I enjoy watching established players in industries that have exhibited decades of abusive behavior toward independent artists and consumers get stomped on by the new Internet economy. It's not that I necessarily think that in the end Amazon and Netflix will treat creators or consumers any better than Hollywood, though they might, it's hard to know yet. But, I think seeing the movie industry and the music industry (in particular, the music industry) kicked in the damned teeth until they cry for mercy is downright hilarious.
Hollywood thinks they have money and power...until an Apple, or Google, or Amazon comes along and shows them what real economic clout looks like. Again, it may not end up better for creative folks or consumers, but it sure is funny while it's shaking out.
> Hollywood thinks they have money and power...until an Apple, or Google, or Amazon comes along and shows them what real economic clout looks like.
Something I read once stuck with me. I don't remember the exact wording, but basically the movie industry's entire market, soup to nuts, is an order of magnitude less than just one of Disney's physical goods departments.
An entire industry's market doesn't even hold a candle to one company's department. Hollywood is stranger than you could ever know. It makes a pitiful amount of money in relation to global capitalism, always has, always will. But it wields outsized influence on American policymaking regardless.
Another quote comes to mind. When Apple released the Watch, someone asked one of the top watch companies if they were worried about Apple butting into their market. He just smiled and said something to the effect of, "Call me when they can figure out how to get men to wear diamonds on anything other than a watch."
Established industries have spent long, long periods of time getting to know their customer. More often than not, they can take any upstart's best efforts and treat it as outsourced R&D. Netflix and Apple can succeed to their hearts content and still not have a prayer of unseating Hollywood.
I don't think luxury goods are at all a useful comparison to the various entertainment industries. I would argue entertainment is far closer to what Google/Amazon/Netflix/Apple are doing than it is to what jewelry makers are doing.
And, I think it's too early to tell what'll happen to luxury watch makers. I think that cockiness is not well-founded. I'd be willing to bet that in a few more years, those traditional watches will be as common as cuff links. They'll still exist, but they won't be considered a standard part of people's every day wear, even people who buy and wear luxury goods.
I do agree with you, however, that Hollywood and the entertainment industry wield way more political power than the size of their industry would indicate. They're good at lobbying, and they have a few friends in very high places (like Disney) to fight their battles for them, such as copyright terms, for example.
> I'd be willing to bet that in a few more years, those traditional watches will be as common as cuff links.
I'm not sure where you're getting this from. Traditional watches have seen way more potential challengers than just the Apple Watch, and managed to survive nonetheless. You can think "yeah, but this time it's different," but try to think of it from the point of view of somebody whose been making and selling watches to people his whole life in an industry that's been making and selling watches for hundreds of years, as part of a company that's probably been around for at least a hundred years itself. These guys know a thing or two about why people buy watches.
But, try to think of it from the point of view of somebody who's been making and selling wagon wheels to people his whole life in an industry that's been making and selling wagon wheels for hundreds of years, as part of a company that's probably been around for at least a hundred years itself. These guys know a thing or two about why people buy wagon wheels.
You're completely not getting why technology is different from luxury. Wagon wheels are not and never were a luxury product. People bought them for completely different reasons.
>cuff links, boned corsets, pocket watches, cravats, wigs
>They will disappear, except for hipsters and old people, within a generation.
The items you mentioned fell out of fashion, so I believe his point still stands. It seems to me, watch makers aren't concerned about smart watches from a utilitarian point of view, but from a fashion point of view (After all most people stopped wearing watches once you could get the time on your phone).
Likewise, if it was just the case that watches simply had to have more functions to upend the market, smartphones would have eradicated traditional watches by now.
Whether or not they are underestimating Apple's ability to create a fashionable digital time piece is one thing, but it looks like watch makers understand that their customers aren't buying their products in order to measure their heart rate (or even check the time).
You don't wear a breitling to tell time. You wear it to tell everyone else that you have money, power and self-confidence. It's essentially jewellery for men. That hasn't gone out of fashion for thousands of years. Pretty sure it never will, either.
