Where did ranch dressing come from?

Friday, September 21st, 2018

Where did ranch dressing come from?

Steve Henson, a plumber from the tiny village of Thayer, Neb., came up with the dressing mix around 1950, during a stint in Anchorage as a construction worker, where he also served as an occasional cook for the crew. In that part of the world, perishable ingredients like fresh herbs, garlic and onions, and dairy products were not easy to come by.

By 1954, he and his wife, Gayle, had moved to California and bought a ramshackle property called Sweetwater Ranch, in the San Marcos Pass above Santa Barbara, Calif. They renamed it Hidden Valley, and opened it as a guest ranch. But according to their son, Nolan Henson, the place became even more popular as a steakhouse, with Steve’s dressing a favorite souvenir.

“It was all dry ingredients the way my dad made it,” said Nolan Henson, now 74, who grew up on the ranch. (Gayle died in 1993, Steve in 2007.)

“People carried it home in mayonnaise jars,” Mr. Henson said. “Seemed like we were always mixing it, and we put it on everything: steaks, vegetables, potatoes.”

Overwhelmed by demand, in the late 1950s the Hensons began packaging the dry ingredients in an envelope that could be presented or mailed to customers, who would add their own buttermilk and mayonnaise at home — much like a boxed cake mix, which was introduced to the mass market by Pillsbury in 1948.

The product was a runaway success. “The dressing pretty much took over the ranch,” said Mr. Henson, who spent hours as a child filling seasoning packets.

With that, ranch began to take over the nation, moving from the West to the Midwest and occupying salad bars through the 1970s; a shelf-stable version arrived on supermarket shelves in 1983. But according to Abby Reisner, the author of the new cookbook “Ranch” (Dovetail Press), ranch madness didn’t go national until 1986, with the introduction of Cool Ranch Doritos, tortilla chips that were infused with a distinctly creamy, oniony bite. Ranch was already popular on its own, but the combination of cream and crunch in one bite — a fusion of dip and chip — turned out to be a masterstroke.

Cool Ranch Doritos opened the door to ranch as a seasoning beyond salad. It began to show up frequently as a dip for French fries (replacing ketchup), for chips (instead of salsa) and for Buffalo chicken wings (pushing aside blue cheese dressing).

[...]

Ranch may be a modern phenomenon, but its flavor profile isn’t new at all. Many classic condiments also combine cream (or creaminess) with alliums (the family that includes garlic, onion, leeks and chives). Middle Eastern toum, Mediterranean aioli, Caesar dressing, French onion dip and the pasta sauce “Alfredo” served at places like Olive Garden all have the same profile: a mild, cooling base set against the heat of strong, pungent alliums.

That coolness is what makes ranch an appealing partner for food that is spicy or charred or deep-fried, and many of America’s favorite foods have those flavors front and center. (In case you don’t believe that ranch flavor represents the pinnacle of American culinary achievement, consider that ranch dressing is already called “American dressing” in many European supermarkets, and that the Doritos flavor we know as “Cool Ranch” goes by “Cool American.”)

Posted in Business | 4 Comments »

Google’s leadership was quite dismayed by Trump’s election

Wednesday, September 12th, 2018

Breitbart just shared a video recorded by Google shortly after the 2016 presidential election, where the leadership is obviously dismayed:

  • (00:00:00 – 00:01:12) Google co-founder Sergey Brin states that the weekly meeting is “probably not the most joyous we’ve had” and that “most people here are pretty upset and pretty sad.”
  • (00:00:24) Brin contrasts the disappointment of Trump’s election with his excitement at the legalization of cannabis in California, triggering laughs and applause from the audience of Google employees.
  • (00:01:12) Returning to seriousness, Brin says he is “deeply offen[ded]” by the election of Trump, and that the election “conflicts with many of [Google’s] values.”
  • (00:09:10) Trying to explain the motivations of Trump supporters, Senior VP for Global Affairs, Kent Walker concludes: “fear, not just in the United States, but around the world is fueling concerns, xenophobia, hatred, and a desire for answers that may or may not be there.”
  • (00:09:35) Walker goes on to describe the Trump phenomenon as a sign of “tribalism that’s self-destructive [in] the long-term.”
  • (00:09:55) Striking an optimistic tone, Walker assures Google employees that despite the election, “history is on our side” and that the “moral arc of history bends towards progress.”
  • (00:10:45) Walker approvingly quotes former Italian Prime Minister Matteo Renzi’s comparison between “the world of the wall” with its “isolation and defensiveness” and the “world of the square, the piazza, the marketplace, where people come together into a community and enrich each other’s lives.”
  • (00:13:10) CFO Ruth Porat appears to break down in tears when discussing the election result.
  • (00:15:20) Porat promises that Google will “use the great strength and resources and reach we have to continue to advance really important values.”
  • (00:16:50) Stating “we all need a hug,” she then instructs the audience of Google employees to hug the person closest to them.
  • (00:20:24) Eileen Noughton, VP of People Operations, promises that Google’s policy team in DC is “all over” the immigration issue and that the company will “keep a close watch on it.”
  • (00:21:26) Noughton jokes about Google employees asking, ‘Can I move to Canada?’ after the election. She goes on to seriously discuss the options available to Google employees who wish to leave the country.
  • (00:23:12) Noughton does acknowledge “diversity of opinion and political persuasion” and notes that she has heard from conservative Google employees who say they “haven’t felt entirely comfortable revealing who [they] are.” and urged “tolerance.” (Several months later, the company would fire James Damore allegedly for disagreeing with progressive narratives.)
  • (00:27:00) Responding to a question about “filter bubbles,” Sundar Pichai promises to work towards “correcting” Google’s role in them
  • (00:27:30) Sergey Brin praises an audience member’s suggestion of increasing matched Google employee donations to progressive groups.
  • (00:34:40) Brin compares Trump voters to “extremists,” arguing for a correlation between the economic background of Trump supporters and the kinds of voters who back extremist movements. Brin says that “voting is not a rational act” and that not all of Trump’s support can be attributed to “income disparity.” He suggests that Trump voters might have been motivated by boredom rather than legitimate concerns.
  • (00:49:10) An employee asks if Google is willing to “invest in grassroots, hyper-local efforts to bring tools and services and understanding of Google products and knowledge” so that people can “make informed decisions that are best for themselves.” Pichai’s response: Google will ensure its “educational products” reach “segments of the population [they] are not [currently] fully reaching.”
  • (00:54:33) An employee asks what Google is going to do about “misinformation” and “fake news” shared by “low-information voters.” Pichai responds by stating that “investments in machine learning and AI” are a “big opportunity” to fix the problem.
  • (00:56:12) Responding to an audience member, Walker says Google must ensure the rise of populism doesn’t turn into “a world war or something catastrophic … and instead is a blip, a hiccup.”
  • (00:58:22) Brin compares Trump voters to supporters of fascism and communism, linking the former movement to “boredom,” which Brin previously linked to Trump voters. “It sort of sneaks up sometimes, really bad things” says Brin.
  • (01:01:15) A Google employee states: “speaking to white men, there’s an opportunity for you right now to understand your privilege” and urges employees to “go through the bias-busting training, read about privilege, read about the real history of oppression in our country.” He urges employees to “discuss the issues you are passionate about during Thanksgiving dinner and don’t back down and laugh it off when you hear the voice of oppression speak through metaphors.” Every executive on stage – the CEO, CFO, two VPs and the two Co-founders – applaud the employee.
  • (01:01:57) An audience member asks if the executives see “anything positive from this election result.” The audience of Google employees, and the executives on stage, burst into laughter. “Boy, that’s a really tough one right now” says Brin.

