Saturday , November 28 2020
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American Idol

Summary:
To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever. An 89 year old man who hasn’t gotten a haircut in months sits at the dais, alone, accompanied by a hotel ballroom all-purpose drinking glass filled with Coca-Cola and a stack of printed slides. The slides are text-only, black font on stark white. No frills.The speaker is the most legendary investor and business personality in the world. His financial conquests have accrued an almost mythological tincture in their telling and retelling over the decades. He is Daedalus, having built a labyrinth of intersecting interests from insurance to electricity, and then a pair of

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American Idol

An 89 year old man who hasn’t gotten a haircut in months sits at the dais, alone, accompanied by a hotel ballroom all-purpose drinking glass filled with Coca-Cola and a stack of printed slides. The slides are text-only, black font on stark white. No frills.

The speaker is the most legendary investor and business personality in the world. His financial conquests have accrued an almost mythological tincture in their telling and retelling over the decades. He is Daedalus, having built a labyrinth of intersecting interests from insurance to electricity, and then a pair of waxen wings to fly above it all, with just a few dozen employees and contracts written on cocktail napkins. He is Midas, touching afflicted financial corporations in a time of mass insolvency with his rescue money and, more importantly, his imprimatur. One-eyed Odin sitting beneath the eaves of Yggdrasil, having paid a bodily price to have drunk from the Well of Wisdom. He is the Oracle, with tens of thousands braving the journey and the Omaha Embassy Suites to hear his annual pronouncements. …

Anyway, the old man spoke on Saturday. For a long time. The sparsity of text on each slide was in no way a signifier of whether or not he had much to say. Buffett was, as always, loquacious and brimming with interesting statistics – American history, market returns, inflation – turns out the Louisiana Purchase, at just 3 cents an acre, was an absolute steal.

But it wasn’t the same.

Josh Brown, This Version of Warren Buffett

Warren Buffett is the American Idol of investing. He is, as Josh Brown puts it so well here, an impossible combination of Daedalus, Midas, Odin and Oracle. He is a mythic figure, with a public persona and legend that goes far beyond his considerable investment skills.

Warren Buffett is a performer. That’s not a knock on him. Not at all! Public performance is what is required to be a mythic figure. Public performance is what is required to evolve from just a really good singer, someone who can hit all the notes, into someone who transcends mere singing and becomes an American Idol.

Really good investors – like really good singers – are not exactly common, but they’re not exactly rare, either. Transforming yourself from a really good investor into a Great Investor, on the other hand … well, that IS rare. And it only happens through the active creation of a personal mythology. It only happens through public performance.

There is no more powerful venue for public performance than a live audience.

This is how legends are made, whether you are a singer or an investor or a politician. This is how you build a following, not in the sense of casual fandom, but in the sense of zealotry. This is how Warren Buffett used the Berkshire Hathaway annual shareholder meeting to transform himself from a really good investor – probably a great investor – into a Great Investor.


American Idol
American Idol

Looks like fun, right? I’ve never made the hajj to Omaha myself, but I know exactly what it feels like. It feels like an SEC football game. It feels like a performance at the Apollo. It feels like a campaign rally. It feels like an inauguration. It feels like a papal sermon in St. Peter’s Square. It feels like a Veterans Day parade.

It feels AMAZING, and that’s true whether you are there in person or watching on TV. It’s better in person, for sure. But it’s not bad on TV.

So what happens when you take the live audience away from a great performer like Warren Buffett?

We, the audience watching from home, don’t think the performance is as good.

Not because the actual physical performance is any different! But because we, the audience watching from home, no longer have the cues to tell us how wonderful the performance is. The crowd can no longer watch the crowd, and that means everything for how the crowd consumes the performance.

This is why sitcoms have laugh tracks. This is why executions used to be held in public. This is why coronations and inaugurations still are. This is why, more than 25 years later, China still prevents any images of the protest crowds in Tiananmen Square from getting on domestic Internet sites. This is how riots start. This is how cathedrals are built. It is the power of the crowd watching the crowd, and for my money it is the most powerful social force in human history.

When the crowd can’t see the crowd, the crowd loses its interest in the performance. We get bored. We tune out.

Like Josh says, it’s just not the same.

Here, I’ll prove it.

In mid-March, the producers of American Idol made a tough decision. Just as they were about to begin their live performance schedule in Los Angeles, where the 20 Idol wannabes would be whittled down week by week, COVID-19 lockdowns made it impossible to maintain that production model. Rather than cancel the season altogether, the producers decided to retool with two weeks of filler material focused on the contestants’ backstories, followed by a resumed competition filmed at the contestants’ and the judges’ homes.

So we went from this in the 2019 American Idol season …


American Idol

To this in the 2020 season …

Where the contestants literally sing to the camera from their living room or garage, and the entire show takes on the production values of a Zoom conference call.


American Idol
American Idol
American Idol

To be clear, the actual singing is terrific! Seriously, there’s a ton of talent (diverse talent, too!) on this year’s show. The backing musicians are AMAZING, and the acoustics are not as bad as you would fear. No idea what sort of mixing or editing technology is required to make the final product turn out as well as it does, but the producers deserve a lot of credit here.

There’s just one problem. We, the television audience, think it sucks.

I compiled the apples-to-apples ratings data for the first twelve episodes of the 2019 and 2020 American Idol seasons (Sunday night to Sunday night, same network, same time slot), both on absolute numbers of viewers and the 18-49 year-old demographic (which really drives the economics of these shows). The line drawn between after the May 5, 2020 episode is when the production formats for the 2019 and 2020 seasons diverged.

With the elimination of a live audience format, year-over-year ratings have collapsed.

Seriously, with these ratings I’ll be surprised if this season of American Idol isn’t canceled before they crown a winner. Yes, the show still holds up pretty well against its time slot competition, but this just isn’t viable for whatever budget and projections ABC had coming into the season.


American Idol
American Idol ratings by episode, 2020 vs. 2019

Take away a great performer’s live audience, and you take away their source of narrative power.

That’s true for American Idol. That’s true for Warren Buffett. It’s also true for Donald Trump.

You think Trump is happy to replace his live audience campaign rallies with televised press conferences? You think he doesn’t realize this is killing him politically?

American Idol
American Idol

Whatever you think of Donald Trump, if you don’t realize he is a great performer and a master of the Common Knowledge Game, you’re just not paying attention. Without live performances, he loses a major power source for the November election.

I think this is a big reason why Trump is pushing so hard to reopen battleground states.

And one more thing …

If any of the sports leagues are contemplating TV audience-only competition, my advice is to think again.

The power of the crowd watching the crowd is also true for sports leagues. Maybe more true for sports than for any social function other than war. Without a live crowd for the TV crowd to take its cues from, the TV crowd will quickly lose engagement and interest. Regardless of the level of competition, a disembodied audience is a bored audience.

And that’s the only true death for any performer in any field. That’s the only thing you can’t recover from in the modern age. Boredom.

Welcome to the age of bread and circuses, my friends. Same as it ever was. Especially here in the age of COVID-19.


About Ben Hunt
Ben Hunt
He is the chief investment strategist at Salient, a $14 billion asset manager based in Houston and San Francisco, and the author of Epsilon Theory, a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators read Epsilon Theory for its fresh perspective into market dynamics.

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