Monday, January 19, 2015

Sequels or new ideas

I was perusing Twitter, checking out the tweets of some of my favorite Tweeters, when a note from Saul Kaplan caught my eye.  He was poking fun at the prevailing need in the US to create "franchises" of successful ideas - the inevitable "sequel".  He wrote:

Sequel Nation. Windows 10, iPhone 6, Scary Movie 5.
From Saul Kaplan @skap5
Note that it is almost a given that any good product will spawn a sequel.  Whether that product is a software product (Windows moving on to its 10th "version") or a sequel of a TV show (Breaking Bad is spinning off Better Call Saul) or a movie (how many Terminator movies do we actually need?).  Just recently I saw that someone thought it would be a good idea to create the second "Hot Tub Time Machine", a movie that uses as it's central idea a bunch of morons who discover that a hot tub is actually a conduit to a worm hole that let's them travel through time.  Never mind the whole hot tub as time machine, did we really need a second one? Further, I saw an advertisement that the Odd Couple will return as a new series on CBS, with a Matthew Perry of Friends fame playing the Oscar role made famous by Jack Klugman.  So in this instance not only is the story a remake, but the actors are retreads from other sitcoms.  Given the overwhelming prevalence for sequels, we should start to investigate why there are so many, and what that means for innovation.

The rationale behind sequels

What every firm wants to create is a money making franchise that will spin out huge profits over a long period of time.  The idea of versioning or sequeling allows a company to take what was once a good idea and extend it, reaping more profits or benefits.  For strong product or good ideas, the concept of a sequel is almost a "no brainer".  You are simply building on a known success, which already has market viability and awareness. This minimizes marketing and advertising and creates links to what consumers already know.  In the minds of many execs, a sequel of an even poorly executed idea is often more promising than a completely new product or service.  Thus we are served Scary Movie 5, or a remake of Ghostbusters or Charlie's Angels, rather than completely new material.

This rush to sequels is supported by what I call the maximum loss hypothesis.  If I build on an already existing idea or franchise, I build on existing awareness and link to audience or client expectations.  While the audience may not expect much from Scary Movie 5, it knows WHAT to expect, and may already have decided that while the entertainment will be mediocre, it's worth what it costs.  Thus the maximum loss is relatively low.  If, on the other hand I invest in creating a completely new product, which the audience is unfamiliar with and doesn't link to other existing brands or products, the audience could ignore or reject it entirely, thus I lose both the investment in the new product and the opportunity cost of not investing in a sequel.  This is why we keep getting the same recycled dreck in the entertainment world, why Breaking Bad seems so unusual in a world of recurring Matthew Perry and other Friends cast spin-offs.  There's less to lose on the downside, which is accepted, along with the low ceiling that most sequels never do as well as their predecessors.

The rationale for new ideas

Genuinely new ideas are unusual and unfamiliar, and may not have the same social status or acceptance of older or reworked ideas.  Since the ideas are new, untested and unfamiliar, a larger investment in creating validity and awareness is often required.  Many corporations, in both the content world and the product world, shy away from an investment to create a brand for a new product.  It's much easier to extend a brand (Coke, Coke Zero, Cherry Coke, etc) than to create a new brand or market a new idea.  New ideas usually return only one of two outcomes:  they either strike out miserably or win big over the long term.  Note that neither of these outcomes is preferred.  A big strikeout - an investment without any return is a huge negative, as is a big return in the long term.  Most executives would rather settle for smaller, predictable returns in the short run rather than the opportunity for a larger but slower return overall.  New ideas that are really interesting or valuable take time to sell and take time to drive profits and revenue.

Thus we'll never really move all that far from the sequel.  Even firms like Apple, which seemed at first interested in "breaking the mold" are now more content to extend the brand.  The iPhone definitely broke the mold at the start, but now is satisfied to simply extend some features and add new "versions", but we're well past the risky stage.  What's the next iPhone that will disrupt the handheld market?  Will Apple create it, or will they simply version us to death?

Truly new ideas move us from certainty to a completely new insight or understanding.  They change the way channels work, the way we use products, even our expectations.  To become too dependent on sequels is to reject change.  We need new products and services, new innovation to refresh ourselves, our markets and our thinking.

We are our own worst enemy

Who is at fault for this avalanche of sequels?  We, the buying public, are.  As long as we pay money for Scary Movie 5, the firms that make decisions about which products to commercialize will create sequels.  We have far more power in this equation than you may believe.  This is a consumer driven economy, and if we consumers demand better and more interesting new products and services, the companies that create content, products and services will have no choice but to act.  So, if you want innovation, vote with your attention, your feet and your wallet.  Please do everything you can to avoid sequels and retreads.  Demand better, more interesting, more valuable products and services.  Otherwise, get ready for Scary Movie 6, coming to you in 2016.

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posted by Jeffrey Phillips at 8:51 AM


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