Any aspirational luxury good does that to an extent. I suppose it's all about how people see you and treat you when you wear expensive clothes and Breitlings.
The biggest risk to traditional watchmakers isn't the Apple Watch per se, it's the wealth created by the whole tech ecosystem.
Luxury good makers have spent decades getting to know their customers, who are largely wealthy, cultured individuals. It is unlikely those individuals will suddenly switch their preferences to the Apple Watch. It is more likely that those individuals will no longer be wealthy. Over the last 15 years, we've seen a level of wealth instability that's been unprecedented since the Gilded Age, with whole industries disappearing and new fortunes being made.
I don't see the nouveau rich being a big fan of traditional Swiss watches. Most of the millionaires/billionaires I know tend to own Pebbles, actually.
The old rich has way more to fear from political upheaval in their home countries than from American tech wealth. There's way way way more old money than there is new. When you look at the grand scheme of things. American tech is tiny. I would not be surprised at all to hear of rich people who've never even heard of Apple.
Total domestic Hollywood box office for 2015 was ~10 billion[0]. Total 2015 revenue for Disney was ~52 billion[1]. Whatever you read, it is no longer correct.
I'm not sure why you think a department in a company with 52 billion in revenue can't individually have more revenue than an industry with 10 billion in revenue. Specifically, numbers posted seem to indicate there are some divisions with more than 10 billion in revenue[1].
You're not making an abstract point, you're making a minor and pedantic point. The comment said he didn't remember the exact details.
His core idea is true even if he got the details wrong: that whole-industry revenue from movies is much smaller than Disney's overall business. That's an interesting insight.
Your comment might be more useful if you acknowledged his core idea even as you corrected the facts. Instead you appear to be in such a rush to prove you're smart that you totally missed the central point. Just sayin.
Ah, I thought you were responding to this: "An entire industry's market doesn't even hold a candle to one company's department." I missed the order of magnitude statement.
On watches, I'd say when you have low cost smartwatches (like what happened with phones), then things might change. Watches might become relegated to being statements for the fashion conscious.
> Watches might become relegated to being statements for the fashion conscious.
When have they ever not been? The watch, even back in it's heyday as something you carried around in your pocket, has always been a status-first, function-second fashion accessory. It has always been much, much cheaper to use the established methods of telling time, most villages first infrastructure investment was a town clock, once those became cost-effective to build.
It has only been very recently where it became fashionable for everyone to wear one, and that's only because of cheap electronic watches. Cheap electronic watches had the inevitable effect of whetting appetite for luxury options. Casio was the best thing that ever happened to luxury watch makers.
People upgrading from Casio to Apple are of no concern to higher-end makers like Patek Philippe. Swatch is not a premium watch maker. What Patek and the like might be worried about is people moving from Patek to Apple.
But when you start to think more carefully about that scenario, it's rather ridiculous. People into watches don't just buy one. You don't "switch" brands, you just select a different one for your next purchase. It could be another Patek, perhaps an Audemars Piguet, or even an Apple Watch.
The idea that someone buying these watches would sell them all and buy an Apple Watch, never to own another high-end watch again, is simply absurd.
"People into watches don't just buy one. You don't "switch" brands, you just select a different one for your next purchase. It could be another Patek, perhaps an Audemars Piguet, or even an Apple Watch."
You're talking about collectors. They already do not represent a significant portion of the current market for high end watches. Sure, wealthy people who like watches probably have one or two "nice" watches. But, people who collect things will never be the majority of a mass market consumer good. There are car collectors with classic cars, that won't save internal combustion engines. There are people who collect old computers, too, but no one is seriously suggesting the Commodore 64 will ever be a mass market product again. People collect dolls, but Barbie doesn't make their millions from sales to collectors; they make their millions from the mass market.
