Quotulatiousness

February 9, 2023

“Prediction is very difficult, especially about the future” … but sometimes it’s almost prophetic

Filed under: Books, Business, Education, History, USA — Tags: , , , , , , — Nicholas @ 05:00

Once again, Ted Gioia’s Honest Broker Substack has something interesting I’d like to share with you (I wouldn’t blame you at all for cutting out the middleman and just subscribing for yourself):

Today I want to focus on a single paragraph published in 1960.

You’re asking yourself: How much can a single paragraph matter — especially if it was written 63 years ago? But read it first and judge for yourself.

It’s a chilling paragraph.

[…]

By any measure, [Paul Goodman] was one of the most eccentric thinkers of the era. Yet he anticipated our current situation with more insight than any of his peers.

Let’s look at this one paragraph from the Preface to Growing Up Absurd. It’s a long paragraph — it takes up most of two pages. So we will break it down into pieces.

Goodman begins with a puzzle he needs to solve — society is stagnating everywhere, and we all can see it. But there’s no action plan to fix it. There’s a lot of huffing and puffing and finger-pointing everywhere, but nobody has even started on developing a practical agenda.

According to Goodman, this is because people “have ceased to be able to imagine alternatives”. Everybody accepts that the current system “is the only possibility of society, for nothing else is thinkable”.

Now comes his analysis, and — to my surprise — Goodman begins by talking about music. This was the last thing I expected in a social critique, but for Goodman the manufacturing of hit songs is a metaphor for everything else that’s wrong in a stagnant society.

He writes:

    Let me give a couple of examples of how this [inability to imagine healthy alternatives] works. Suppose (as is the case) that a group of radio and TV broadcasters, competing in the Pickwickian fashion of semi-monopolies, control all the stations and channels in an area, amassing the capital and variously bribing Communications Commissioners in order to get them; and the broadcasters tailor their programs to meet the requirements of their advertisers of the censorship, of their own slick and clique tastes, and of a broad common denominator of the audience, none of whom may be offended: they will then claim not only that the public wants the drivel that they give them, but indeed that nothing else is being created. Of course it is not! Not for these media; why should a serious artist bother?

When I first read this, I was dumbstruck. Goodman wrote this during the winter of 1959 and 1960, when radio stations were independent and freewheeling. Back in my teen years, a single business was only allowed to control one AM station and one FM station. In 1985 this was increased to 12 stations on each band. And in 1994 this was raised again, this time to 20 AM stations and 20 FM stations.

But then all hell broke lose when the Telecommunications Act of 1996 passed in the Senate by a 91 to 5 margin and was signed into law. Now the sky was the limit — and all the airwaves it contained.

Soon Clear Channel Communications owned more than 1,200 radio stations in some 300 cities. The company began the process of standardizing and homogenizing our musical culture. We still suffer from that today.

Even after radio started losing influence in the Internet Age, huge streaming platforms (Spotify, Apple Music, etc.) ensured that access to the ears of America would be controlled by a tiny number of huge corporations. A musical culture that was once local, indie, and flexible has become centralized, corporatized, and stagnant.

How could Paul Goodman even dream of such a scenario back in 1960? That future was decades away at the time.

But we are only at the start of this visionary paragraph. Goodman now explains that the same thing will happen in universities.

Colleges and schools were small and non-bureaucratic back in 1960. Yet Goodman sees a crisis looming. On the next page Goodman warns against “the topsy-turvy situation that a teacher must devote himself to satisfying the administrator and financier rather than to doing his job, and a universally admired teacher is fired for disobeying an administrative order that would hinder teaching”.

Administration at US colleges has grown exponentially in the last two decades and has turned almost every academic institution into a plodding bureaucracy — but how in the world did Goodman anticipate this in 1960?

Now let’s return to our chilling paragraph. Immediately after discussing radio stations, Goodman adds a gargantuan sentence. It jumps all over the place but hits the target at every twist and turn:

    Or suppose again (as is not quite the case) that in a group of universities only faculties are chosen that are “safe” to the businessmen trustees or the politically appointed regents, and these faculties give out all the degrees and licenses and union cards to the new generation of students, and only such universities can get Foundation or government money for research, and research is incestuously staffed by the same sponsors and according to the same policy, and they allow no one but those they choose, to have access to either the classroom or expensive apparatus: it will then be claimed that there is no other learning or professional competence; that an inspired teacher is not “solid”; that the official projects are the direction of science; that progressive education is a failure; and finally, indeed — as in Dr. James Conant’s report on the high schools — that only 15 per cent of the youth are “academically talented” enough to be taught hard subjects.

Here in a nutshell is the credentialing crisis of our times. Learning is replaced by exclusionary certification programs that limit career opportunities — unless you take out loans and “purchase” the necessary credential from these academic gatekeepers.

This has become so destructive in our own time that many are crushed by student loans, and others seek ingenious ways of bypassing college entirely. There’s no way that Goodman could have grasped this in 1960 — when only 7.7 percent of Americans had college degrees.

Nor could he have known about the replicability crisis in science or the destructive games now played in awarding of scientific grants. Those are the problems of our times — not his.

But somehow Paul Goodman saw it coming.

February 7, 2023

Disney – An Empire In Collapse

Filed under: Business, Media, Politics, USA — Tags: , , , , , — Nicholas @ 04:00

The Critical Drinker
Published 6 Feb 2023

Disney isn’t looking too healthy these days, with massive financial losses, collapsing stock prices and internal power struggles threatening to tear the House of Mouse apart at the seams. How did this happen? Let’s find out.
(more…)

February 6, 2023

How We Make Our Videos (and what it costs)

Filed under: Business, History, Media — Tags: , , — Nicholas @ 04:00

World War Two
Published 5 Feb 2023

We’re excited to finally answer all your questions about where Indy lives, how we produce the series, and how many of us there are in the TimeGhost Team!
(more…)

Why Traditional English Cheddar Is Aged In Caves | Regional Eats

Filed under: Britain, Business, Food, History — Tags: , — Nicholas @ 02:00

Food Insider
Published 9 Oct 2019

The earliest record of cheddar anywhere is at Cheddar, in Somerset, in 1170. The land around this village has been at the heart of English cheesemaking since the 15th century. Today, as many Cheddar producers have upscaled and require more land, there is only one traditional cheesemaker left in the village.
(more…)

QotD: US railroad land grants

Filed under: Business, Economics, Government, History, Quotations, Railways, USA — Tags: , , , — Nicholas @ 01:00

In 1871, Kentucky Congressman J. Proctor Knott gave a humorous speech on the floor of the House of Representatives ridiculing the idea of giving land grants to western railroads. He focused on Duluth, which at the time had about 3,000 residents, and his basic argument was that U.S. taxpayers in general should not be required to subsidize projects that benefitted only a few.

The speech was widely reprinted by those skeptical of government pork barrel (a term that first became popular about the time Knott gave his speech). Sixteen years later, Northern Pacific, which received what was probably the largest land grant to a private company in American history, reprinted the speech in this brochure.

This might seem strange except that NP annotated the speech with recent facts in bright red letters, such as that Duluth had grown to house 26,000 people by 1886, that more wheat was delivered to Duluth each year than to any other American city, and that it also saw deliveries of millions of board feet of lumber and hundreds of thousands of tons of iron ore each year.

NP didn’t say so in so many words, but its point was clearly that the land grants, contrary to Knott’s predictions, were a good thing for most if not all Americans. However, the brochure also didn’t mention that James J. Hill was proving that a railroad that didn’t receive any land grants or subsidies could provide just as many benefits without going bankrupt, which would leave both investors and taxpayers in the lurch. (The St. Paul & Pacific did receive a small land grant, but Hill paid fair market value for that railroad and land after it went bankrupt, thus Hill didn’t particularly benefit from the subsidy.)

Train Lover (Randal O’Toole), “Debate Over Railroad Land Grants”, Streamliner Memories, 2022-11-01.

February 4, 2023

Federal regulation of the Canadian book market has resulted in 95% of the market now being foreign owned

Filed under: Books, Business, Cancon, Government — Tags: , , , — Nicholas @ 05:00

For the record, I don’t think this kind of cultural regulation is a good idea to start with, but as Ken Whyte points out, if staving off foreign ownership was the primary intent, could it have failed any more comprehensively than this?

Sometime last year, the Association of Canadian Publishers, which represents most of the independent book publishers in English Canada (Sutherland House is not a member), began discussing a radical — some might say dangerous — new form of regulation for the Canadian book industry.

