Escaping the Flat Circle of Time: Hollywood and the Art of Future Insights

The Innovation Quarterly (Winter 2014) | 1

Escaping the Flat Circle of Time

By Dustin Smith

ith the soaring popularity of HBO’s True Detectives, Nietzsche’s doctrine of eternal recurrence has once again gained cultural purchase. In Episode Five, Matthew McConaughey’s character

Rust Cohle muses: "Someone once told me time is a flat circle. Everything we've ever done or will do we're gonna do over and over and over again." Which, to the clear-‐eyed, sounds like the 86 iterations of The Oscars1 ceremony: the same story arc, starting with a benign comedic monologue and minor awards, and then crescendoing to the “In Memoriam” montage and Best Picture revelation. But the formula works. It “gets the ratings.”2 It is commercially successful.3

Hollywood4 has faltered, however, when applying that same logic to feature films. Chasing blockbuster hits, the studios have made fewer,5 bigger6 films, leaning on pulp lit (Twilight, The Hunger Games), fantasy (The Avengers, Star Trek), and action (Gravity, World War Z) genres, with a heavy reliance on sequels and reboots.7 These movies are easier to model financially, and the pressure to demonstrate expected returns prior to “securing financing” for films is enormous, thus the appeal. They also play better globally.

But Hollywood is no longer a monopolist serving a disconnected, culturally starved public. We swim in cheap, abundant, excellent, on-‐demand content, with ferocious competition for our attention. We are part of a vast, complex, globally intertwined culture admixing at an ever-‐increasing clip. The model of blockbuster mediocrities shown in a soda-‐glazed multiplex is withering, with declining profits8 as testimony.

Cost-‐cutting9 will allow studios to stabilize financially and placate investors in the short-‐term. In the mid-‐term, corporate strategy integrating megatrends such as Ubiquitous Computing, 3D Integration and User-‐Generated Content will help them play catch up (see Comcast’s move to release films on the

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same day as theaters,10 for example). But to progress beyond incremental improvements and toward transformative and defensible strategic innovation in the long-‐term, studios need to take account of relevant weak signals, the emergent, non-‐obvious micro-‐trends that reveal a proprietary view of the future.

Weak Signals Megatrends have been validated by industry experts and by clear supporting data; they are well-‐

known and defensible. But weak signals take a concerted effort to gather, to ascertain their relative plausibility, to synthesize. Often they’re hidden deep in extra-‐industry trade publications, academic journals, and the technical press, as well as social media conversations, vlogs/blogs/Tumblr posts, the comments section of Amazon, and cultural criticism.

By way of example (relevant to the film industry), take Netflix. Initially it offered no innovation in content, simply better distribution than Blockbuster. But now Netflix produces original series such as House of Cards, explicitly taking advantage of streaming (and human weakness). Described by The New Yorker culture critic Emily Nussbaum as “hypnotic, highbrow, empty calories,” Netflix made all 12 Season Two episodes available on the premiere date:

“House of Cards really is designed to be binge-‐watched, by which I mean consumed so quickly there is no time to taste all the garbage we are guzzling down alongside those delicious and sneering putdowns.” Willa Paskin,11 Slate

Other examples include Kickstarter and YouTube: • After the Veronica Mars TV show was cancelled in 2003, creator Rob Thomas shopped

around a movie but couldn’t get funding. In 2013 he mounted a Kickstarter campaign12 that netted over $5.7M, drawn from over 71,000 “backers.”

• PewDiePie13 (PEW-‐dee-‐py), a 24-‐year-‐old Swede, has more than 24 million subscribers to his YouTube channel (about one percent of all Internet users) and is projected to make $2.8 million over the next four months from related ad revenue. His main attraction: watching him play video games.

With hundreds more of these weak signals, clusters emerge, indicating hotter, more promising areas of inquiry. The three examples above may well presage a more personal, more participatory entertainment experience. Then again, perhaps not; upon a more intense search, one could find


stronger evidence to the contrary and abandon that hypothesis. But the overall intention is to weave a tapestry of the megatrends and the weak signals into a coherent depiction of a plausible future, which we call future insights.

Future Insights Swiftly evolving technologies, global connectivity, and increasing complexity all contribute to uncertainty and risk for decision-‐makers. To thrive in this environment, evidence-‐supported future insights can help articulate a future against which one can weigh decisions, to inform anticipatory actions.

A few key tenets of a good future insights process:

1. Cultivate and curate knowledge. Read and watch everything of interest to your domain: blogs, Amazon comments, interviews, screenshots, articles, books, Tweets, academic papers. Pull in data feeds. Snip whatever you find interesting (we use Diigo and other tools).

2. Build a “community of interest.” Engage with individuals and organizations with intelligent things to say about your domain. This may well include non-‐traditional “intentional communities” with customers and other stakeholders.

