Letterman and shock culture: Structure, Conduct, Performance

It is a far stretch to insinuate that Mr. Letterman, that avant garde man of letters, in any way engineered the current frakas.

That said, weird as it is, he likely to benefit in the ratings game.

In one of its accidentally successful frameworks, McKinsey came up with the SCP idea to aid Industry Analysis--
(S): Structure: A structure, decided by policy, costs and norms, exists in an Industry. The global steel Industry has huge economies of scale, is faced with buyers that can play on supplier against another, and ore is located far from demand, forcing advantage to mill owners who can buy vast volumes from mine owners and feed it to operations world wide-- it is a structure that favors scale and cross-globe holdings. The Entertainment Network industry has a structure where 70% of eyeballs are attacted by 10% of shows. Loyalty for a successful show can be high if a successful formula and personality are found, eyeballs dictate revenue, and these eyebalss allocate attention by shock value

(C): Conduct: Industry structure drives the conduct of players. The global steel Industry has a structure that favors scale and cross-globe holdings. The Entertainment Network industry has a structure that allocates attention by shock value of conduct. So, steel magnates have tended to consolidate capacity and huge, multinational M&A is common. In entertainment industry, networks seek programs that can shock. Late night shows, more insulated by the norms that look askance at exposure of the young'ns to debauchery, are more free to satisfy this demand for shock.

(P): Performance: How players in an Industry perform is driven by their conduct. Steel Industry has very volatile earnings (performance is cyclical)-- the London Metal Exchange can supply the spot price for steel, making price transparent, and mill owners price takers. Supply-Demand balance dictates price almost entirely. That and fuel cost, but that is baked into all commodities.

The Entertainment industry has become progressively more raunchy. Accidental dissolution too brings disrepute, notoriety, and eyeballs. Eyeballs rule.

So, while David didn't mean for it to be so, his misfortunate dalliance would probably accrue a fortune for his sponsor network. Sphere: Related Content