Posted in Business, Policy | 5 Comments »

The ability to choose something simpler and more likely to endure

Tuesday, September 11th, 2018

Megan McArdle writes to a refrigerator dying young:

It turns out that refrigerators like the My First Fridge — the kind that quietly chug along decade after decade while needing only minor repairs — really are a thing of the past. According to the National Association of Home Builders, the average life span of a refrigerator is now just 13 years. And the German environmental agency found that between 2004 and 2013, the proportion of major appliances that had to be replaced in less than five years due to a defect rose from 3.5 percent to 8.3 percent. These days, we do not so much own our appliances as rent them from fate.

How did we become renters in our own homes? Peruse the Web, and you’ll discover a variety of explanations: outsourcing to suppliers who opt for cheapness rather than longevity; fancy computer-controlled features that add fancy problems; faster innovation cycles that leave inadequate time for testing; and government-imposed energy-efficiency standards that require a lot of fiddly engineering to comply with. But essentially, all of them boil down to one word: complexity. The more complicated something is, the more ways it can break.

When you are standing over the corpse of an appliance that died too young, it’s tempting to long for simpler days. But then, simpler isn’t the same as better. Replacement cycles may have shortened, but we can afford to replace our appliances sooner, because prices have fallen so dramatically. In 1979, a basic 17-cubic-foot Kenmore refrigerator cost $469 — or in today’s dollars, $1,735, which would have taken an average worker about 76 hours of labor to earn. It came with an ice maker, automatic defrost and some shelves. The nearest equivalent today has an extra cubic foot of storage, offers humidity-controlled crisper drawers and costs about a third as much to run. At $529, it represents under 20 hours of work at the average wage.

[...]

That’s the irony of modern life in so many ways, multiplying all our choices while taking away the most fundamental one: the ability to choose something simpler and more likely to endure.

Posted in Business, Technology | 8 Comments »

eSports update

Saturday, September 8th, 2018

Tyler Cowen shares an eSports update:

Tournament prize pools now rival those for some of the biggest events in traditional sports, and global audiences for some big gaming events have surpassed 100 million viewers, driven largely by esports’ exploding popularity in Asia.

The lion’s share of esports revenue comes from corporate sponsorships, according to industry analysis firm Newzoo, with ticket sales, merchandising and broadcasting rights bringing in additional revenue. Newzoo estimates that esports will generate $345 million in revenue in North America this year, in addition to more than half a billion dollars in revenue overseas.

Commenter Stuart “worked in an earlier era of this business (2008)” and notes that “it is a weird world”:

A key challenge I perceived then as now is the opaque visible display of athleticism. The gap between a great tennis player and myself is quite easy to see. I can pick up a racket, but I can’t do much more. In contrast, I can play the same games as these pros and feel accomplished by virtue of a sliding scale of difficulty which games have relied on for decades. Certainly a youth league for Tennis offers a similar analogy to this, but games are designed to be winnable, creating some ambiguity about the difference between the average joe and the pros. The more one plays, the clearer the contrast becomes, but the level of understanding on the part of the general public to the nuance of this struck me then as the reason why it would not gain mass appeal.

What has happened in the intervening decade seems to be a continued disregard for any ‘mainstream’ audience but the continued development of a formerly niche viewership which can appreciate the nuance, strategy and skill on display.

Like other ‘nerdy’ pursuits, eSports still seem to wrestle with a hunger for mainstream acceptance (e.g. lobbying for inclusion in the Olympics), but are clearly at their best when speaking to their core, which is growing by the year.

As another commenter noted, the incentives are unusual in eSports, where a developer owns the game. “Imagine what the NFL would do differently if they were trying to maximize the number of people playing football instead of the number of people watching football.”

Posted in Business, Games | No Comments »

Collaborate on complex problems, but only intermittently

Tuesday, August 28th, 2018

A new study suggests that teams should collaborate on complex problems, but only intermittently:

Bernstein, Assistant Professor Jesse Shore of the Questrom School of Business at Boston University, and Professor David Lazer of Northeastern University put together and studied a number of three-person groups performing a complex problem-solving task. The members of one set of groups never interacted with each other, solving the problem in complete isolation; members of another set constantly interacted, as we do when equipped with always-on technologies; and members of the third set of groups interacted only intermittently.

From prior research, the researchers anticipated that the groups whose members never interacted would be the most creative, coming up with the largest number of unique solutions — including some of the best and some of the worst — and a high level of variation that sprang from their working alone. In short, they expected the isolated individuals to produce a few fantastic solutions but, as a group, a low average quality of solution due to the variation. That proved to be the case.

The researchers also anticipated that the groups whose members constantly interacted would produce a higher average quality of solution, but fail to find the very best solutions as often. In other words, they expected the constantly interacting groups’ solutions to be less variable but at the cost of being more mediocre. That proved to be the case as well.

But here’s where the researchers found something completely new: Groups whose members interacted only intermittently preserved the best of both worlds, rather than succumbing to the worst. These groups had an average quality of solution that was nearly identical to those groups that interacted constantly, yet they preserved enough variation to find some of the best solutions, too.

Perhaps the most interesting result was that when their interactions were intermittent, the higher performers were able to get even better by learning from the low performers. When high and low performers interacted constantly, the low performers tended to simply copy high performers’ solutions and were in turn generally ignored by the high performers. But when their interactions were intermittent, the low performers’ ideas helped the high performers achieve even better solutions.