The ACP started from the reasonable position that the existing federal approach to regulating the Canadian book industry has failed. That approach is to encourage a Canadian-owned book sector and, ipso facto, to discourage foreign ownership of Canadian publishing. Successive Canadian governments, Conservative and Liberal, have paid lip-service to the policy and failed to enforce it. The multinational publishers — Simon & Schuster, Penguin Random House, HarperCollins — have moved into Canada in a big way. Great chunks of the Canadian-owned industry, including McClelland & Stewart and Harlequin Books, have been sold to foreign buyers.

The multinationals now account for about 95 or 96 percent of book sales in Canada. All but the last 5 or 6 percent of their revenue comes from sales of imported books, most of them produced in the US or UK.

The Canadian-owned component of the book sector, which produces the vast majority of Canadian author books, has shrunk to about 4 or 5 percent of the market and sales of Canadian-authored books, says the ACP, have “flatlined”.

So you can see why the ACP is interested in a new approach: for more than half a century, while pursuing an official policy of encouraging Canadian-ownership, our government has managed to hand almost the whole of our book industry to foreign-owned firms.

I, too, am interested in a new approach. It’s the ACP’s next step that worries me.

The ACP has been watching over the past couple of years as the federal government rewrites its Broadcasting Act. The thrust of Bill C-11 is to bring foreign-owned streaming services operating in Canada — the likes of Netflix, Apple, YouTube — under the jurisdiction of the Canadian Radio-televison and Telecommunications Commission (CRTC). The bill would grant the CRTC the power to impose on streaming services the same rules it imposes on the likes of CTV and Global and the companies that own them. It would compel streamers to use Canadian talent, abide by Canadian diversity requirements, prioritize Canadian content on their platforms, and give a percentage of their revenues to a fund to support the production of Canadian content.

It has occurred to the ACP that no one in government is asking foreign-owned book publishers to abide by Canadian content quotas or to deliver percentages of their revenue to a fund to support Canadian-owned book producers: “The absence of a CRTC or related regulatory body, along with the policies and programs that such a body can enact, has meant that non-Canadian firms enjoy unfettered access to the Canadian marketplace.”

That’s not quite right. Non-Canadian firms dominate Canadian publishing because the feds won’t enforce their existing policy, not because we don’t have a CRTC for books. In any event, the ACP is embracing the spirit of Bill C-11.

Oh, goody! Government bureaucratic oversight is bound to make Canadians more interested in reading Canadian books, right? I see no way that this could possibly fail.

February 1, 2023

QotD: Creating a hostile working environment

Filed under: Business, Quotations — Tags: , , — Nicholas @ 01:00

I can honestly say that in my 40+ years in business life, I never saw a man who could compete with any woman in creating an atmosphere of devious backbiting, career assassination and downright unpleasantness in the workplace. And in most cases it had nothing to do with crap like sexual harassment, either (although I saw that little ploy used quite often). Women were (and are) just as willing to stab other women in the back, if it benefits them — or sometimes just out of outright spite.

Anecdote is not data, of course; but ask any ordinary working woman* whether she’d prefer to work with men, or in a female-only workplace. The response may surprise you.

    * This definition would exclude gender careerists and almost all rabid feministicals.

Kim du Toit, “Just Sayin'”, Splendid Isolation, 2022-10-26.

January 25, 2023

Sometimes – rarely – the boss really does embody all those “creative genius” tropes

Filed under: Business, Media, USA — Tags: , , — Nicholas @ 05:00

At The Honest Broker, Ted Gioia considers the impact Steve Jobs had on Apple:

I share these reactions, because many other sectors of our culture (especially music) suffer from a similar malaise. And in most instances, the problems start at the top.

I’ve seen in so many different circumstances how the entire organization takes on the personality of the CEO — for better or worse. I’ve also seen how the replacement of a single individual can turn a bad situation into a great one, and vice versa.


The case of Steve Jobs is fascinating, and perhaps alarming too. He left Apple twice, and both times something similar happened.

In the first instance, Jobs was fired as CEO in 1985. The last thing he did before losing his job was launch the Macintosh computer. When he returned to Apple 12 years later, the single biggest source of revenue for the company was still the Macintosh. After more than a decade, the company was depending on the creativity of the guy they fired.