So, you're arguing there will always be classic watch collectors. No problem. I'm sure there will be. Hell, there are still people that knit their own sweaters. Watch collectors will not be common, and they will not represent a multi-billion dollar market.
No, I'm not. I'm talking about people that buy high-end watches. They're like ties, it doesn't really make sense to own just one. You need one for every occasion, to match all the types of outfits you wear.
It makes sense for you to own just one high-end watch. But the kind of person that can pay $30K for a watch is not you. They are the people that keep Patek Phillipe in business. They made €765.6 million in 2013. The Swiss watch industry as a whole is around $10 billion.
I never said it wasn't. The theme is small, entrenched industries that seem way bigger than they are. Hollywood seems so much bigger than it is because geopolitically, US culture exports are a big contributor to global goodwill.
The watch industry is sheltered by old, old money, patronized by the kind of people who could comfortably buy up the entire industry if they saw the need.
Market logic is a useful thing to grasp, but there are bigger things in the world than markets, and it's really useful to be able to understand how they work. What looks small often isn't. Bigger, better, faster, stronger are not the only rules the world lives by. There exist points at which normal logic upends and irrationality rules.
I wonder how we ended up talking so much about luxury watches in this conversation about Hollywood and the tech industry. I still don't think there's a useful comparison to be made, even if we assume that luxury watches are immune to the same sorts of factors that made fancy hats and canes disappear. It's an impossibly large leap for me to treat Hollywood movies and entertainment as a "luxury good"; there's simply none of the same motivations behind it. It really isn't a status symbol to own a copy of the Criterion Collection on Blu Ray.
Well aware that swatch is not premium. They are however higher end when compared to Casio. Market have different segments. Timex and Casio make up 30% of the market. ~50% of buyers care about value and another 30% care about watches as a symbol. Swatch falls in that 50%. That's a big market segment. That's where smartwatches compete.
"... Last year, when consultants from Deloitte surveyed Swiss watch executives, eighty per cent of them indicated that demand was down “due to anti-corruption legislation” in China."
Honestly, it's why I as a POC dislike Hollywood and a lot of Westernized popular media in general. We tend to be under-represented and stereotyped, which can have a subconscious effect on the masses.
It's interesting to think about this, as what it really means is that Hollywood is basically advertising for physical sales.
Transformers the show was produced to sell Transformers the toys. The toys came first.
So will Amazon only pick up shows that encourage people to buy more stuff? They'll have big data to back up what types of content actually encourage that. Similarly, when will Netflix get into physical sales? Options like buy 'that thing' you just saw in 'that show', etc.
Dude, most most shows and movies are already in the product-placement business. Bond movies are feature-long multi-ads. Sitcoms live on beer shots. Any sf/fantasy feature post-StarWars gets made by selling merchandise contracts before production even starts.
I don't think Amazon or Netflix will change anything there, it has been a reality for more than 20 years now.
Sure. It's the original TV soap model. I guess what's more interesting in this context is the potential that Amazon and/or Netflix have in directly mapping shows to sales.
It shows exactly this, but also states that physical sales in turn become ads for their movies. Literal quote: "Music: keeps films in mind when they're out of circulation." Let It Go must be a gold mine: content for the movie, a top 10 hit song, and an ad for Frozen DVDs & toys every time a little kid annoyingly runs around singing it.
Hollywood has an outsized effect on American policy making because American soft power is partly reliant on the export of American, or America-friendly culture, which is what Hollywood does.
> and still not have a prayer of unseating Hollywood.
That's true, but by the same token television has failed to unseat Hollywood -- millions of people still go to the movies every year. And yet I wouldn't quite describe motion pictures as having 'won'.
Established industries have spent long, long periods of time getting to know their customer
.. and then forgetting about it while wringing the customer for all they are worth. Or failing to notice that their customers are aging and not being replaced by new customers with different tastes.
Perhaps you meant to say "it may not end up better for the creative films, the consumers, the indie cinemas or streaming sites, but it sure is funny while it's shaking out".