Bernstein and his co-authors see a number of workplace implications for these findings, including the advantages of alternating independent efforts with group work over a period of time. In some ways, that’s how work traditionally has been done in organizations — with individuals working alone, then coming together in a meeting, then returning to work alone. But advancing technology has changed those cycles.

Posted in Business | 9 Comments »

Extraordinarily pessimistic, and yet still extraordinarily motivational

Saturday, August 11th, 2018

Peter Thiel speaks to Die Weltwoche, in English — after beginning the conversation in German with an American accent:

At the moment, Silicon Valley still looks all-powerful.

The big question is: Will the future of the computer age be decentralized or centralized? Back in the 60s, you had this Star Trek idea of an IBM computer running a planet for thousands of years, where people were happy but unfree. Today, again we are thinking that it is going to be centralized: Big companies, big governments, surveillance states like China. When we started Paypal in 1999, it was exactly the opposite: This vision of a libertarian, anarchistic internet. History tells me that the pendulum has swung back and forth. So, today I would bet on decentralization and on more privacy. I don’t think we are at the end of history and it’s just going to end in the world surveillance state.

What has become the problem with Silicon Valley?

One of the paradoxes of Silicon Valley is that this internet technology revolution is supposed to get rid of the tyranny of place and geography. And yet, it was all happening in one place. There is, however, always a tipping point with network effects. At the beginning, they are very positive, but at some point they can become negative. In economic terms, they become negative when the costs get too high. If you have to pay 2000 dollars a month for a one-bedroom apartment in San Francisco, maybe that is a sign of the boom. But when it is 4000 dollars a month – with a city government where the police don’t work, the roads don’t work, the schools don’t work – 4000 dollars is just a very high tax, in effect. There is also a cultural component: At one point, the wisdom of crowds tips into the madness of crowds – and you end up with a sort of conformity, lemming-like behavior. It actually becomes a somewhat less creative place.

You label yourself a “contrarian”. How did you become one? How does one become a contrarian?

It is a label that has been given to me, not one that I give normally to myself. I don’t think a contrarian per se is the right thing to be. A pure contrarian just attaches a minus sign to whatever the crowd thinks. I don’t think it should be as simple as that. What I think is important for people is to try to think very hard for oneself. But yes, I do deeply mistrust all these kinds of almost hypnotic mass and crowd phenomena and I think they happen to a disturbing degree.

Why do they happen in a supposedly enlightened society?

The advanced technological civilization of the early 21st century is a complicated world where it is not possible for anybody to think through everything for themselves. You cannot be a polymath in quite the way people were in the 18th century enlightenments. You cannot be like Goethe. So there is some need to listen to experts, to defer to other people. And then, there is always the danger of that going too far and people not thinking critically. This happens in spades in Silicon Valley. There is certainly something about it that made it very prone to the dotcom bubble in the nineties or to the cleantech bubble in the last decade.

Tell us about how your support for Donald Trump for president of the United States was received in the Silicon Valley.

That was quite striking. My support for Donald Trump was, on some level, the least contrarian thing I have ever done. If it is half the country, it cannot be that contrarian. And yet, in the Silicon Valley context it has felt extraordinarily contrarian. It is not that politics is the most important thing. I think there are many things that are much more important than politics: Science is more important, technology is more important, philosophy, religion… We normally think that political correctness is literally about politics. But politics is sort of a natural place to start. If you cannot even have differences of opinion in politics, that’s a sign that things are very unhealthy.

What was unique about the Trump campaign?

Republican candidates have always been way too glibly optimistic about everything. I’ve thought for many years that it was critical for the Republicans to somehow run a more pessimistic candidate just because that was a more honest description of what was going on. It is very hard to know how to do that because if you are too pessimistic, you demotivate people: If everything is just going down the drain, no point even voting for me. Somehow, the genius of Trump was that it was extraordinarily pessimistic, and yet still extraordinarily motivational. The slogan “Make America Great Again”, the most pessimistic slogan of any presidential candidate in a hundred years: The country used to be great, it is no longer great. That is a shocking, shocking statement!

Another issue that is debated very controversially is Trump’s trade policy. People are shocked by his imposition of tariffs.

At the center of this is the question with China. The US exports something like 100 bn a year to China, we import 475 bn. What’s extraordinary, is that if we had a globalizing world, we would actually expect the reverse to hold: you would expect the US to have trade surpluses with China and current account surpluses because we would expect that there is a higher return in China because it is a faster growing country than the US. This is what it looked, let’s say, in 1900, when Great Britain had a trade surplus of 2 percent and a current account surplus of 4 percent of GDP. And the extra capital was invested in Argentinean railroads or Russian bonds.

The fact that the US does not have a surplus, that actually it has a massive deficit, tells you that something is completely wrong with the standard globalization picture that we have. It is sort of like: Chinese peasants are saving money and it is flowing uphill into low-return investments in the US and bonds in Europe with negative interest rates. There is something completely crazy about that dynamic.

What’s your view on Switzerland?

Switzerland is an extraordinarily well functioning country. I don’t like the neighborhood it is in, but it is really remarkable. If you compare Switzerland with Austria or Scandinavia, human capital is equally good but the per capita income in Switzerland is 50 to 100 percent higher. It does tell you that there is something that people are doing that is dramatically better. The question is whether its cities are big enough. If you are a talented young person: Do you move to Geneva or do you move to London? It was good if Switzerland had a somewhat better answer to that sort of question. But as I stated at the beginning, I think the technology will be more decentralized and so I think what has been a limitation for Switzerland will be much less going forward.

Are you jealous that you didn’t invent Bitcoin?

It is hard to be jealous of something that you weren’t remotely capable of doing. I have to acknowledge I would never come up with anything like that. So I can’t even be jealous. I was very interested in all these virtual currencies in the late 90s. We started Paypal thinking about that, but at the end it was a payment system for existing fiat money. Somehow, that experience weirdly primed me to underestimate Bitcoin early on. It was on the radar in 2011 and there were people telling me I should buy it, and we didn’t really get involved until 2014. When you have experiences and you learn things, it is often very dangerous and my experience in the late 90s was that cryptocurrencies didn’t work. And it was largely correct, but you always have to be open to think about it.

(Those are just some of the questions and answers.)

Posted in Business, Economics, Policy | 2 Comments »

Why does tech have so many political problems?