Steve Jobs died in 2011, and we have now reached the exact same time lag as before. Twelve years have elapsed since Jobs’s final departure, and the last big project he undertook before his death was the iPhone. And now after a dozen years, Apple’s largest source of revenues is still the iPhone. Once again, they are riding the momentum of his creativity, and have done shockingly little to expand his legacy.

By the way, in the interim between the two stints as Apple CEO, Jobs founded NeXT and ran Pixar. Fifteen Pixar films now rank among the 50 highest grossing animated films of all time, and they have won 23 Academy Awards. And because of his sale of Pixar to Disney, the entrepreneur’s widow Laurene Powell Jobs inherited 138 million shares of Disney stock.

That’s pretty good results for the lull in your tech career after you’ve been fired.

I know Jobs has many detractors. And maybe he was a hardass boss. In fact, he almost certainly was a hardass boss. But it’s tough to ignore those results — which not only changed a company but the entire culture of our times.

January 21, 2023

QotD: Farmers’ markets are a scam

The first thing I saw was a number of individuals taking photographs of purple carrots and multi-coloured tomatoes to doubtless upload them to Instagram. Customers were shoved out of the way so they could achieve the perfect shot. I can imagine the description that would be added to the images: “At my local market. Buying all organic produce to juice and buying a load of Guatemalan coffee beans to support local farmers. #FoodIsMood”

Carefully navigating the Bugaboos, words leapt out at me from the stalls: “gluten free”, “vegan”, “no added sugar”, “no saturated fats”. It was more like advice from a doctor than things to eat. At the cheese stall I admit I was tempted by the chilli jam accompaniment, as it was described as “rich, tangy tomato with purple shallots and plump sultanas”, but all I needed to do was look at the price — a startling £10 for the small jar with a handwritten label — to decide that the Branston pickle sitting in my store cupboard would do just fine.

An older woman standing by the cheese stall looks as if she is about to pass out. It’s not the heat; rather she has just been informed by the vendor, a young woman with green hair and several face piercings, the price for a piece of Brie and a couple of small goat cheeses. And to add insult to injury, when the customer hands over the £20 to pay she is told, “We only take cards.”

So much for a local, friendly community space. The truth is, these markets are a rip-off, aimed at posturing fools with more money than sense, and food snobs that believe if food isn’t prohibitively expensive for the masses, it’s not good enough to take home and store in their gigantic Smeg fridge.

Julie Bindel, “Mugged by a mud-caked spud”, The Critic, 2022-10-15.

January 20, 2023

How to evaluate character

Filed under: Business — Tags: — Nicholas @ 04:00

At The Honest Broker, Ted Gioia is in an advice-giving mood so he’s sharing his own eight techniques for evaluating character:

I wish somebody had told me these things when I was younger. I now practice them when I need to get a fast assessment of people I don’t know well.

1. Forget what they say — instead look at who they marry.
This is a sure-fire technique, and it tells you important things about people you can’t learn any other way. A person’s choice of a spouse — or if they aren’t married, their closest lifelong partner — is much more revealing than anything they say or do in public.

This choice tells you about their own innermost longings, expectations, and needs. It tells you what they think of themselves, and what they think they deserve in life (or will settle for). It is, I believe, the clearest indicator of priorities and values you will ever find.

This advice is diametrically opposite to what I was taught as a youngster, but I think Ted is probably right here. I’d go further and say that observing how the person interacts with a spouse or significant other will tell you much more about that person’s character. If they’re abusive or dismissive of their nearest-and-dearest, how will they treat you?

2. See how they treat service workers
People reveal their true natures when they deal with others who have no power and can never return a favor. They feel immune and free of all consequences — so they let it rip. Their true self comes to the forefront.

This is one I figured out for myself in my first few jobs. Bullies and sadists just can’t help themselves when they find themselves in a situation where they can lord it over an underling with no repercussions. It’s disgusting to watch this kind of performative power imbalance and should be a red flag for anyone you hope to do business with.

3. Discover what experiences formed their character in early life
This is another CEO story, but with a positive lesson in this case. I met this particular corporate power broker when he interviewed me for a project, and we later became quite close.

In the interview, he started by asking me about my earliest experiences — entirely focused on what I did before reaching the age of twenty. I thought this was just small talk, and eventually he would change the subject in order to inquire about my qualifications and plans for the project.

But he never changed the subject. We spoke for more than one hour, and solely about my childhood, my teenage years, and how I grew to adulthood.

