Shailesh Kapoor: Should 30% Success Rate Still Be Acceptable?

18 Sep,2015

By Shailesh Kapoor

 

Over the last decade, the entertainment business has started attracting more senior talent from outside than ever before. The industry has been able to match the pay packages offered by FMCG and telecom majors at senior levels, though a fairly wide gap remains at the entry level. Many have also moved because of their inherent passion for the media and entertainment business.

 

Anyone who joins the entertainment business from a more traditional industry first observes the alarming difference in the product failure rates of the two industries. In the entertainment business, if you get even 30% of what you launch right (read: It doesn’t lose money), you are a champion. In any self-respecting FMCG company, that could mean you have to look for another job very soon.

 

Several arguments, in the ‘apples-to-oranges’ domain, are given to justify why we should not compare failure rates in the two industries. In many ways, a myth has been propagated over the last two decades that the process of consuming entertainment is a lot more complex than that of consuming a conventional consumer product, and hence, it is difficult to ascertain what the entertainment consumers want and what will catch their fancy.

 

I must mention that not all propagators of this myth are ‘old school’ in their thinking. Several are, in fact, fairly liberal in their thinking, making films and TV shows that challenge the status quo. But it’s the lack of an understanding of the other side (the classical marketing side, a la FMCG) that comes in the way.

 

With ‘outside’ talent entering the industry, things have changed, albeit slowly. A simple way for us to assess that by knowing how many programme concepts, pilots, scripts and films are being tested with consumers before critical business decisions related to them (go or no-go, budgeting, slot, release scale, etc.) are taken.

 

The number of television concepts tested using Ormax True Value, our content testing tool for broadcasters (predicts on-air performance, specifically the steady-state TSV), has been increasing by 50% year-on-year since 2009. Similarly, the number of films we test using Ormax Moviescope (predicts lifetime box-office)has been doubling year-on-year since 2011. Script-testing for films was non-existent till as recently as two years ago, but there is increasing interest in it today.

 

Interestingly, many television concepts that do not test well are still being put on-air. Sometimes, this decision has already been taken, and the testing is done to validate the instinct that led to the commissioning decision. When the results are positive, it’s celebration time. But when they are not, it’s a case of hoping that the research is proven wrong. It’s what I like to call ‘The Hope Strategy’. Even a marketing intern will tell you it’s not the best strategy for a brand that aspires to be a leader in its category.

 

But ‘The Hope Strategy’ is still better than the one that’s based on no consumer information at all (that’s the ‘Hopeless’ one). To that extent, we have made some progress. But there’s a while to go before we can match up to the best in the marketing world on product success rates. There’s a while to go before the acceptable success rate increases from 30% to at least 60%.

 

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