Capital Musings

Politics, Business, and Innovation

A Spreadsheet Way of Knowledge

In honour of Spreadsheet Day and the 35th Anniversary of Visicalc, Steven Levy republishes a piece from 1984, where he described how the spreadsheet was changing the business world. The piece foreshadows the rise of modern Silicon Valley: “Entrepreneurs and their venture-capitalist backers are emerging as new culture heroes, settlers of another American frontier.”

The article also shows us how costly spreadsheet errors have been practically part of the business since the spreadsheet’s inception.

In August 1984, the Wall Street Journal reported that a Texas-based oil and gas company had fired several executives after the firm lost millions of dollars in an acquisition deal because of “errors traced to a faulty financial analysis spread sheet model.”

The more things change, the more they stay the same.

Medium: A Spreadsheet Way of Knowledge

Ebola’s Economic Fallout Can’t Be Quarantined in Africa

As the IMF decreases its growth forecast for sub-Saharan Africa to 5.0% from 5.5%, Bloomberg drills down on the details, covering everything from tourism impact to companies with direct exposure in the region. Companies mentioned include: Resolute Mining (RSG), Dangote Group, Intercontinental (IHG), Marriott (MAR), Nestle (NESN), Diageo (DGE), SABMiller (SAB), and MTN Group (MTN).

Bloomberg: Ebola’s Economic Fallout Can’t Be Quarantined in Africa

Is great TV doomed to be niche?

As some viewers may be aware, summer is when the networks (even the internet ones like Netflix) are taking breaks from their anchor programming. We thought these doldrums were a good time to revisit some of the media industry’s inflection points as a way to put our era’s media disruption into historical context.

The late ’70s and early ’80s were a particularly groundbreaking time. We were digging up the archive on the NBC turnaround—in particular, Time Magazine’s “Cool Cops, Hot Show” and “Coming Up from Nowhere”—which became a commercial and critical success in the ’80s:

But Emmy winners, confoundingly, ranked extremely low in terms of raw ratings, even in this age of three network television:

Ratings notwithstanding, NBC was satisfied with these shows because they captured a more upscale demo:

Mad. Ave. ad mavens were discovering that a rule long applied to magazines–that 1,000 New Yorker readers are more valuable than 1,000 National Enquirer readers–made sense in prime time as well. Says Tartikoff: “When you pull a tab on the St. Elsewhere audience, you find that many of them don’t watch any other entertainment show on network TV. They’re well-educated, well-paid people whom certain advertisers are eager to reach because they can’t be reached in these numbers anywhere else on TV. So we can make a very good living off St. Elsewhere even though it earns only a 24 share.”

The shift in thinking from the blockbuster model to the long-tail model has reached its logical conclusion in our current era of high fragmentation.

As an example, take look at the AMC network. In upscale viewership, Mad Men ranks first with 50% of viewers having incomes greater than $100,000. And yet, Mad Men has never really had great Nielsen ratings.

Another factor leading to poor overnights is timeshifting. Viewers now have the option to suit TV to their schedule and not the other way around. And poor numbers don’t necessarily translate to poor engagement. On the contrary, viewers engaging with television much like they did with the novels and epic operas of earlier eras with a phenomenon known as “binge watching” shows viewers have amazing attention spans when it comes to great content.

In the upscale demos, the timeshifting seems particularly extreme. The Mad Men finale increased by triple-digits in key demos between the Live/Same Day (L/SD) and Live+3 Day (L+3) measurements. Compare that to mass market NCIS, whose L+3 lifts are a fraction of that percentage-wise.

Similarly, another show on AMC, Halt & Catch Fire, has had L/SD viewership dip as low as 550,000. Based upon that metric, this show should have been cancelled. However, with an L+3 timeshift bump of over 70% and ranking third in upscale viewers with incomes over $100,000 at 42%, AMC decided to renew the show.

In summary, headline Nielsen overnights mean very little when you are programming prestige television. Even the epic TV deck from Luma Partners earlier this year devoted a neglible amount of space to the Nielsen numbers.

On the big screen, one analogue is The Weinstein Company’s reluctance to give Snowpiercer a traditional blockbuster release because they were concerned audiences in Iowa and Oklahoma would not understand it.

Thirty years ago, St. Elsewhere was attracting upscale viewers other shows could not, influenced a generation of creatives, and yet barely anyone watched it. The case is the same with shows like Mad Men today, and it is arguably more pronounced. Is great TV doomed to be niche?

A few more thoughts
  • The one-line pitches of these NBC shows are simultaneously ridiculous and brilliant.
    • The A-Team: “Road Warrior, Magnificent Seven, Dirty Dozen, Mission: Impossible, all rolled into one, and Mr. T drives the car.”
    • The Cosby Show: “A black Family Ties.”
    • Miami Vice: “MTV Cops.”
  • A great sound bite, applying not just to programming, but also much of business: “All hits are flukes.”

Black Swan Seed Rounds

Sam Altman, the newly appointed President of Y-Combinator, describes the contrarian nature of his black swan seed rounds. He writes, “The most striking observation is that, in my experience, the ‘hot seed rounds’ that everyone is fighting to get in are anti-correlated with very successful investments. […] The hotly-competed seed investments I’ve made have underperformed. For all of the really good seed investments I’ve made, other investors I respected thought they were bad ideas.”

Sam Altman: Black Swan Seed Rounds

First mention of Apple Computer in 1978

An article from The Wall Street Journal in 1978 describes how investors are using computers to manage their portfolios. One of the brands available? Apple Computer.

WSJ: April 17, 1978: Apple Computer?

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