional content) vs non-complex (user generated).
To imagine an extreme end of the spectrum as a thought experiment, I can't imagine that 5 years from now I'll be watching 1 minute viral videos all evening instead of professionally produced long form content. Candy is great but I still haven't replaced a (complex) full meal dinner with a pile of candies.
Even for video content on Facebook, I'd assume as that takes up more of the finite time it will trend towards increasing volumes of professionally produced content.
There's a lot of interesting low budget user generated content but that won't change the fact that a lot of value created by professional, extremely talented writers, producers, cinematographers, editors, special effects graphics creators, etc..
To imagine an extreme end of the spectrum as a thought experiment, I can't imagine that 5 years from now I'll be watching 1 minute viral videos all evening instead of professionally produced long form content. Candy is great but I still haven't replaced a (complex) full meal dinner with a pile of candies.
Even for video content on Facebook, I'd assume as that takes up more of the finite time it will trend towards increasing volumes of professionally produced content.
There's a lot of interesting low budget user generated content but that won't change the fact that a lot of value created by professional, extremely talented writers, producers, cinematographers, editors, special effects graphics creators, etc..
> I can't imagine that 5 years from now I'll be watching 1 minute viral videos all evening instead of professionally produced long form content.
What's the youngest person you have the chance to observe the evening routine of?
Both my girlfriend and my sister will go to bed every evening, pull out their phone, and spend an hour watching 1 minute short viral videos on Instagram, Facebook, and Snapchat. Endless stream. 1 minute bits of content.
My girlfriend has gone so far as saying Snapchat's serious channels are the best service to catch up on the news.
What's the youngest person you have the chance to observe the evening routine of?
Both my girlfriend and my sister will go to bed every evening, pull out their phone, and spend an hour watching 1 minute short viral videos on Instagram, Facebook, and Snapchat. Endless stream. 1 minute bits of content.
My girlfriend has gone so far as saying Snapchat's serious channels are the best service to catch up on the news.
Definitely a good point, although it might be a reflection of high budget long form content reflecting interests of older people more than younger generations, and as they grow into being more represented at the professional tiers (which takes years of experience) they'll produce new shows that reflect their values and interests.
In terms of younger audiences though there is also huge success with high budget animation. Pixar's success over time still seems more tied to quality of each film rather than declining consistently over time due to loss of interest in the format itself.
For news, 100% agree, ripe for disruption from social media (or at least web over cable news) although that is obviously facing new challenges in terms of reliability (i.e. Facebook/Twitter re election).
In terms of younger audiences though there is also huge success with high budget animation. Pixar's success over time still seems more tied to quality of each film rather than declining consistently over time due to loss of interest in the format itself.
For news, 100% agree, ripe for disruption from social media (or at least web over cable news) although that is obviously facing new challenges in terms of reliability (i.e. Facebook/Twitter re election).
The trend I've seen on Snapchat is high budget high quality production of 1 minute viral videos. Think NatGeo documentary, but delivered as 5 20second videos with captions.
Similar to how a lot of high budget production moved from making 3 hour movies, to making 10 1 hour episodes. Overall more and better content, but in smaller easier to digest pieces.
I think that's a trend that isn't going away. People, especially as they age, have less and less time to stick to one thing. If you can cut it up for them and make it nibbleable, they will go for it.
When was the last time you chose to watch a full movie at home in one sitting? I bet you watch Netflix series instead, or pause your movie and continue the next day.
Similar to how a lot of high budget production moved from making 3 hour movies, to making 10 1 hour episodes. Overall more and better content, but in smaller easier to digest pieces.
I think that's a trend that isn't going away. People, especially as they age, have less and less time to stick to one thing. If you can cut it up for them and make it nibbleable, they will go for it.
When was the last time you chose to watch a full movie at home in one sitting? I bet you watch Netflix series instead, or pause your movie and continue the next day.
Also, I'm the same way with shifting to more relaxing things like reading and dinner with friends so totally agree on that! I was writing more with what I think of as the average consumer. I would like to see the trend of more complex/expensive high quality shows (like Breaking Bad and The Wire) continue and wouldn't worry so much about reality tv being killed by viral content.
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I was actually thinking this about the movie/tv industry recently. in order to get better, it has to get cheaper / less quality / quicker turn around times.
But today we have people paying for high quality content streamed over the net. Its the business model of Netflix and Amazon.
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He should have lead with this.