The case for anti-scale

Go big or go home. More is more. All or nothing. Move fast and break things. