This year’s top video on YouTube has been Gangnam Style, a South Korean song which has taken the world by storm. And as happens with anything that becomes successful people have started to look for reasons behind its success. The song has been labeled the crossover from the East to the West something that took actor Jackie Chan three decades to achieve.
One article looking into the success of the song pointed out “Yet, its rise to universality is no fluke. Its success occurs when the world is shifting in radical ways, at a time when individuals, empowered by the information technology, can change world history”.
The problem with this argument is that the same information technology was available to other songs and artists. Take the case of the home grown Kolaveri Di which took India by storm early this year. Like Gangnam Style the song had been put up on YouTube and it was trending within days of its upload. But its popularity never spread beyond India and Indians. How do you explain that? If information technology was the only criteria then Kolaveri Di should have been as big a hit as Gangnam Style, perhaps even bigger given that a sufficient number of Indians live in all corners of the globe.
So what is happening here? As Paul Ormerod explains in his new book Positive Linking – How Networks Can Revolutionise the World “As usual, we could in principle always tell a story after the event which purports to the account for the much further greater popularity of one video compared to another.” What this basically means is that it is easy to rationalise success by spinning a story around it once it has happened. But that doesn’t mean that those were the reasons for the success. Like the success of Kolaveri Di was attributed to its KISS (keep it simple stupid) strategy.
But the point is if identifying success was so easy we would all be doing it. Michael Mauboussin has a very interesting example in his soon to be released book The Success Equation – Untangling Skill and Luck in Business, Sports and Investing. Llyod Braun, Chairman of ABC Entertainment Group had proposed a show called Lost. It was a cross between Cast Away, a movie that featured Tom Hanks stranded on a desert island, and Survivor, a reality TV show about contestants who compete with one another in the wilderness and then vote to remove members until only one person is left. “Michael Eisner, the CEO of Disney…heard the pitch and rated Loss a 2 on a scale of 1 to 10, 1 being the worst…Eisner later called the show “terrible”…Despite Eisner’s dim view of the show Lost was a smash success…Lost ran for six reasons and improved ABC’s slumping ratings and profits,” writes Mauboussin. The irony was that Braun who had proposed the show had already been fired by then.
So the history of cultural markets is full of such examples which were written off. As Duncan J Watts writes in Everything is Obvious – Once You Know the Answer “The history of cultural markets is crowded with examples of future blockbusters – Elvis, Star Wars, Seinfeld . Harry Potter, American Idol – that publishers and movie studios left for read while simultaneously betting big on total failures.”
Another great example is Slumdog Millionaire which almost did not release and went to DVD straight away. The film went onto to win eight Oscar awards. The Hangover was another such hit. Made at a low budget of $35million, the movie went onto earn close to $468million. Closer to home critics wrote of Sholay as dead ember and Hum Aapke Hain Koun as an extended wedding video. We all know what happened there. And since then scores of Hindi movies which are versions of these two movies have been made.
JK Rowling’s Harry Potter and the Philosopher’s Stone was rejected by 12 publishers till Bloomsbury agreed to publish it. The first print run of the book was 1000 copies. Once the book was a super-hit it was deemed as a phenomenon waiting to happen. Michael Maouboussin explains this tendency in a research paper titled Was Harry Potter Inevitable? “Our society often associates success with quality. In a fiercely competitive market, the thinking goes, only the best products rise to the surface. Once a product is a hit, whether a blockbuster movie or a bestselling book, we readily point to the attributes that make it so appealing,” he writes.
Maouboussin gives a more detailed explanation for the phenomenon in his new book. “If you are like me, you have a hard time accepting that there isn’t just a little special about The Da Vinci Code, Titanic, or the Mona Lisa. The very fact that they are so wildly popular seems to be all the evidence you need to conclude that they have some special qualities that makes them stand above all the rest. But all three were surprises. Our minds are expert at wiping out surprises and creating order, and order dictates that these products are special.”
Hence, the reasons highlighted have nothing to do with the success, typically. People like the product (be it a book, a song or a movie) initially and once the product becomes slightly popular they tend to become more popular because they are popular. This is referred to as the Matthew Effect after a verse in the Gospel of Matthew “For whosever hath, to him shall be given, and he shall have more abundance.”
But that clearly doesn’t stop people from coming up with more and more explanations for success. As Watt puts it “In the end, the only honest explanation may be the one given by the publisher of Lynne Truss’s surprise bestseller, Eats, Shoots and Leaves, who, when asked to explain its success, replied that “it sold because lots of people bought it.” Similarly Gangnam Style worked because a lot of people heard it. Its success was a total ‘fluke’.
The article originally appeared in the Daily News and Analysis dated October 22, 2012. http://www.dnaindia.com/money/report_whys-the-world-going-gaga-over-gangnam-style_1754813
(Vivek Kaul is a writer and he can be reached at [email protected])
I haven’t seen a Salman Khan movie in a cinema hall in more than 17 years now. The last time was when I saw Hum Aapke Hain Koun for the twelfth and the last time, at the Sujata cinema in Ranchi, sometime in February 1995. The movie was running in its record twenty seventh week. And as many of you would agree Hum Aapke Hain Koun was more of a Madhuri Dixit movie than a Salman Khan one.
Those were days when movies ran for prolonged periods and the 3200 print release that Salman Khan’s most recent release Ek Tha Tiger had, were unheard of. Money was made over a period of time and not in the first three-four days of release.
Given that, if the people did not like the movie over the first three four days of its release the chances of the movie doing well were rather low. Unlike these days when the marketing blitzkrieg that accompanies a big release is so huge that most people are tempted to watch the movie over the first weekend of its release, and before they realize that they have ended up watching a lousy movie, the producer has made his money. What nobody really tells you is that how much money all these superhit movies make on the “fifth” day after their release?