Later he explained to me that he lets other people in the organization worry about boring things like credentials. His belief is that people’s character and ability to handle challenges are almost entirely formed during the first two decades of their life. It’s an unusual case, he said, for people to change in any substantive way after that point — not impossible, but very rare. So those early years were always the focal point for his inquiries.

I don’t think I’ve ever encountered this in the working world. Occasionally, I might have been asked a little bit about my early life, but never to this kind of extent. I suspect such questioning today would be very likely to raise hairs in HR or even provoke lawsuits if pursued to this degree.

7. If they cheat at small things, they will cheat at big things.
I recently heard a man complaining about a bad business deal. His partner had robbed him, and he should have known better.

When they first met, they had played golf. Afterwards his wife told him: “I saw him move the ball when you weren’t looking — don’t get involved with this guy.” He had laughed at this. Why get worked up over a tiny thing like this? It’s just a few inches on the golf course.

But, of course, if someone will break the rules for something as unimportant as a game, what will they do when higher stakes are involved? In this instance, he had a useful warning, but didn’t take it — because he thought it was so small.

I think this is excellent advice in business and in life. Character revelation in the smallest of details.

January 19, 2023

You must be protected from coworkers who threaten your health … by bringing in cake?

Filed under: Britain, Business, Cancon, Government, Health — Tags: , , , , — Nicholas @ 03:00

Christopher Snowden knows a slippery slope when the media pushes another nanny state health concern as serious as cake in the workplace:

    If nobody brought in cakes into the office, I would not eat cakes in the day, but because people do bring cakes in, I eat them.

Who is this co-worker from hell? Who is this whining, snivelling infant demanding that the rest of the world forfeits their small pleasures because she has no self-control?

It is none other than the head of the Food Standards Agency, Susan Jebb, who is in The Times tomorrow comparing cakes to passive smoking.

The full quote reads:

    “We all like to think we’re rational, intelligent, educated people who make informed choices the whole time and we undervalue the impact of the environment”, she said. “If nobody brought in cakes into the office, I would not eat cakes in the day, but because people do bring cakes in, I eat them. Now, OK, I have made a choice, but people were making a choice to go into a smoky pub.”

Indeed they were, Susan, before people like you took that choice away to such an extent that even a pub that put up a sign saying “SMOKERS ONLY” on the door and employed no one but smokers would still forbidden from accommodating them.

I’ve made a few slippery slope arguments in my time — contrary to midwit opinion, they are often valid — but even I never imagined that a workplace smoking ban would evolve into a workplace cupcake ban. Talk about the thin end of the wedge!

    While saying the two issues were not identical, Jebb argued that passive smoking inflicted harm on others “and exactly the same is true of food”.

To inflict something on someone implies that it is done without their consent. In that sense — and leaving aside the question of whether wisps of secondhand smoke are actually harmful — passive smoking doesn’t inflict harm on a person who knowingly goes to a smoky pub. The same is obviously true of someone who offers you a cake. If they held you down and physically shoved it down your throat, that would be a different matter, but surely that is already illegal under some law or other?

Meanwhile, Canadian nanny state enablers are trying to do battlespace prep to get the government to mandate new warning labels to containers of alcoholic beverages and to significantly cut the already low maximum “recommended consumption”:

… a report on the new drinking guidance released Tuesday by the Canadian Centre on Substance Use and Addiction says the warning labels could inform consumers about serious health risks including cancer, the number of standard drinks in a container and the benefits of limiting consumption to two drinks a week.

“Consuming more than two standard drinks per drinking occasion is associated with an increased risk of harms to self and others, including injuries and violence,” the report says.

The guidance is based on the findings of a panel of 23 experts who reviewed nearly 6,000 peer-reviewed studies as part of a two-year process that also considered feedback from 4,845 people during an online public consultation process in spring 2021.

The most recent available data show that alcohol causes nearly 7,000 cancer deaths each year in Canada, with most cases being breast or colon cancer, followed by cancers of the rectum, mouth and throat, liver, esophagus and larynx. Liver disease and most types of cardiovascular diseases are also linked to alcohol use.

The guidance updates Canada’s Low-Risk Drinking Guidelines set in 2011, when two drinks a day were considered low risk and it was believed that women could safely consume up to 10 drinks a week and men could have 15 drinks.