Monday, August 6th, 2018

Why does tech have so many political problems? Tyler Cowen suggests some reasons:

  • Most tech leaders aren’t especially personable. Instead, they’re quirky introverts. Or worse.
  • Most tech leaders don’t care much about the usual policy issues. They care about AI, self-driving cars, and space travel, none of which translate into positive political influence.
  • Tech leaders are idealistic and don’t intuitively understand the grubby workings of WDC.
  • People who could be “managers” in tech policy areas (for instance, they understand tech, are good at coalition building, etc.) will probably be pulled into a more lucrative area of tech. Therefore there is an acute talent shortage in tech policy areas.
  • The Robespierrean social justice terror blowing through Silicon Valley occupies most of tech leaders’ “political” mental energy. It is hard to find time to focus on more concrete policy issues.
  • By nature, tech leaders are disagreeable iconoclasts (with individualistic and believe it or not sometimes megalomaniacal tendencies). That makes them bad at uniting as a coalition.
  • The industry is so successful that it’s not very popular among the rest of U.S. companies and it lacks allies. (90%+ of S&P 500 market cap appreciation this year has been driven by tech.) Many other parts of corporate America see tech as a major threat.

Posted in Business, Policy, Technology | No Comments »

They can hold two or more conflicting concepts in their mind

Monday, August 6th, 2018

Closed-minded people would never consider that they could actually be closed-minded. In his book Principles, Ray Dalio lays out ways you can tell the difference between the open- and closed-minded:

  • Closed-minded people don’t want their ideas challenged. They are typically frustrated that they can’t get the other person to agree with them instead of curious as to why the other person disagrees.
  • Closed-minded people are more likely to make statements than ask questions.
  • Open-minded people genuinely believe they could be wrong; the questions that they ask are genuine.
  • Closed-minded people focus much more on being understood than on understanding others.
  • Open-minded people feel compelled to see things through others’ eyes.
  • Closed-minded people say things like “I could be wrong … but here’s my opinion.” This is a classic cue I hear all the time. It’s often a perfunctory gesture that allows people to hold their own opinion while convincing themselves that they are being open-minded. If your statement starts with “I could be wrong”…, you should probably follow it with a question and not an assertion.
  • Open-minded people know when to make statements and when to ask questions.
  • Closed-minded people block others from speaking.
  • Open-minded people are always more interested in listening than in speaking.
  • Closed-minded people have trouble holding two thoughts simultaneously in their minds.
  • Open-minded people can take in the thoughts of others without losing their ability to think well — they can hold two or more conflicting concepts in their mind and go back and forth between them to assess their relative merits.
  • Closed-minded people lack a deep sense of humility.
  • Open-minded people approach everything with a deep-seated fear that they may be wrong.

Posted in Business | 8 Comments »

Best Buy is like an arms dealer

Sunday, August 5th, 2018

Best Buy should be dead, but it’s thriving in the Age of Amazon:

There is, of course, one thing Best Buy has that Amazon doesn’t: more than 1,000 big-box stores. Joly saw the benefit of using them as showrooms — a word so fraught in retail that the company calls them showcases — for the big tech brands, Amazon included. Best Buy was among the first chains to feature Apple boutiques. In April 2013, Joly said there would be Samsung mini-shops in its 1,400 U.S. locations by June. That same month, Best Buy began adding 600 Microsoft stores-within-stores. Sony arrived in 2014. Last year, Best Buy turned over more space to Amazon and Google to better display their smart home technologies. The two are bitter rivals: Amazon doesn’t sell Google Home and offers a limited selection of Google’s Nest products. Best Buy is neutral ground.

The brands essentially pay rent to Best Buy (it’s cheaper than building stores) and either send in their own salespeople or train the blue shirts. No one at Best Buy would offer details about these partnerships. But even analyst Michael Pachter of Wedbush Securities Inc., who in almost 10 years has never recommended buying Best Buy’s stock, describes the partnerships as a phenomenal success because they ease the financial burden of operating stores while enhancing profit margins. “Best Buy is like an arms dealer,” he says. “They’re indifferent to what brand you buy as long as you buy it from them.”

[...]

In August 2013, the company recruited Rob Bass from Target Corp. to make it more efficient and to save a couple hundred million dollars to help cover the costs of Joly’s price-matching strategy. Bass discovered quickly why customers were frustrated: Best Buy’s distribution centers typically weren’t open on weekends or holidays, and its warehouse management software was at least two decades old. The software has been updated, the supply operations extended, and two-day free delivery is standard on orders of $35 or more. In April 2016, Best Buy announced it would offer same-day delivery in a few cities for a fee. Right after that, Amazon expanded same-day delivery to some Prime customers for free. Best Buy then lowered its price, which had been as high as $20, to $5.99. This past holiday season, Best Buy expanded its same-day service to 40 cities.

Bass also turned back to the stores. He started a system that allowed them to fulfill orders via delivery and pickup. Best Buy says 70 percent of Americans live within 15 miles of one of its locations, so it’s been encouraging customers to come collect their orders. Forty percent of the time they do, which “helps my budget a lot,” Bass says. To make those pickups faster, the company is testing an “On My Way” function on its app to ensure customers don’t arrive before their TVs are retrieved from the back of the store. Since 2012 the proportion of its online revenue has more than doubled, from 7 percent of all U.S. sales to 16 percent, well above those at other big-box retailers.

As individual pieces of technology become simpler to use, connecting them gets more complicated and important for their utility. To Joly, this was a missed opportunity. “The vision I had from the beginning is for us to be to the consumer what a company like Accenture is for a business,” he says.

To one longtime employee, this was an enticing idea: an elite group of salespeople who could offer more than the Geek Squad did. Corie Barry had tried to start an advisory program in 2010 when she was a senior director without a budget. Now she’s chief financial officer.

Posted in Business | 3 Comments »

It starts with Fibonacci

Monday, July 30th, 2018

If you ever go to a Robeco presentation, Eric Falkenstein says, be sure to hit them up for their Concise Financial History of Europe:

It starts with Fibonacci introducing the Arabic number system in 1202, but interestingly the Florentine bankers prevented anything but Roman numerals as of 1299, and the Medici’s didn’t adopt Arabic numerals until 1500.

The Florentine bankers Bardi, Peruzzi, and Acciaiuoli, who prospered from 1300 to 1340, left a lot of documentation about their business. The Medicis then dominated from 1397–1494, followed by the Fuggers, and then the Rothschilds from 1800-1900. Interestingly, the Rothschild patriarch created the perfect family business, putting his five sons in key cities throughout Europe, allowing them to arbitrage the different exchange rates common to markets that are not fully integrated. Last year Bitcoin often traded at prices 5% higher in Korea, but it is difficult to move money in and out of Korea. The only way to arb this requires a non-formal relationship with someone in Korea, like a brother. You then buy in the US while your brother sells there, settling when you meet for a holiday.