This strategy also requires a large number of prints of the movie being released to ensure that everyone and anyone who wants to see the movie gets to watch it. Hence the days when house-full boards were put up in front of cinema-halls are long gone.
Getting back to where we started. Salman Khan has attained a superstar status in Hindi cinema over the last few years. His movies have constantly done a business of over Rs 100 crore. Movies like Wanted, Ready and Bodyguard which were remakes of hit movies from down south, were superhits in Hindi as well.
But the movies of Salman Khan have never found favour with serious film critics (leaving out the ones who run film trade journals and have other incentives at work ).
So I was rather surprised when Salman’s latest release Ek Tha Tiger got reasonably good reviews in most of the mainstream media. This got me interested and I decided to break my rule of not spending money on a Salman Khan movie and go check out the movie at the nearest multiplex.
Half way through Ek Tha Tiger I had a throbbing headache. It was similar to the one I had got when I was forced to watch Ready (or was it Bodyguard?) on television with a young cousin. The movie does have a few things going for it. The foreign locales in ETT (as diehard fans of Salman like to call it) are new. Indian cinema goers have never seen movies shot in Turkey, Cuba and Ireland, before this. Also Katrina Kaif has acted better than the dumb blonde she portrays well in most of her other movies. The supporting cast has acted well.
But on the whole the movie is a little better than the mindless crap offered by Salman’s earlier releases like Ready, Bodyguard, Wanted etc. So the question is why had so many film reviewers gone around giving it the kind of good reviews that they had?
They had become victims of what behavioural economists call the ‘contrast effect’. We all tend to compare things before making a decision. Given this, the attraction of an option can be increased significantly by comparing it to a similar, but worse alternative. This is known as the ‘contrast effect’.
Let’s understand this through an example. Real estate agents who help put out homes on rent, use the contrast effect very well. The way it has worked with me whenever I have tried to look for a rented accommodation is somewhat like this.
The agent first takes me around and shows me a couple of apartments which are not in the best of condition. While coming out of these places, seeing my displeasure, the agent typically says that the apartment I showed you wasn’t really great.
“So why did you show it to me?” I normally question him, after we are out of the apartment. In such cases I get stock replies like, “Oh this place came to me only today morning. I hadn’t checked it out before, I wouldn’t have shown it to you otherwise,” or “I am just trying to figure out what kind of place you really want.”
This is where part-one of the act ends. Then the agent shows a place which is slightly better than the few run down places he had shown to me a little earlier. But the difference is that the rent in this case is significantly higher.
This is the “contrast effect” at work. The attractiveness of the apartment shown later is increased significantly by showing a few “run down” apartments earlier. The critics who reviewed Ek Tha Tiger had fallen victims to the same “contrast effect”. They had found the earlier movies of Salman Khan so lousy that in comparison a slightly better Ek Tha Tiger was felt to be much better.
The contrast effect has been put to great use by retailers as well to increase the attractiveness of certain products. A 1992 research paper written by Itamar Simonson and Amos Tversky, shows this through an example of a retailer who was selling a bread making machine. The machine was priced at $275. In the days to come the company also started selling a similar but larger bread making machine. The sales of this new machine were very low. But a very interesting thing happened. The sales of the $275 machine more or less doubled. As an article on the website of the Harvard Law School points out “Apparently, the $275 model didn’t seem like a bargain until it was sitting next to the $429 model.” (you can read the complete article here)
This is a trick used by retailers all over the world to great effect. By displaying two largely similar but differently priced products, the sales of the product with the lower price can be increased significantly by making it look like a bargain.
The contrast effect can also be put to use while making financial negotiations, like in the case of a job offer. In this case it makes sense to start with asking for more than you expect realistically. “The contrast effect suggests a strategic move: ask for more than you realistically expect, accept rejection, and then shade your offer downward. Your counterpart in the financial negotiations is likely to find a reasonable offer even more appealing after rejecting an offer that’s out of the question,” points the Havard Law School article points out.
Another area where contrast effect is used to great effect is while selling a fraudulent financial scheme which is basically a Ponzi scheme. In 1919, Charles Ponzi, an Italian immigrant to the United States of America (US), promised to double the money of investors who invested in his scheme in 90 days.
The news spread quickly. Money started pouring in as no other investments in the market at that point of time, promised such high returns, in such a short span of time. At its peak, the scheme had 40,000 investors who had invested around $ 15 million in the scheme. Meanwhile, Ponzi had started living an extravagant life blowing up the money investors brought in.
On Aug 10th, 1920, the scheme collapsed. The auditors, the newspapers and the banks declared that Ponzi was definitely bankrupt. It was revealed that money brought in by the new investors was used to pay off old investors. Thus an illusion of a successful investment scheme was created.
Charles Ponzi was not the last guy to run a fraudulent Ponzi scheme. Such Ponzi schemes have continued since then and keep cropping up all the time.
The contrast effect is at play when investors decide to invest in a Ponzi scheme. It becomes relevant in the context of a Ponzi Scheme when the prospective investor starts comparing the returns on the various schemes available in the market for investment at that point of time to the returns being promised by the Ponzi scheme. The high returns of the Ponzi Scheme stand out clearly and attract gullible investors.
So film reviewers are not the only “victims” of the contrast effect. It is at work in various facets of our “financial” lives as well. There was another big learning for me from the Ek Tha Tiger experiment. The next time I convince myself to watch a Salman Khan movie at a multiplex the least I could do is watch the morning show and not waste much money in the process.
The article originally appeared on www.firstpost.com on August 20,2012. http://www.firstpost.com/bollywood/lessons-from-ek-tha-tiger-even-if-you-arent-a-salman-fan-423669.html
(Vivek Kaul is a writer and can be reached at [email protected]. He is not a Shahrukh Khan fan)