That said, I've no idea whether Netflix is buying/wants to buy the rights to so much that it actually might bother sites like Mubi (where I work, FWIW) or Fandor. Somehow I doubt it.
Netflix and Amazon are doing what Murdoch did in the 90's when he massively outbid CBS (by over $100 million/year) to get the NFL on FOX: he wasn't just buying football games, he was buying a ticket to the big time network business and simultaneously shutting doors for other fledgling channels from Warners and Paramount that were following FOX's path.
48 comments
[ 2.5 ms ] story [ 113 ms ] threadHollywood thinks they have money and power...until an Apple, or Google, or Amazon comes along and shows them what real economic clout looks like. Again, it may not end up better for creative folks or consumers, but it sure is funny while it's shaking out.
Something I read once stuck with me. I don't remember the exact wording, but basically the movie industry's entire market, soup to nuts, is an order of magnitude less than just one of Disney's physical goods departments.
An entire industry's market doesn't even hold a candle to one company's department. Hollywood is stranger than you could ever know. It makes a pitiful amount of money in relation to global capitalism, always has, always will. But it wields outsized influence on American policymaking regardless.
Another quote comes to mind. When Apple released the Watch, someone asked one of the top watch companies if they were worried about Apple butting into their market. He just smiled and said something to the effect of, "Call me when they can figure out how to get men to wear diamonds on anything other than a watch."
Established industries have spent long, long periods of time getting to know their customer. More often than not, they can take any upstart's best efforts and treat it as outsourced R&D. Netflix and Apple can succeed to their hearts content and still not have a prayer of unseating Hollywood.
And, I think it's too early to tell what'll happen to luxury watch makers. I think that cockiness is not well-founded. I'd be willing to bet that in a few more years, those traditional watches will be as common as cuff links. They'll still exist, but they won't be considered a standard part of people's every day wear, even people who buy and wear luxury goods.
I do agree with you, however, that Hollywood and the entertainment industry wield way more political power than the size of their industry would indicate. They're good at lobbying, and they have a few friends in very high places (like Disney) to fight their battles for them, such as copyright terms, for example.
I'm not sure where you're getting this from. Traditional watches have seen way more potential challengers than just the Apple Watch, and managed to survive nonetheless. You can think "yeah, but this time it's different," but try to think of it from the point of view of somebody whose been making and selling watches to people his whole life in an industry that's been making and selling watches for hundreds of years, as part of a company that's probably been around for at least a hundred years itself. These guys know a thing or two about why people buy watches.
Sometimes, things change.
Traditional watches have had their run. They will disappear, except for hipsters and old people, within a generation.
The items you mentioned fell out of fashion, so I believe his point still stands. It seems to me, watch makers aren't concerned about smart watches from a utilitarian point of view, but from a fashion point of view (After all most people stopped wearing watches once you could get the time on your phone).
Likewise, if it was just the case that watches simply had to have more functions to upend the market, smartphones would have eradicated traditional watches by now.
Whether or not they are underestimating Apple's ability to create a fashionable digital time piece is one thing, but it looks like watch makers understand that their customers aren't buying their products in order to measure their heart rate (or even check the time).
Luxury good makers have spent decades getting to know their customers, who are largely wealthy, cultured individuals. It is unlikely those individuals will suddenly switch their preferences to the Apple Watch. It is more likely that those individuals will no longer be wealthy. Over the last 15 years, we've seen a level of wealth instability that's been unprecedented since the Gilded Age, with whole industries disappearing and new fortunes being made.
I don't see the nouveau rich being a big fan of traditional Swiss watches. Most of the millionaires/billionaires I know tend to own Pebbles, actually.
[0] http://www.boxofficemojo.com/yearly/chart/?yr=2015
[1] http://www.statista.com/statistics/224397/quarterly-revenue-...
1: http://www.bloomberg.com/news/articles/2015-08-04/disney-pro...