Jan notes the rise of finance from Northern Italy, to Bruges, then Antwerp (1500-1550), and then Amsterdam. As the Dutch East India company was the first traded stock (1602) and prospered throughout the 17th century, Amsterdam was well situated. Amsterdam also reduced the uncertainty caused by the many coins and their various levels of debasement by requiring every transaction above 600 guilders to go through the Bank of Amsterdam, which kept a 100% reserve ratio and cleaned up the system by melting down ‘bad’ coins.

The English are fond of deprecating the Dutch — Dutch Uncle, courage, date — but they really owe the Dutch quite a bit. The financial center of Amsterdam literally moved to London around 1680, as when Dutch stadtholder William of Orange took over England via the Glorious Revolution in 1688, it gave them not only a Bill of Rights that limited monarchical power, it also created the Bank of England, tradable bonds, and an active London stock market. The start of the Industrial Revolution is often dated around 1750 centered in London, and surely it would have taken a lot longer without those innovations.

There was a simple way to get around the Catholic prohibition on interest. The 14th-century Florentine bankers simply used different FX rates on contracts. As FX rates could fluctuate the bill was not considered a loan and so not usury. Explicit loans were also available, but they would have been more like ‘payday’ lending today, a business dominated by two outsider groups: Jews who could charge interest to non-Jews, and pawnbrokers nicknamed Lombards, whose name underlies the ‘Lombard Streets’ found in many financial districts.

Posted in Business, Economics | No Comments »

One streaming platform is prioritizing classic catalog titles

Sunday, July 29th, 2018

I’m not at all nostalgic for video-rental stores like Blockbuster, but they did have their advantages:

Over five billion rentals have come through 40,000 Redbox kiosks since the company’s launch in 2002 — they now control 51% of the physical rental market in the US. But even the biggest Redbox machine only holds around 600 discs, covering up to 200 titles — no match for even a tiny video store.

Since 2010, the total number of feature films available to stream on Netflix has dropped from 6,755 to 3,686 as of writing this — a loss of more than three thousand titles. There are far more television shows available on Netflix than in 2010 — up from 530 to 1,122 — but that doesn’t make up for the massive decline in streamable films.

And, as BGR notes, “Not only is Netflix primarily focused on generating original TV content, Netflix chief content officer Ted Sarandos a few years ago said that 66% of all Netflix subscribers don’t even watch movies.”

In 2018, over 375 million people subscribe to Netflix, HBO, Amazon Prime, and Hulu. Streaming has become the dominant way in which most of us consume media, but little consideration has been given to what we’ve lost in saying goodbye to the tactile, human experience of visiting a video store.

[...]

Netflix’s current streaming catalogue of 3,686 films seems paltry when compared to even the most average Blockbuster, which stocked in the neighborhood of 10,000 titles. Amazon Prime’s streaming library is three times the size of Netflix’s, with 14,214 films now streaming — Amazon also offers an additional 20,265 titles via their rental service for an additional fee. Hulu has less than half as many movies as Netflix with 1,448 titles now streaming. On HBO NOW, that number falls to only 727 films.

[...]

No streaming service has been able to match the breadth and depth of a decades-old video store — at least not yet. Netflix’s disc rental service included 93,000 titles as of 2015 — a comparable library to somewhere like Eddie Brandt’s. But, disc rental isn’t a priority for Netflix: in 2016, they spent almost $1 billion promoting their streaming platform, but the physical rental service “doesn’t even have a marketing budget,” reports AP News.

And, even with 125 million streaming subscribers, Netflix still relies on physical media more than one might assume. AP News notes that Netflix makes “an operating profit of roughly 50 percent on DVD subscriptions, after covering the expense of buying discs and postage to and from its distribution centers…DVD profits have helped subsidize Netflix’s streaming expansion outside the U.S., a push that has accumulated losses of nearly $1.5 billion during the past five years [2011–2016.] The DVD service has made $1.9 billion during the same period, enabling Netflix to remain profitable.”

Besides Netflix’s physical DVD and Blu Ray service, the best, more accessible option for physical media rental for most is one of the 40,000 Redbox kiosks currently operating in America. While Redbox does carry many new release titles long before they reach streaming, when I looked up the Redbox closest to me in Hollywood, I found that only 168 titles were available in the machine, most of them from the last three years — not exactly an extensive selection, nor one that appeals to viewers interested in film history beyond the last decade.

The dearth of classic films and focus on new content becomes more apparent when taking a closer look at what’s available by decade on each of the major streaming services. According to JustWatch, two titles made before 1930 are now streaming on Netflix — they offer only 15 films made before 1950, 26 made before 1970, and 98 made before 1990. By streaming fewer than one hundred films to cover the medium’s first one hundred years, Netflix is doing an egregious disservice to film’s first century.

With four times as many titles as Netflix overall, it’s not surprising that Amazon Prime offers far more classic titles as well — 77 films on the platform were made before 1930; 661 before 1950; 1,292 before 1970; and 3,048 before 1990. But Amazon is the exception among streaming platforms — Hulu offers 115 films made by 1990 or earlier, and on HBO NOW, there are only 55 films that meet that same criteria.

There’s simply no question that new and exclusive content is the priority for Netflix, Amazon Prime, and Hulu. 3,155 of the 3,686 films now available to stream on Netflix are from the last ten years — 85% of their entire catalogue. On Hulu, 75% of all movies are from the last ten years too. And while Amazon Prime certainly bests all other major platforms when it comes to “old movies”, 59% of their currently streaming films are from the last ten years as well.

But, one streaming platform is prioritizing classic catalogue titles: FilmStruck, which launched in late 2016. FilmStruck self-describes as featuring “iconic films of all kinds from Hollywood classics to independent, foreign and cult cinema. As the exclusive streaming home of TCM Select and the Criterion Collection, FilmStruck is the world’s largest classic film vault.”

FilmStruck partnered with Warner Bros. to (eventually) bring films like CASABLANCA, CITIZEN KANE, SINGIN’ IN THE RAIN, REBEL WITHOUT A CAUSE, and WHO’S AFRAID OF VIRGINIA WOOLF? to a streaming platform for the first very time. Including Criterion Collection titles (which are available for a small additional monthly fee) FilmStruck’s catalogue is still growing with 1,975 titles available. But more than 86% of their library is from 1990 or earlier, providing film fans with exclusive access to essential titles that are being overlooked and de-prioritized by other streaming services.

