(Welcome to the Entertainment Strategy Guy, a newsletter on the entertainment industry and business strategy. I write a weekly Streaming Ratings Report and a bi-weekly strategy column, along with occasional deep dives into other topics, like today’s article. Please subscribe.)
Today’s article is free for all to read.)
What’s my goal with this newsletter? I’d argue that it’s this:
To turn down the volume.
Sometimes, a trend gets hyped to, frankly, 11…
…and I want to turn that volume down to what’s actually true. In today’s social-media-fueled news cycles, herding around given narratives happens faster and at a greater velocity than ever before. (I might write more about this, but to be clear, the “wisdom of the crowds” effect does NOT work when everyone has to guess at something in public. Often, the “crowd” then herds are the first guess or the person or two who argued loudest.) Even in our little niche—entertainment industry/entertainment business strategy—trends get hyped well beyond what the actual data supports.
I want to arm you, the educated and savvy reader, with tools to spot overhyped media trends. Today is one such example. A tool to cut through the “BS, hype and puffery” you encounter roughly five times a day reading about the entertainment industry. (Or nowadays, any industry from finance to tech to social media to Hollywood.)
Introducing…The Taylor Swift Data Fallacy.
(As I just wrote, this article is free for all. But it can only be done with the support of my paid subscribers. If you want that article on social video, please subscribe. Thank you.)
The Taylor Swift: Eras Tour Phenomenon
If you can remember all the way back to 2023, Taylor Swift—as a reminder, the best-selling musician of our generation, whose concert tour had just smashed global records—put a concert film in theaters. It did well. See!!!
Those were great numbers for a concert film. Then…everyone lost their minds.
Plenty of pundits speculated that we had discovered a new genre of film for theaters. One analysis I read argued that theaters could possibly generate $1 billion in new revenue a year from this new genre alone. Even if news articles didn’t put out numbers, the point of the hype was to imply, “Is this a huge new genre in the making?” Then other pundits amplified what other pundits said. News outlets, too.
“Concert films would save theaters!” they argued. Including the CEO of AMC.
Was this a new genre? Had we discovered a savior for theaters?
No. Later that year, Beyoncé’s concert film did a multiple less revenue than Taylor Swift: The Eras Tour, only $34 million in the US and $44 million globally. And Beyoncé is arguably the second biggest pop star in America! By the next year, Olivia Rodrigo’s concert film didn’t even chart on Netflix. We haven’t really seen a concert film since then…
This was the “Taylor Swift Data Fallacy” at work. We assumed that Taylor Swift represented some new “average” when she was the ceiling for this genre. What matters is why.
The Taylor Swift Data Fallacy…Defined
So what is this data fallacy specifically?
The Taylor Swift Data Fallacy: When the most popular celebrity, creator or piece of IP in one genre or medium switches to a new genre or medium, and then their work succeeds. It represents the ceiling of that transition, while most folks assume it is the average.
I’ll provide examples shortly, but first, let me quickly explain the data behind this.
Why? Logarithmic Distribution of Returns (Or Power Laws)
What drives this phenomenon? The unequal distribution of returns in the entertainment industry. I’ve variously called this:
- Logarithmic distribution of returns
- Power laws
- Winner takes all (though that isn’t quite right).
As I wrote early on in this website’s history, some things perform multiples better than everything else. When something hits in Hollywood, it can do orders of magnitude (meaning 10x) better than everything else. Think Avatar: The Way of Water; it made billions, while hundreds of films make under $1 million every year. Or look at Taylor Swift, racking up billions of streams on Spotify, while according to Luminate, 42% of new tracks on streaming get less than 10 streams.
(By the way, other folks have written about this too, including most recently friend of the newsletter, Doug Shapiro.)
When you combine power laws with “pre-existing” IP in one domain traveling to another, we see the same impacts.
When the tippity top of one domain (say music or video games or YouTube)…
…travels to another domain…
…the result is power laws in success!!
But everything else, almost by definition, will be multiples smaller.
Examples of the “Taylor Swift Data Fallacy” at Work
Ah, Mr. Entertainment Strategy Guy, if that is your real name—it isn’t—Taylor Swift is just one example. Bet you can’t find any others!
