
The Collapse of Complex Business Models (2010) - aftabh
http://www.shirky.com/weblog/2010/04/the-collapse-of-complex-business-models/
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thecolorblue
"In a bureaucracy, it’s easier to make a process more complex than to make it
simpler, and easier to create a new burden than kill an old one."

He should have lead with this.

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pjbster
One fun experiment would be for a company to place all it's middle managers on
gardening leave. For a year. Give them the same ability to influence as that
of a very minority shareholder (i.e. none).

Then see how the bottom line fares. I see three outcomes:

    
    
      1. Profits are down. Those managers added value after all.
      2. Profits about the same. Those managers added nothing.
      3. Profits up!! Those managers were dragging them down the whole time. Who knew?
    

Letting highly paid employees go is, of course, expensive. But in 2 out of
those 3 scenarios the company can afford to simply keep them on gardening
leave indefinitely.

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watwut
What will happen is massive ugly in-fighting among professionals over turfs,
who is responsible for what, whose faults what is. Eventually, winners of that
cut the throat and backstab fight will take the role of middle managers.

~~~
candiodari
And the difference with the current situation is ...

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gkanai
Shirky cites Joseph Tainter. If you want to hear from Tainter directly, which
is the podcast that has kept me up at night, listen to this:

podcast (en) – omega tau science & engineering podcast 184 – Societal
Complexity and Collapse

[https://overcast.fm/+HPTgN-4U](https://overcast.fm/+HPTgN-4U)

Tainter's book on Amazon (no affiliate link):
[http://a.co/hDAtqpU](http://a.co/hDAtqpU)

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codinghorror
Man I miss the hell out of Clay Shirky writing stuff on a blog. He barely even
posts on Twitter. I guess he had the book about the Chinese smartphone company
in 2015

[https://www.amazon.com/Little-Rice-Smartphones-Xiaomi-
Chines...](https://www.amazon.com/Little-Rice-Smartphones-Xiaomi-Chinese-
ebook/dp/B013AH5IUQ/)

.. but nothing else of note? It's hard to tell what he's up to these days, but
I sorely miss his blog writing.

~~~
gkanai
He left NYU Shanghai earlier this year to move back to NYU Manhattan.

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adampk
To pick a couple of examples more or less at random, last year Barry Diller of
IAC said, of content available on the web, “It is not free, and is not going
to be,” Steve Brill of Journalism Online said that users “just need to get
back into the habit of doing so [paying for content] online”, and Rupert
Murdoch of News Corp said “Web users will have to pay for what they watch and
use.”

Was that dog whistling the repeal of net neutrality?

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yuhong
My favorite is all the financial complexity in order to take advantage of the
debt-based economy. I even did a blog post on Google and Mozilla that shows
some of the other problems: [http://yuhongbao.blogspot.com/2017/12/google-
mozilla-and-deb...](http://yuhongbao.blogspot.com/2017/12/google-mozilla-and-
debt-based-economy.html)

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bsanderson
"The most watched minute of video made in the last five years shows baby
Charlie biting his brother’s finger. (Twice!) That minute has been watched by
more people than the viewership of American Idol, Dancing With The Stars, and
the Superbowl combined. (174 million views and counting.)"

Not sure why the two use cases are presented as directly competing. The
popularity of long form scripted content on Netflix and shows like Walking
Dead, Breaking Bad, etc., are huge and not going away even though the methods
of distribution are changing from linear broadcast with commercials over
cable/satellite to subscription on-demand OTT without ads. That's the
transition taking place rather than hours spent viewing 1 minute viral videos
taking away from hours spent watching high cost production long-form content
otherwise the ratings would be crashing for those shows and Netflix wouldn't
be spending billions on production.

Seems like a false dichotomy.

At least a few times per week I go through the YouTube and Vimeo apps on the
Apple TV and apart from catching up on late night talk shows on YouTube, and
some interesting short-form content on Vimeo, it doesn't at all replace
watching high quality (expensive, complex) content from iTunes and Netflix.