The idea that beloved, superlative films like CASABLANCA and CITIZEN KANE can only be accessed with a subscription to an arthouse/classic focused streaming service is quite frankly insane. THE GODFATHER trilogy is now available on Netflix, but that’s only been the case since January of 2018. Even something as ubiquitous as STAR WARS is only available in its first, unedited iteration as a VHS box set from 1995 — and the original trilogy isn’t currently streaming anywhere.

And of course, most major streaming platforms are deep into the original content game. Netflix has released 25 original films and added 7.4 million new subscribers thus far in 2018 — that’s as many releases as the six major studios combined. They plan to release 80 films by the end of the year. The focus on new content creation over the preservation of and access to catalogue titles for most streaming services is quite clear.

There are many hurdles to making the classic available:

The biggest hurdle affecting deep catalogue home video releases, going all the way back to the dawn of the format, has been music rights, since from EASY RIDER onward, when pop song recordings became common on film soundtracks. Contracts only covered theatrical and TV, and even after they started accounting for home video, they didn’t factor the invention of DVD. Some of the earliest home video releases are the rarest now because they were put out before the lawyers realized you needed to make a new deal for the new media.

Now that there are only three major labels, with the downturn of physical media and the slivers of pennies that come from streaming, they and the artists they control get significant money from licensing to TV, film, and commercials, so their incentive is to take the studios for all they’ve got, feeling they have them over a barrel, since many times the songs are often so embedded in the films, they can’t be replaced, or directors won’t approve of the change. But in turn, studios are loath to pay the inflated music fees because they feel the cost spent in clearing the songs will not be recouped by whatever sales a title may have, and it’s cheaper just to do nothing.

The second biggest problem keeping movies off of physical media is ancient, expired intellectual property rights, usually involving books or plays that were originally only cleared for so many years because back then, nobody thought about repertory demand years after the fact. Warner Bros. has had a big problem with this in particular, a lot of Golden Age classics that they own — BEYOND THE FOREST, LETTY LYNTON, CEILING ZERO — can’t be cleared for video because the estates of the authors of those original source materials can’t come to terms about relicensing the story rights. This is what held up NIGHTMARE ALLEY for years, and likely also what has kept one of the greatest comedies of all time, Olsen & Johnson’s HELLZAPOPPIN’, in limbo.

Since the rise of “secondary studios” from the ’70s onward, lots of movies that went out through the majors are now reverting to other companies that are only interested in them as properties to be developed rather than preserved. Bristol-Myers-Squibb owns the original THE HEARTBREAK KID, THE STEPFORD WIVES, and SLEUTH, and they’ve done nothing with them since the early noughts Anchor Bay releases, aside from sell remake rights. We’re beginning to see that on a larger scale with Morgan Creek, Regency, Revolution, and others — the old deals are expiring, what new deals are being made are just cherry-picking the hits and leaving the deep cuts behind.

Posted in Business, Media | 9 Comments »

Amazon’s Kindle Unlimited is a boon for some authors

Saturday, July 28th, 2018

Amazon’s Kindle Unlimited is a boon for some authors:

Industrywide, self-publishing is gaining readers as traditional publishers are losing them, according to Author Earnings, a site produced by an anonymous marketing analytics expert who calls himself Data Guy. The self-published share of paid US e-book units increased to 46.4 percent from 44.7 percent between the second quarters of 2017 and 2018, Data Guy told me in an email, while the traditionally published share of paid e-book units decreased to 43.2 percent from 45.5 percent. (His data takes into account self-published and Amazon imprint-published books, which many traditional data sources do not.)

Central to Amazon’s gambit — and authors’ pay — is Kindle Unlimited. Launched in 2014, the feature was a response to other companies that were trying to create a Netflix for books, such as Oyster, which shut down in 2015, and Scribd, which is slowly gaining acceptance from the Big Five publishing houses. Authors can choose to participate in KDP Select, which automatically puts a book into Kindle Unlimited, and which can be highly lucrative. Amazon sets aside a pot of money every month that it divvies up among KDP Select authors, based on how many of their pages have been read each month by Kindle Unlimited subscribers and readers from the Kindle Owners’ Lending Library, which allows Prime members to borrow one book a month for free. The payment ends up being a little less than half a penny per page, authors told me, but those who are read the most can also get monthly bonuses as high as $25,000. Last year, Amazon paid out more than $220 million to authors, the company told me. Regardless of participation in KDP Select, authors who self-publish on Amazon through KDP also earn a 70 percent royalty on books priced between $2.99 and $9.99, and a 35 percent royalty on books that cost more or less than that.

Kindle Unlimited works in the same way as Amazon’s other big subscription service, Prime: Just as Prime users often think of shipping as free, even though they’re paying a monthly or annual fee for it, Kindle Unlimited readers may begin to think of books as free, even though they’re paying a monthly fee, because each additional book they read in Kindle Unlimited doesn’t cost them anything extra. This can be a boon for new authors: Readers who might not be willing to pay outright for books by unknown writers will read those books on Kindle Unlimited, where they feel “free.”

“I truly believe that people would not read as many of my books were I not on Kindle Unlimited,” Samantha Christy, who decided to try writing romance novels in 2014, told me. Christy’s Amazon writing career has been so successful that it supports her four children and husband, who quit his job two years ago to manage her IT, taxes, and publishing business. Christy, who typically writes three books a year, talked to me from Hawaii, where she was vacationing with her family before they were headed to Comic-Con International in San Diego to speak on a panel about self-publishing.

Kindle Unlimited has its downsides. Amazon demands exclusivity from its KDP Select authors, meaning they can only sell their books on the Kindle Store, and not on any other digital bookstores, or even on their own websites. The payment structure means that authors who produce a lot of pages, even if they’re not particularly good pages, earn more money than authors who write succinctly. Almost since the launch of Kindle Unlimited, Amazon has been battling “book stuffers,” authors who publish hundreds of pages of content in Kindle Unlimited, some of which is gibberish, some of which tricks readers into flipping to the last page of the book, so the book will count as read and they’ll get paid. Self-publishing on Amazon’s platforms benefits authors in some genres — including romance and mystery, where readers tear through books and writing them might not take a long time — over those who spend years writing novels, or who do deeply researched nonfiction books, Mary Rasenberger, the executive director of the Author’s Guild, told me.

