Tag Archives: Business

Deadliest Killer in the Home? Stairs

Stairing death in the face

One of the big themes of John Lanchester’s Whoops is that people are terrible at understanding risk, but that modern economic theory does not account for this (amongst a number of other basic psychological basics).

He illustrates our crude understanding of risk by pointing out that stairs kill around six hundred deaths every year. That’s roughly the same as the number of murders every year. And yet no-one feels particularly scared of stairs.

It’s a chance for Lanchester to indulge in another wonderful little aside.

“A warning about the government mortality statistics: if you are of a nervous or hypochondriacal disposition, avoid them at all costs. Here are some of the categories of deaths: ‘Accidental suffocation or strangling in bed’ (eight deaths), ‘Contact with plant thorns and spikes and sharp leaves’ (one death) and ‘Drowning and submersion while bath tub’ (eighteen deaths). Interestingly, only one person died after being bitten by a rat, but ten from being ‘bitten or struck by other mammals’. But which mammals? Dogs? If so, why not say so? Badgers? Dolphins?”

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How the Baby-Boomers Wrecked Music

I’ve written about the power of the boomers in shaping the political agenda, but it seems that that’s not the only marketplace in which they’ve been exercising their clout.

James Harkin is a “futurologist” and in his book, Niche, he describes how as the general audience declined, the companies he worked for became interested in particular demographics. After chasing teenagers and young people, companies realised that the money was in catering to the baby-boomers.

“Bugger youth culture, went the new mantra: a generation that once promised to die before it got old was now living out a middle youth, and it was up for us to help them feel good about it. Only two years after I had been hired to write fevered reports about the temperature of global youth, I was working for ad agencies and think tanks in New York and London to find out who older people really were … whole days flew by in a research haze of Steppenwolf songs, day spas, and Stannah Stairlifts”. [pg 69]

One business that made the shift was the music industry. In the early 2000s, it had become obsessed with teenagers investing in genres like rap, hip-hop and teeny pop just as the teenage audience was working out how to download things for free. By 2004 in the UK, more middle-aged people were buying albums than teenagers. That was all soon to change, though how the shift begun took everyone a bit by surprise.

“In retrospect, it would be easy to blame everything that happened next on a twenty-three-year-old jazz-piano crooner. In February 2002 Norah Jones, the daughter of Ravi Shankar, had released a folksy album called Come Away With Me. The album won some admiring reviews but no one expected it to sell very well, and it duly chugged along at the bottom of the charts. As the year progressed, however, sales began to quicken. The album seemed to have become ethe unofficial mood music for coffee shops and bookstores frequented by a discerning older clientele. Despite a lack of publicity, it was obvious that Norah Jones had somehow acquired a devoted army of fans. … By February 2003, a full year after its release, Come Away With Me has ascended to No. 1 on the Billboard album chart, where it remained for three weeks. In the same month it took five Grammy awards, including pop album of the year … it sold an incredible six million copies – most of them, a little research reveal, to music lovers at least two decades older than the singer herself.” [pg 67]

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The birth of the Penguin paperback

I’m currently enjoying Niche by James Harkin, which is about how the mass-market is declining. The big idea of book is on the flap: “There’s a new rule in business: forget about the general audience and instead stake out an identifiable niche”.

James Harkin is like a museum curator, leading us through exhibition after another. On our guided tour through the not-too dusty halls of modern life we pass HBO making money by giving its writers creative control, Gap trying to appeal to older and younger audiences and failing to please either; MyBarackObama, the social networking site that won Barack Obama the election, and a thousand other fascinating little stories, many of which I will no doubt be writing up here.

One such little story is about the birth of the mass-market paperback.

“In Britain, Allen Lane, a director of the Bodley Head publishing house, designed a new size for his proposed paperbacks and assigned different colours for each genre, including the now-iconic orange for fiction, green for crime and dark blue for biographies. He also gave the company’s imprint its own name: Penguin. The first ten in his selection appeared in 1935, and included novels by Mary Webb, Compton MacKenzie and Dorothy L Sayers as well as Ernest Hemingway’s contemporary classic, A Farewell to Arms. …”

In order to break even however, Allen Lane had to sell lots of copies, which meant finding unconventional places to sell them. In June 1935, Allen Lane persuaded Woolworths to take a big order. Priced at sixpence, placed amongst the sweets, clothes and other nik-naks, it changed the face of publishing. Books which had once been exclusive and expensive items, were now available to the masses.

It’s a great story, but the thing that strikes me is that 6 pence converted to new money and adjusted for inflation is £1.29. Even if you calculate it as a measure of average earnings, the price is £4.88.

Maybe one of the reasons book sales are declining is because the books are overpriced!

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Industry vs Business

Little observation from John Lanchester, author of Whoops! (An excellent, slim 200-page explainer of the banking crisis).

“There is a profound anthropological and cultural difference between an industry and a business. An industry is an entity which as its primary purpose makes or does something, and makes money as a byproduct. The car industry makes cars, the television industry makes TV programmes, the publishing industry makes books, and with a bit of luck they all make money too, but for the most part the people engaged in them don’t regard money as the ultimate purpose and justification of what they do. …

The City views everything as a business. This has always been true … but the thing that changed under Mrs Thatcher was that for the first time the City now had unquestioned supremacy…” [pg 170-1]

The values in British society changed. Instead of being interested in making things, we became interested in just making money.

This seems a shame, if for no other reason, when you make things you have more than one thing to make you happy.

When you’re making something, you get pleasure from that process. If the process is compromised – management interferes, there’s not enough time, or disaster strikes-  and the car/ book / TV programme  isn’t as good as you had wished, you can say to yourself: “Oh well, at least it paid the bills”. Similarly, if you’re not making loads of money, you can derive satisfaction from the thing you’ve created.

Just like an investor might diversify their portfolio so that it’s not overly reliant on stocks or bonds etc, working in an industry – rather than just business – means you diversify your sources of satisfaction.

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