January 18, 2023

Our western gerontocracy

Filed under: Business, Government, Media, USA — Tags: , , , , , , — Nicholas @ 05:00

In The Free Press, Katherine Boyle outlines the death-grip that elderly boomers retain on so many of the levers of our shared society, from government to business to (of course) the legacy media:

“Millennials” by EpicTop10.com is licensed under CC BY 2.0

The tens of millions of Americans that are, like me, millennials or members of the generation just younger, Gen Z, have been treated as hapless children our entire lives. We have been coded as “young” in business, in politics, and in culture. All of which is why we shouldn’t be surprised that millennials are the most childless and least home-owning generation in modern American history. One can’t play house with a spouse or have their own children when they’ve moved back into mom’s, as 17 percent of millennials have. 

Aside from the technology sector — which prizes outliers, disagreeableness, creativity and encourages people in their twenties to take on the founder title and to build things that they own — most other sectors of American life are geriatric.

The question is why. 

There are many theories — and many would-be culprits. Some believe it’s the fault of the Boomers, who have relentlessly coddled their children, perhaps subconsciously, because they don’t want to pass the baton. Others put the blame on the young, who are either too lazy, too demoralized or too neurotic to have beaten down the doors of power to demand their turn.

Then again, life expectancy is growing among the healthy and elite in industrialized nations, so perhaps this is all just progress and 70 is the new 40. But one can take little solace in the growing life expectancy of the last 200 years when comparing ourselves to more productive generations that didn’t waste decades on extended adolescence. 

Every Independence Day, we’re reminded that on July 4, 1776, the most famous founders of this country were in their early 20s (Alexander Hamilton, Aaron Burr) and early 30s (Thomas Jefferson). Even grandfatherly George Washington was a mere 44. These days much of our political class, from Bill Clinton (elected president 30 years ago at age 46) to financial leaders like Warren Buffett (92), and Bill Gates (67) who launched Microsoft 48 years ago, are still dominant three and four decades after seizing the reins of power. CEOs of companies listed on the S&P 500 are getting older and staying in their jobs longer, with the average CEO now 58 years old and staying in his or her role 10.8 years versus 7.2 a decade ago. And our political culture looks even more gray: Twenty-five percent of Congress is now over the age of 70 giving us the oldest Congress of any in American history.

The Boomer ascendancy in America and industrialized nations has left us with a global gerontocracy and a languishing generation waiting in the wings. Not only does extended adolescence — what psychologist Erik Erikson first referred to as a “psychosocial moratorium” or the interim years between childhood and adulthood — affect the public life of younger generations, but their private lives as well.

In 1990, the average age of first marriage in the U.S. was 23 for women and 26 for men, up from 20 for women and 22 for men in 1960. By 2021, that number had risen to 28.6 years for women and 30.4 years for men, according to the Census Bureau, with 44 percent of U.S. women between the ages of 25 and 44 expected to be single in 2030. Delayed adulthood has had disastrous consequences for procreation in industrialized nations and is at the root of declining fertility and all-but-certain population collapse in dozens of countries, many of which expect the halving of their populations by the end of the century.

“Twenty-five is the new 18,” said The Scientific American in 2017, pointing to research that extended adolescence is a byproduct of affluence and progress in society. Which is why the finiteness of a mid-thirties half-life is such a surprise to those in their 20s and 30s. It runs counter to every meme and piece of advice young people receive about building a career, a family, a company and in turn, a country. 

The prevailing wisdom in Western nations is that the ages of 18-29 are a time for extreme exploration — the collecting of memories, friends, partners and most importantly, self-identity. A full twelve years of you! Self-discovery aided by platforms built for broadcasting photos of artisanal cocktails and brunch. And with no expectation for leadership because there will be time for that, a generation can absolve oneself of responsibility for their actions. (Tragically, that was never true for half of the population, which is why we have a generation of extremely accomplished older women, who weren’t really aware how difficult it is to become pregnant at 39.)

January 16, 2023

The music industry fails to capitalize on the vinyl revival

Filed under: Business, Media, USA — Tags: , , , — Nicholas @ 04:00

It’s kind of hard to believe, but the companies that control the pressing of music into vinyl appear to have no clue about the business they’re in:

“Framed Vinyl Album Art: America ‘Homecoming’; Nick Gilder (Studio Copy of Singles From ‘City Lights’ Chosen for AOR); Climax Blues Band ‘FM Live’)” by JoeInSouthernCA is licensed under CC BY-ND 2.0

I’d heard so many grand claims for the vinyl resurgence, but the reality was tremendously disappointing. And I was a late adopter — the revival had been going on for a decade, but record labels still didn’t have their act together.

