Tarzan Economics: Eight Principles for Pivoting Through Disruption
Author:Will Page Publisher:Simon & Schuster
Pages: 295; Price: Rs 699
I enjoyed bartering a night’s sleep to read this book. Many economists have slipped into the habit of trying to tell a fast tale, not often with happy results. Tarzan Economics from Will Page, the former chief economist at Spotify, can claim he has kept my attention going. Possibly because as a music buff, he can make sentences sing. It does not matter if you don’t quite agree with what he’s saying; what matters is that the story is an engrossing one.
“Poets would be the Georgian equivalent of click-baiters, doing what they can to grab attention and sway public opinion, forming Facebook groups that champion those inside and trolling in Twitter everyone with views they oppose. Unashamedly, be it nature or nurture, economists like me are drawn to the middle, in between the mathematician and the poet — pivoting between the desire for truth and the need for recognition. It may not just be the dismal science that finds itself stuck in the middle,” he writes.
What drew me in was not the story of how the music industry revived from the near-death experience of the early 2000s. It was the description of how the experience changed the very nature of music. More on that, later.
Mr Page was in the middle of the crumbling music industry, hacked down by pirates like Napster and the easy reach of a copying machine and a blank CD for everyone else. In 1999, before Napster launched, over 170 million Americans bought CDs and the average spend per buyer was $63 per year. Once buyers found they need not pay on the net for the music they consumed, those numbers hurtled downward.
What Spotify did, and it was a trick that YouTube, Apple Music and Amazon Prime Music copied, was to stop chasing the pirates. The chase had failed miserably. Mr Page points out the game turned when the economic model of the music industry changed. Instead of counting CDs literally, the industry moved to attract customers with access. The Net was and remains there for free access by anyone who does not want to pay. What the new age music companies did was to ramp up the quality of the paid access they provided.
“Spotify engineers created new metrics to measure attention efficiency. Their target was for the play button on Spotify to start playing a chosen track within 285 milliseconds, because their understanding of the human perception of ‘instant’ was 250 milliseconds. Start a track within this narrow time frame and the brain cannot spot any delay,” he explained
It was tricks like these of playing on attention efficiency that got the music companies back in the game. By 2019 they had clawed back a good part of their business: 93 million Americans paid an average annual retail price of $81, a 55 per cent rise over the levels of 2009.
This play on attention span, Mr Page says has not only fundamentally changed the industry but also the creation of music. The creators figured out they had just 30 seconds to grab attention. It is a carefully measured metric that explains why an ad usually gets the same half a minute span in a commercial break. To make a promise, create anticipation and secure a commitment before the listener moves on. So if the rights holder has to be paid for the song it is only the first 30 second that counts. “It’s entirely rational (then) to write shorter songs; if a listener has a finite attention span, best to cram as many songs as you can into that tiny window. Canny writers write short tunes” in which the chorus starts sooner. Mr Page quotes an Economist study which showed that the percentage of hits with a chorus that began in the first 15 seconds has risen to 40 per cent in 2018 from an average of 20 per cent, earlier.
Mr Page makes a broader point. He argues companies need to like Tarzan, let go of the vine on which they are swinging safely and lunge for the new. He marshals loads of examples of media companies gaming the system, such as The Mint quiz run by ITV in UK, to conclude “for the many individuals, firms and institutions grappling with Tarzan Economics, I truly believe they will find solace in rebalancing communism with capitalism, or capitalism with communism”. So he suggests the news media could benefit if they could develop a shared advertising platform and explore collective licensing and distribution models for all their journalistic output. It is not clear, though, who can sit as the regulator to sift through the proceeds, let alone the risks these news organisations would run of becoming information cartels that can be captured by those in power.
But there is an amazing variety of tales from corporate history he offers, ranging from how Tupperware brought in concepts of “influencers” 50 years before Silicon Valley did to how Liverpool Football Club today uses YouTube even better than Spotify did. He has music in his arguments, which will keep you going for a long lazy read this summer.