His core idea is true even if he got the details wrong: that whole-industry revenue from movies is much smaller than Disney's overall business. That's an interesting insight.
Your comment might be more useful if you acknowledged his core idea even as you corrected the facts. Instead you appear to be in such a rush to prove you're smart that you totally missed the central point. Just sayin.
When have they ever not been? The watch, even back in it's heyday as something you carried around in your pocket, has always been a status-first, function-second fashion accessory. It has always been much, much cheaper to use the established methods of telling time, most villages first infrastructure investment was a town clock, once those became cost-effective to build.
It has only been very recently where it became fashionable for everyone to wear one, and that's only because of cheap electronic watches. Cheap electronic watches had the inevitable effect of whetting appetite for luxury options. Casio was the best thing that ever happened to luxury watch makers.
No clue why Europe is the only relevant market you're referencing here. Either way no clue what the market size for town clocks was.
But when you start to think more carefully about that scenario, it's rather ridiculous. People into watches don't just buy one. You don't "switch" brands, you just select a different one for your next purchase. It could be another Patek, perhaps an Audemars Piguet, or even an Apple Watch.
The idea that someone buying these watches would sell them all and buy an Apple Watch, never to own another high-end watch again, is simply absurd.
You're talking about collectors. They already do not represent a significant portion of the current market for high end watches. Sure, wealthy people who like watches probably have one or two "nice" watches. But, people who collect things will never be the majority of a mass market consumer good. There are car collectors with classic cars, that won't save internal combustion engines. There are people who collect old computers, too, but no one is seriously suggesting the Commodore 64 will ever be a mass market product again. People collect dolls, but Barbie doesn't make their millions from sales to collectors; they make their millions from the mass market.
So, you're arguing there will always be classic watch collectors. No problem. I'm sure there will be. Hell, there are still people that knit their own sweaters. Watch collectors will not be common, and they will not represent a multi-billion dollar market.
No, I'm not. I'm talking about people that buy high-end watches. They're like ties, it doesn't really make sense to own just one. You need one for every occasion, to match all the types of outfits you wear.
It makes sense for you to own just one high-end watch. But the kind of person that can pay $30K for a watch is not you. They are the people that keep Patek Phillipe in business. They made €765.6 million in 2013. The Swiss watch industry as a whole is around $10 billion.
The watch industry is sheltered by old, old money, patronized by the kind of people who could comfortably buy up the entire industry if they saw the need.
Market logic is a useful thing to grasp, but there are bigger things in the world than markets, and it's really useful to be able to understand how they work. What looks small often isn't. Bigger, better, faster, stronger are not the only rules the world lives by. There exist points at which normal logic upends and irrationality rules.
source - http://www.newyorker.com/news/daily-comment/the-kleptocrat-i...
Transformers the show was produced to sell Transformers the toys. The toys came first.
So will Amazon only pick up shows that encourage people to buy more stuff? They'll have big data to back up what types of content actually encourage that. Similarly, when will Netflix get into physical sales? Options like buy 'that thing' you just saw in 'that show', etc.
I don't think Amazon or Netflix will change anything there, it has been a reality for more than 20 years now.
https://hbr.org/2013/05/what-makes-a-good-corporate-st
It shows exactly this, but also states that physical sales in turn become ads for their movies. Literal quote: "Music: keeps films in mind when they're out of circulation." Let It Go must be a gold mine: content for the movie, a top 10 hit song, and an ad for Frozen DVDs & toys every time a little kid annoyingly runs around singing it.
That's true, but by the same token television has failed to unseat Hollywood -- millions of people still go to the movies every year. And yet I wouldn't quite describe motion pictures as having 'won'.
.. and then forgetting about it while wringing the customer for all they are worth. Or failing to notice that their customers are aging and not being replaced by new customers with different tastes.
That said, I've no idea whether Netflix is buying/wants to buy the rights to so much that it actually might bother sites like Mubi (where I work, FWIW) or Fandor. Somehow I doubt it.