In my case, I ended up buying vinyl albums, but mostly used ones. I simply couldn’t find new pressings of the records I wanted. This was fine for me, but lousy for musicians and labels — who make no money on the sale of a secondhand vinyl album.

I have some experience in these matters — in my alternative career I worked with CEOs chasing after fast growth product categories. I know how they handle these situations. But, really, it’s no mystery. The strategies you use in this kind of business are very straightforward:

  1. You add manufacturing capacity aggressively — to make sure you have enough product to fuel growth.
  2. You bring down costs by getting scale advantages. But this only happens because unit costs drop as volume increases. So the single biggest goal is to grow sales as hard and fast as possible.
  3. You constantly reduce prices to keep demand building. In some cases, you even set prices below your costs to accelerate growth rates. When I originally saw companies do this I was skeptical — how can you make profits if you sell below your costs? But I soon learned that you eventually got a huge payback.
  4. You keep expanding the product line, so that you constantly have something new and exciting to sell to every potential buyer.
  5. You invest in R&D so that you eventually have a next generation technology to keep the growth going over the long haul.

None of this is easy to do, but it isn’t impossible. It just takes investment, focus, management commitment, and hard work. And later you reap the benefits. You turn a small business into a huge one, and enjoy a big payday.

The record labels could have done that with vinyl. It was taking off — unit sales doubled in just 5 years. And these sales were insanely profitable, because much of the demand was for old music. So labels didn’t even have to pay to sign artists, and cover the costs of recording sessions. The music was already there, with the fixed costs amortized long ago.

They just had to press the bloody album and ship it to the store. How hard is that?

But what did the music industry do?

  • They hate running factories — which is hard work. So they tried to outsource manufacturing instead of building it themselves. Chronic shortages resulted.
  • They refuse to spend money on R&D, so they stayed with the same vinyl technology from the 1950s. In other words, the record business became the only entertainment industry in the world with no plan for technological innovation. In the year 2023, even bowling alleys, bordellos, and bookies are more tech savvy than the major record labels.
  • They want easy money, so they kept prices extremely high. That was bizarre because their R&D and catalog acquisition costs were essentially zero, and they could have priced vinyl aggressively. Instead they treated vinyl as a luxury product, even as they dreamed of it also becoming a mass market option. But you can’t do both without a careful market segmentation strategy — which the labels never even started thinking about.
  • They love hype, so they focused on high visibility vinyl reissues, which look good in press releases, but couldn’t be bothered to make back catalog albums available. After a decade of the vinyl revival, they still hadn’t taken even basic steps in offering a wide product line.

This is a lazy strategy — and the exact opposite of what they should have done. And the results are, of course, predictable.

January 14, 2023

More on the Barnes & Noble turnaround

Filed under: Books, Business, USA — Tags: , , , — Nicholas @ 05:00

In the latest SHuSH newsletter, Ken Whyte looks at the Barnes & Noble recovery story (discussed a couple of weeks back):

“Barnes & Noble Book Store” by JeepersMedia is licensed under CC BY 2.0 .

Back in 2018, the bookselling chain was losing $18 million a year. It had just fired 1,800 full-time employees. About 150 stores had been closed, leaving the company with 600. It had lost its fourth CEO in five years, this one to a sexual-harassment charge. The firm’s big digital initiative, the Nook e-reader, was a flop. The share price was down 80 percent.

Not only was the business failing: it was demoralized. As the writer Ted Gioia noted in a recent newsletter, B&N had lost faith in the public’s willingness to buy books from anyone but Amazon. Its leadership “shifted a huge portion of its floorspace to peddling toys, greeting cards, calendars, and various tchotchkes”. It doubled down on in-store cafes and even tried launching freestanding Barnes & Noble restaurants.

Just when it seemed B&N was certain to follow the path of its former competitor, the Borders chain, which closed in 2011, it was purchased for $638 million (US) by Elliott Advisors, a hedge fund.