3. Create future scenarios and stories. A combination of plausible future states (drawn from megatrends and weak signals) and likely implications supports an easily communicated narrative.

4. Establish your “beacons out in time.” Given the stories, what are signals or indicators of change? Ideally you have “trip points” that spur action: investment, further study, project greenlighting, etc.

5. Review, debate, and revise. Put time on the calendar to review assumptions, key questions, stories, and beacons.

Developing future scenario models extends a firm’s purview beyond its industry as it exists today, articulating a plausible world in which envisioned innovations can be tried and tested. It spurs opportunity discovery and enhances opportunity development. It affords decision-‐makers better communication tools and clearer insights into where to allocate time and resources, with a higher level of confidence. It is an essential component of strategic innovation.

Large organizations such as the “Big Six” film studios boast inherent advantages of scale, access to capital, brand equity, and a cultivated talent base. But in the face of rapid change, they risk ossification and irrelevance. As a corrective, future insights-‐supported strategic innovation allows firms to remain plastic and nimble enough to take advantage of the next big opportunity.


At its best, Hollywood has told us beautiful and terrible truths, beautiful and terrible lies. This only makes the prospect14 of Fast and Furious 8 more crushing. We hope Hollywood takes heed and soon escapes the flat circle of time.

NOTES: 1 Incidentally, McConaughey received the 2014 Best Actor award for his role in Dallas Buyers Club. 2 The 86th Academy Awards drew 43M views, the highest total viewership in 14 years, up from 40.4M in 2013. 3 Ostensibly The Oscars ought to recognize artistic merit, absent commercial appeal. But Raymond Chandler’s 1948 critique sounds as fresh as ever: “It doesn’t really seem to make much difference how the voting is done. The quality of the work is still only recognized in the context of success. A superb job in a flop picture would get you nothing, a routine job in a winner will be voted in. It is against this background of success-‐worship that the voting is done.” 4 When referring to “the studios,” or “Hollywood,” we mean the six “MPAA member studios”: Disney, Paramount, Sony, Fox, Universal, and Warner Bros. They boast over 80% market share and are still gaining. 5 MPAA studio releases are down 29%, comparing 2012 to 2003, and down 9% from 2012 to 2011. The Writers Guild of America, a key supplier to the studios, on the effects of fewer films: “This means more competition between writers and the pressures become enormous. In this type of environment screenwriters rightly feel like they are being exploited. I’ve had to do free rewrites, often been expected to start work before any type of payment is made, and I’ve frequently been paid late by major studios. I think those qualify as symptoms of business conditions in decline.” 6 “Hollywood economics have been strained by movie budgets that have been rising steadily over the past couple of decades. To cut costs, some studios have dropped smaller budget movies with big-‐name, expensive actors, but kept making summer blockbusters based on franchises such as superheroes.” Ryan Nakashima, Huffington Post 7 Fourteen out of the top 20 films were sequels or reboots. 8 Five out of the six majors posted profit declines in 2012, with Disney down 17.2% and Sony down 43.1%. 9 “Sony Entertainment Is Said to Hire Bain & Company for Cost-‐Cutting.” 10 Comcast began this battle with theater operators in 2007. 11 Full article here. 12 The Veronica Mars Kickstarter has reached its goal, but scroll down to find project updates from Rob Thomas. 13 From PewDiePie’s YouTube homepage, a video-‐game playthrough and “Pewds Does Everything” would be most representative. And here’s a piece on how “Pewds” is dealing with the runaway subscriber base. 14 “Kurt Russell, on the other hand, has already mentioned that he would like to sign up for Fast 8, after they finish this one.” Shane Jordan, Classicalite

About The Inovo Group

Founded in 2001, Inovo is an innovation consulting firm based in Ann Arbor, Michigan, that helps the world’s leading organizations succeed at strategic innovation.

About the Author

DUSTIN SMITH is a Senior Innovation Lead at The Inovo Group. Since joining Inovo in 2012, he has developed strategic business opportunities for Fortune 500 clients in the energy, health care, and consumer products sectors. With his passion for technology and innovation, Dustin brings a highly dynamic perspective to all client projects.

Earlier in his career, Dustin spent six years as COO of The Armadillo Group (now part of SMS Assist), where he focused on R&D with a heavy emphasis on clean/green tech innovation and product design experimentation. Prior to Armadillo, Dustin was a program officer at Christo Rey Jesuit High School in Chicago, where also he founded and taught high tech courses.

Dustin completed his undergraduate work in Philosophy at Villanova University in Pennsylvania and holds an MBA from the University of Michigan’s Ross School of Business.

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Escaping the Flat Circle of Time: Hollywood and the Art of Future Insights

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