So again, we’re looking for “IP” or talent popular in one domain switching to another. Off the top of my head.
- YouTube creators going to streaming, specifically MrBeast and Beast Games. Since MrBeast is the undisputed top creator on YouTube—he has 439 million subscribers—any other creators (who are also multiples less popular) who migrate from YouTube to streaming will see results that are multiples smaller than his already average viewership. Indeed, this is why most creators who have gone to streaming have missed the charts entirely. For example, Charli D’Amelio’s show on Hulu (the largest TikToker in the world), Call Her Alex on Hulu (she keeps getting headlines saying she’s building an “empire”), Prime Video’s Overcompensating starring Benito Skinner, HBO Max’s Paul American starring Jake and Logan Paul, and Pop the Balloon Live! on Netflix. (I covered six of these in my most recent compilation of streaming TV show flops in the first half of the year.)
- Sports: NFL in the US; Soccer elsewhere. If you make something about the NFL in America, it will be popular. That’s why Netflix’s top sports docu-series in America are all the NFL—Quarterback, Receiver, America’s Sweethearts: Dallas Cowboys Cheerleaders, etc—and other sports docu-series struggle.
- Broadway shows coming to film. Hamilton is by some metrics the most popular musical of the 21st century. If it’s not, then Wicked is. Take your pick. As such, their films did tremendously well on streaming and in theaters. Everything else will, again, likely do multiples less business. And we’ve seen that before; I wrote an entire article for The Ankler on this genre underperforming, including Diana: The Musical, In The Heights, Come From Away, Annette and Tick, Tock…Boom.
- Video game movies. Mario is the most popular character in the history of video games; Minecraft is arguably the most popular game right now. Their movies did gangbusters at the box office. Will the other video game franchises made in their wake succeed as much? Some will, some won’t, but it might be hard to hit these ceilings of those other two franchises.
- Fantasy TV shows and movies. In the 2000s, we saw The Lord of the Rings, Harry Potter and Game of Thrones conquer TV and film. But those are arguably three of the top five or ten big fantasy book series of all time, especially LoTR and HP. And that’s why so much else—like Prime Video’s The Wheel of Time and My Lady Jane to The Shannara Chronicles to Netflix’s The Sandman to Apple TV+’s See—has underperformed.
- DC/Marvel superheroes. The Marvel movies started with their most iconic and popular characters (Spider-Man, X-Men, and Wolverine, then the Avengers) and then started pulling up B-tier characters. Those latter characters have drastically underperformed.
Mistaking “Ceilings” for Averages and Hit Rates
As I wrote the above examples, a few other ideas popped to mind, but they actually represent different data problems…
- Squid Game: Mistaking ceiling for hit rate. When Squid Game blew up the world, I read an absolute deluge of articles predicting that Americans would now embrace foreign language content. And yet, since Squid Game, the biggest foreign-language TV show is still…Squid Game. And nothing else has come close. In this case, a lot of pundits assumed a bit hit like Squid Game would mean the hit rate for foreign shows in the US would increase, and it hasn’t.
- Horror Hits: Mistaking ROI for ceiling. Every year, the horror genre delivers a huge horror hit or two. Think of Get Out and It. Or Sinners this year. Often, though, the coverage treats horror films—a genre with a very good hit rate that generates strong returns on investment—as if those hits rival the ceilings of other genres, a point I’ve made twice before.
- KPop Demon Hunters: Small sample sizes and learning lessons from outliers. One issue with huge hits is that they’re, by definition, rare. So learning lessons from them is pretty tough, because, again by definition, you’re extrapolating from a small sample size. Emily Horgan wrote an excellent piece on this recently regarding KPop Demon Hunters. (My personal takeaway? Focus on great songs, because several of the uber successful animated films—Frozen, Encanto, Frozen II—had great songs.)
Oh, By The Way…
There is one other genre that may have just set records and is a perfect example of “The Taylor Swift Data Fallacy” at work. Can you guess what it is? I’ll give you a hint: it came out in theaters two weeks ago.
That genre is worth its own deep dive in its own article. And you’ll see that soon.