SHuSH has been skeptical about the record of hedge funds in the cultural space. We are also skeptical of hedge funds in the retail space where they have a well-established record of buying chains, slashing costs, and driving them into the ground: Sears, Toys R Us, Payless Shoes, Radio Shack, Aeropostale, Sports Authority, etc.

Elliott Advisors is an exception.

The UK based-firm has a demonstrated commitment to bookselling (at least in the medium term — more on this later). It bought the Waterstones chain in 2018. Waterstones and its 283 stores had been rescued from near-bankruptcy in 2011 by lifelong bookseller James Daunt and a Russian backer. Elliott kept Daunt at the helm and a year later bought Barnes & Noble and added this second chain to his responsibilities.

Daunt acknowledged that Barnes & Noble was in rough shape when acquired by Elliott. Its stores were “crucifyingly boring”. But he was confident the chain could be turned around. There was no template or magic ingredient, he said. It was a simple matter of “running really nice bookshops”. To that end, he gives his stores unusual autonomy to develop their own personalities and tailor their stock to the interests of their communities.

Barnes & Noble stores have since dropped most of their crap: they no longer look like big-box flea markets. They’ve quit accepting payments from the major publishers to put their books on display, a practice that brought B&N revenue but left publishers in charge of what customers saw when they walked into stores. Local managers now decide how their books are presented based on what they think will appeal to their customers.

The company used the COVID lockdown to freshen up its dowdy stores. Managers were instructed to take every single book off the shelves and “weed out the rubbish”. Walls were painted, aged carpet replaced, furnishings upgraded. The result is a much improved browsing experience. Readers like to browse.

There were hard decisions, too. Daunt cut the B&N head office staff in half and shed about 5,000 of 30,000 employees.

All in all, it worked. Last spring, The New York Times reported that sales were up and costs were down at Barnes & Noble and that “the same people who for decades saw the superchain as a supervillain are celebrating its success. In the past, the book-selling empire, with 600 outposts across all 50 states, was seen by many readers, writers and book lovers as strong-arming publishers and gobbling up independent stores in its quest for market share … Today, virtually the entire publishing industry is rooting for Barnes & Noble — including most independent booksellers. Its unique role in the book ecosystem, where it helps readers discover new titles and publishers stay invested in physical stores, makes it an essential anchor in a world upended by online sales and a much larger player: Amazon.”

There are not a lot of reliable financial numbers available on Barnes & Noble because it is no longer a public company, but it reports that its 2021 sales in were up 3 percent over pre-pandemic times. Most importantly, sales of books were up 14 percent.

January 13, 2023

In a surprising bit of news, Canadian defence companies still don’t know what the government plans to acquire

Filed under: Business, Cancon, Military — Tags: , — Nicholas @ 03:00

On the CBC News website, Murray Brewster explains why Canadian defence industries haven’t gone to anything like a “war footing” because the federal government hasn’t told them what they plan to purchase or when, despite pleas that they “get with the program”:

The association representing Canada’s defence contractors says it’s going to take a lot more than talk to put the industry on a so-called “war footing.”

In a bluntly-worded opinion piece published online Wednesday, Christyn Cianfarani, executive director of the Canadian Association of Defence and Security Industries, said that Canada — unlike its allies — has not put in place a framework to ramp up production to meet the demand triggered by the Russian invasion of Ukraine.

Instead, Cianfarani wrote, the industry has heard “vague pleas” from the Liberal government “for companies to get with the program,” without any clear sense of which items of equipment are needed and what the long-term expectations might be.

“Canadian defence companies can and would step up if they knew exactly what, and how much, to step up with,” she wrote.

In an interview with CBC News last summer, Defence Minister Anita Anand described the enlistment of weapons manufacturers in the struggle to save Ukraine as a “moral imperative.” Gen. Wayne Eyre, the country’s top military commander, also publicly urged the defence industry to get on a “war footing” in response to the crisis.

“No one in industry has a clue what government will require from companies to achieve that end, or even what ‘wartime footing’ means to government in the modern context,” wrote Cianfarani, adding that the last time the country’s defence industry was on a war footing was during the Second World War.

“No firm will take vague exhortations to ‘increase their production lines’ seriously without meaningful and systematic commitment from the government. No respectable CEO is going to take the risk of ordering tens of millions of dollars worth of parts to then see them sitting on a shelf awaiting integration, while simultaneously telling investors to trust them that a buyer will materialize in this highly managed protectionist market.”

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