In entertainment offerings, risk is here to stay

I recently said goodbye to an old friend that had been with me since I was about 12 years old: my worn-down, blue-and-yellow Blockbuster video rental card.

There are few better examples of how the entertainment business has actually changed (as opposed to various romantic theories about how it could develop) than the decline of this once culturally important institution.

The downfall of Blockbuster was held by many experts to portend the fate of traditional media business models that relied on the other kind of blockbuster — those big, bloated mass-entertainment creations that had become a mainstay of the industry. These were now deemed too wasteful to turn a profit in the era of democratized production and seamless digital distribution.

Anita Elberse, a professor at Harvard Business School, has a different take on the future of big-ticket, hyper-marketed, budget-busting movies, music albums and sports teams, arguing that they are growing more, not less, important to the success of entertainment groups.

In her new book, “Blockbusters: Hit-Making, Risk-Taking, and the Big Business of Entertainment,” she lays out her thesis through a variety of entertaining examples, such as Disney’s acquisition of Marvel Comics, the personnel moves of Real Madrid and the marketing and publication of Jay Z’s memoir, “Decoded.”

In each case, the product stood out from the noise of an increasingly crowded marketplace by not playing it safe. They succeeded by raising the stakes.

“The blockbuster strategy is becoming more necessary than ever, but also harder to pull off,” she writes. “The bets made by content producers are therefore becoming riskier — only those titles in greatest demand have a shot at earning back their production and marketing costs, with the remaining products more likely to fall by the wayside.

“What we end up with is a world still dominated by blockbusters, but one that is possibly even more lopsided.”

Elberse’s work is well known in the media industry. Although she teaches graduate students at Harvard, “Blockbusters” has the feel of a freshman seminar — enough fun to keep you awake, enough substance to make the lesson matter.

The book’s main attraction comes about halfway through, when Elberse squares up to Chris Anderson’s influential 2006 book “The Long Tail: Why the Future of Business Is Selling Less of More.”

Anderson argued that technology has made it easier to provide specialized goods for niche markets; this would eventually lessen the appeal of the business model of offering larger, mainstream products.

Citing the music industry, Elberse notes: “The trend is clear: as the market for digital tracks grows, the share of titles that sell far too few copies to be lucrative investments is growing as well. More and more tracks sell for next to nothing.”

In light of the effect the “long tail” theory has had, its rebuttal by Elberse comes off as a sharp counterpoint to the idea that technology will lead to an era of niche media.

Indeed, despite a spate of box-office disappointments over the summer, the recent success of movies such as “The Hunger Games: Catching Fire” underscores her case that blockbusters are still relevant and viable.

Far from a dying business model, blockbuster strategies are extending from the entertainment industries to technology and consumer products, Elberse argues: “Apple releases fewer products and product variations than virtually all of its competitors in computer hardware,” she writes. “Apple makes only a few bets each year: it focuses its production efforts on a small number of the most likely blockbusters.”

The argument is ultimately fairly convincing. But readers seeking a technical analysis of modern media would be better off reading one of Elberse’s many academic papers. “Blockbusters” builds on her already impressive academic resume to create an accessible and entertaining book — let’s see if it sells enough copies to be considered a mass media success.

Reviewer Jason Abbruzzese is a former Web editor and reporter for the Financial Times of London, in which this review first appeared.