The article also doesn't cover live programming at all, which is increasing
exponentially in complexity for things like sports (Olympics coverage,
specifically) but also a ton of live event production that wasn't possible
before complexity (new technology) increases. Again, user-generated live
(Periscope, YouTube) is additional, and doesn't replace watching that content
either. There's a ton of room for more complexity with new technology for
things like the Super Bowl with tiny 4K cameras in each helmet and delivery
over web streaming with viewers watching from whatever angle they want, etc.,
that user generate content has no means of replacing.

The challenge is managing the shift from ad revenue to subscription revenue,
and subsequent competition for the consumer's total monthly subscription
budgets, rather than complex production being challenged by non-complex (user
generated) content.

Unlike the AT&T example listed, large companies are already aggressively
moving towards acquiring content rights and shifting to building OTT/VOD
platforms, which is a key motivator of the recent large acquisitions like AT&T
(ironically) and Time Warner / Turner / HBO, and Disney and Fox... the pivot
is underway and whether or not it is successful doesn't seem related to those
companies not being able to simplify but rather if they can avoid a fall in
revenue from loss in ad sales during the transition process.

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scott_s
_All_ content competes with each other, because humans still have finite time.
Personally, I have gone through periods of not watching any long-form,
scripted shows, and primarily watched content on YouTube about my specific
interests. I have a finite amount of leisure time in the evening, and every
option I have - books, shows, video games, dinner with friends, YouTube
channels, etc. - is in direct competition with everything else.

~~~
bsanderson
Yes, obviously true in terms of finite time in the day. I think the total time
is actually increasing (although up to a finite point) but the main point is
that it's more of a transition from linear/cable/sat/ads to VOD/OTT/mobile as
the primarily factor that the large companies have to manage, rather than
heaving losses in time spent on complex (high budget professional content) vs
non-complex (user generated).

To imagine an extreme end of the spectrum as a thought experiment, I can't
imagine that 5 years from now I'll be watching 1 minute viral videos all
evening instead of professionally produced long form content. Candy is great
but I still haven't replaced a (complex) full meal dinner with a pile of
candies.

Even for video content on Facebook, I'd assume as that takes up more of the
finite time it will trend towards increasing volumes of professionally
produced content.

There's a lot of interesting low budget user generated content but that won't
change the fact that a lot of value created by professional, extremely
talented writers, producers, cinematographers, editors, special effects
graphics creators, etc..

~~~
Swizec
> I can't imagine that 5 years from now I'll be watching 1 minute viral videos
> all evening instead of professionally produced long form content.

What's the youngest person you have the chance to observe the evening routine
of?

Both my girlfriend and my sister will go to bed every evening, pull out their
phone, and spend an hour watching 1 minute short viral videos on Instagram,
Facebook, and Snapchat. Endless stream. 1 minute bits of content.

My girlfriend has gone so far as saying Snapchat's serious channels are the
best service to catch up on the news.

~~~
bsanderson
Definitely a good point, although it might be a reflection of high budget long
form content reflecting interests of older people more than younger
generations, and as they grow into being more represented at the professional
tiers (which takes years of experience) they'll produce new shows that reflect
their values and interests.

In terms of younger audiences though there is also huge success with high
budget animation. Pixar's success over time still seems more tied to quality
of each film rather than declining consistently over time due to loss of
interest in the format itself.

For news, 100% agree, ripe for disruption from social media (or at least web
over cable news) although that is obviously facing new challenges in terms of
reliability (i.e. Facebook/Twitter re election).

~~~
Swizec
The trend I've seen on Snapchat is high budget high quality production of 1
minute viral videos. Think NatGeo documentary, but delivered as 5 20second
videos with captions.

Similar to how a lot of high budget production moved from making 3 hour
movies, to making 10 1 hour episodes. Overall more and better content, but in
smaller easier to digest pieces.

I think that's a trend that isn't going away. People, especially as they age,
have less and less time to stick to one thing. If you can cut it up for them
and make it nibbleable, they will go for it.

When was the last time you chose to watch a full movie at home in one sitting?
I bet you watch Netflix series instead, or pause your movie and continue the
next day.

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autokad
I was actually thinking this about the movie/tv industry recently. in order to
get better, it has to get cheaper / less quality / quicker turn around times.

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paulajohnson
But today we have people paying for high quality content streamed over the
net. Its the business model of Netflix and Amazon.