And authors on Kindle Unlimited have to work hard to promote themselves and attract new readers in a crowded marketplace; one, I.T. Lucas, told me she works 12-hour days, seven days a week. Part of that is writing — she has published 21 full-length novels in three years — and part is marketing. “You have to be willing to run a business at the same time,” Rasenberger said. Christy tries to answer every message she receives on Facebook, does a lot of free giveaways, and frequently holds Q&As and other events. Many authors buy ads on Amazon, effectively paying their employer to get more customers.

The structure of Kindle Unlimited also means writers need to churn out a lot of content. Since 2014, Lea Robinson and Melissa King have published more than 100 romance novels and novellas on Amazon under the pen name Alexa Riley. They told me by phone that they make the bulk of their money from payments from KDP Select as people read their backlist of titles on Kindle Unlimited. This motivates them to keep producing; the more pages they have on Kindle Unlimited, the higher the chance they’ll be a most-read author, which will win them tens of thousands of bonus dollars from Amazon. Each woman tries to write 3,000 words a day, and Alexa Riley generally publishes three books a month.

Even so, King and Robinson said that writing for Amazon doesn’t necessarily feel like more of a churn than any other job would. Each writes from about nine to five each day, and never on the weekends.They both recently left their full-time jobs (Robinson in banking, King as a CFO) to write Alexa Riley books. They have a formula — sexy men, headstrong women, a happy ending — that they and their readers both enjoy. “It is a production with us,” King said. “We don’t deviate from how we write, and we know there are key points we have to hit, and we don’t change our formula.” This formula helps them, since once people discover one book, they tend to pore over the Alexa Riley backlist on Kindle Unlimited for more of the same, which brings in more income for King and Robinson. If they publish a new book and make $10,000 a month, they estimate, just $3,000 of that income comes from sales of the new book on Amazon; the rest comes from Kindle Unlimited payments.

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Google was not a normal place

Monday, July 23rd, 2018

Google was not a normal place, as this disjointed excerpt from Valley of Genius explains:

Charlie Ayers, Google’s first executive chef and, therefore, a member of an early executive team: I remember going in for an interview and Larry bounced on by on one of these big balls that have handles on them, like you buy at Toys “R” Us when you’re a kid. It was just a very unprofessional, uncorporation attitude. I have a pretty good understanding of doing things differently from the Grateful Dead—I’ve worked on and off with them over the years—but from my perspective, looking from the outside, it was an odd interview. I’d never had one like that. I left them thinking that these guys are crazy. They don’t need a chef!

Heather Cairns: I was very surprised that they hired this ex–Grateful Dead chef, since clearly everything that goes with that is coming with Charlie. Talk about a counterculture person!

Charlie Ayers: Larry’s dad was a big Deadhead; he used to run the Grateful Dead-hour talk show on the radio every Sunday night. Larry grew up in the Grateful Dead environment.

Larry Page: We do go out of our way to recruit people who are a little bit different.

Charlie Ayers: There was no under-my-thumb bullshit going on where you all had to dress and look and smell and act alike. Their unwritten tagline is like: You show up in a suit? You’re not getting hired! I remember people that they wanted showing up in suits and them saying, “Go home and change and be yourself and come back tomorrow.”

Heather Cairns: We said it was O.K. to bring pets to work one day a week. And what that did was encourage people to get lizards, cats, dogs—oh my God, everything was coming through the door! I was mortified because I know this much: if you have your puppy at work, you’re not working that much.

Douglas Edwards, Google employee #59: We would go up to Squaw Valley, C.A., and attendance was pretty much mandatory. That became the company thing.

Ray Sidney: The very first ski trip was in the first part of 1999. That was definitely a popular event over the years.

Charlie Ayers: On the ski trips in Squaw Valley, I would have these unsanctioned parties and finally the company was like, “All right, we’ll give Charlie what he wants.” And I created Charlie’s Den. I had live bands, D.J.s, and we bought truckloads of alcohol and a bunch of pot and made ganja goo balls. I remember people coming up to me and saying, “I’m hallucinating. What the fuck is in those?” . . . Larry and Sergey had like this gaggle of girls who were hot, and all become like their little harem of admins, I call them the L&S Harem, yes. All those girls are now different heads of departments in that company, years later. (A spokesperson for Google declined to comment.)

Heather Cairns: You kind of trusted Larry with his personal life. We always kind of worried that Sergey was going to date somebody in the company . . .

Charlie Ayers: Sergey’s the Google playboy. He was known for getting his fingers caught in the cookie jar with employees that worked for the company in the masseuse room. He got around.

Heather Cairns: And we didn’t have locks, so you can’t help it if you walk in on people if there’s no lock. Remember, we’re a bunch of twentysomethings except for me—ancient at 35, so there’s some hormones and they’re raging.

Charlie Ayers: H.R. told me that Sergey’s response to it was, “Why not? They’re my employees.” But you don’t have employees for fucking! That’s not what the job is.

Heather Cairns: Oh my God: this is a sexual harassment claim waiting to happen! That was my concern.

Charlie Ayers: When Sheryl Sandberg joined the company is when I saw a vast shift in everything in the company. People who came in wearing suits were actually being hired.

Heather Cairns: When Eric Schmidt joined, I thought, Well, now, we have a chance. This guy is serious. This guy is real. This guy is high-profile. And of course he had to be an engineer, too. Otherwise, Larry and Sergey wouldn’t have it.

Posted in Business, Technology | 5 Comments »

This is what charisma is like in action

Saturday, June 9th, 2018

Randall Collins explains the micro-sociology of charisma:

A charismatic leader pumps up followers with emotional energy; they admire their leader and follow willingly in his or her trajectory. Emotional dominance is a different mechanism because it operates by hogging the emotional energy. Charisma includes people rather than excludes them. Durkheim would say that the charismatic leader becomes the sacred object for the group; I would say he or she is the focus of attention that sets the trajectory of the group, filling them with enthusiasm that they will accomplish something great together.

A few brief examples. Joan of Arc led French troops to assault English fortresses, not because she was a great fighter but because she carried the banner at the front, and her followers would swarm up after her because they believed she could not fail. In quieter moments, she would display her humility as an agent of God and her personal saints, by weeping in church, so expressively that everyone else would be weeping along with her. It is no exaggeration to say that she led a procession across France of crowds weeping, and rushing behind her into battle. The shared emotion of weeping — a bodily process that sweeps one out of control — was the emotional mechanism that generated the sense of religious-plus-political trajectory.

Jesus, like most charismatic leaders, was a good observer of persons; he knew who could be moved to join him, and who had something else on their mind. Jesus always seized control of the interaction by the second conversational turn: instead of replying to what someone else said, he intuited what they meant and challenged them on it. He could turn the tables even on hostile enemies by controlling the rhythm and letting embarrassing silences work against them, then seizing the moment to make his point.

Jumping to a recent example of a dominant business entrepreneur, Steve Jobs: Jobs was not an engineer or a designer, but he had excellent judgment as to who were the most creative people to hire. He recruited them, in part, by touting the revolutionary things they would invent, and offering generous shares of the profits. Above all, he challenged them to do things that they thought were impossible; his emotional domination in arguing with his technical staff was so strong that they jokingly said Steve had a reality-distortion field.

The way it worked was by an extremely intense interaction ritual in the workplace. Steve would visit the most advanced work group, look at what they had done, and start criticizing it. His comments were crude, obscene and insulting. We might think his high-tech experts wouldn’t stand for this, that they would quit or rebel. But Jobs was not the kind of boss who walks in, shouts at his workers, threatens them if they don’t do better, then slams the door and leaves. Steve would insult them until they were really angry; then he would stay and argue with them. His persistence was incredible — he would argue with them for hours. He was famous for dropping in on people and staying up all night arguing and expounding his vision. Obviously Steve has a lot of emotional energy to be able to do this: he shows the familiar pattern of the charismatic leader who doesn’t need sleep, a single-minded workaholic who never takes a break. This high level of emotional energy is the result of constantly being in the center of successful interaction rituals. But the most energizing interaction rituals are not mere emotional dominance, where everyone else’s emotional energy is crushed. Jobs wants energized workers who share his vision, technical experts who push beyond the limits of what they had thought possible.

The crucial pattern is in the time-sequence. Steve enters, and forcefully seizes the emotional center of attention. He uses negative emotions to begin with; he gets everyone seething with the same emotion, even if it is anger at himself. He gets them into an intense argument about how the thing they are inventing can or cannot be changed in ways no one has thought of before. Let us say, roughly, twenty minutes of insulting, then hours of heated argument. Over those hours, the emotions settle down; they are no longer focused on Steve and his insults, but about a vision of the piece of computer equipment in front of them, and where they can go with it. Steve did not always win these arguments; if something turned out to be genuinely impossible, he would tacitly accept that, provided they had figured out a work-around that would get them into the territory they were aiming for.

One could say that Steve Jobs was extremely egotistical, but his ego was in his products; and these were very much the products of a team, as cutting-edge as he could assemble. His core team became so convinced that Steve could do anything that they stuck with him, even in the dark days when he was forced out of Apple by the marketing and financial managers he had brought in to handle the non-technical side. It would be superficial to say that Steve Jobs achieved success by abusing his employees. He used very confrontational tactics to stir up emotions, but his secret was that he never walked away from them: but always saw the argument through to a shared resolution.  He was an expert at provoking intense interaction rituals.

This is what charisma is like in action: it energizes a group, along a trajectory that they believe will be a glorious success.

Posted in Business, Policy | 2 Comments »

Making movies for the audience Hollywood has ignored

Saturday, May 26th, 2018

Someone is finally pursuing the obvious strategy of making movies for the audience Hollywood has ignored:

Since fleeing Los Angeles in 2015 for Texas, where he grew up, Mr. Sonnier has cast himself as the producer willing to do features that others in Hollywood consider politically radioactive. In the past year, he has wrapped production on “Dragged Across Concrete,” starring Mel Gibson as a cop accused of beating a suspect, filmed a drama about militia members, and bought a script about a school shooting in which a female student wrests control of a gun and fights back.

Mr. Sonnier’s revenues from a film are a tiny fraction of those from a major studio release, but he is making money off his strategy by keeping production costs low and relying on word-of-mouth to turn his movies into sleeper hits. With a budget of $3.8 million, “Brawl” has turned a profit, says Mr. Sonnier. He says Cinestate did it by selling distribution rights to overseas markets on the strength of Mr. Vaughn’s “Wedding Crashers” fame, pocketing nearly $2 million for streaming rights from one online service and selling more than 40,000 DVDs in the first two weeks of release at big-box stores — a healthy performance in an age when few buy DVDs anymore.

Hollywood has occasionally targeted conservative moviegoers, releasing faith-based movies in specific neighborhoods or producing patriotic blockbusters such as “American Sniper.” The difference is that Mr. Sonnier is betting a whole company on a strategy of finding consumers he says are “outside the coasts,” marrying ideology with opportunism.

“The political climate brings a spotlight to these kinds of movies. We’re not shying away from that,” Mr. Sonnier says. “It’s funny that, in this moment in time, the movies we’re making are almost counterculture.”

Other studios don’t appear to be mimicking his approach, but some recent Hollywood moves seem to affirm Mr. Sonnier’s conviction that he’s tapping an underserved audience. The revival of the “Roseanne” TV series, starring the comedian Roseanne Barr as a Trump voter navigating various social issues, was part of a strategy at ABC discussed by executives at a meeting held the day after the election about how to entertain a broader swath of the nation.

The premiere episode’s top market was Tulsa, Okla., according to ABC, where it outperformed the national average by 60%.

[...]

“Sparrow Creek,” filmed in under three weeks for less than $1 million, Mr. Sonnier says, is part of a microbudget strategy he has used to profitable effect on previous movies “Brawl” and his 2015 Western, “Bone Tomahawk.”

When “Brawl” appeared on iTunes, the prison revenge movie shot to the top 10. The other titles in the iTunes top 10 at the time, “Spider Man: Homecoming” and “Wonder Woman” among them, had wide theatrical releases.

[...]

To pay the bills, he made direct-to-video shoot-’em-up films with Steve Austin, the wrestling champion.

One day, he dropped off Ms. Gerwig at an audition for Noah Baumbach’s art-house film “Greenberg,” he says, and met Mr. Austin for lunch on Sunset Boulevard. A fan approached the wrestler, had him autograph her arm and returned to show she’d had it tattooed. “Talk about walking in two universes,” he says.

The Austin features, with titles such as “Hunt to Kill,” taught Mr. Sonnier a simple formula: budgets under $1 million and foreign-rights deals that put the project in the black before cameras roll. He deployed what he calls a “Mad Libs” plot:

“A guy named Jim/John/Jack gets out of prison/wakes up from the dead/survives and comes back to his hometown/scene of the crime/where the bad guys are and kills everyone to save his family/save himself/save someone who can’t save themselves.”

He says: “As long as we stuck to the Mad Lib, the movie sold 300,000 to 500,000 units.”

Posted in Business, Media, Policy | 4 Comments »

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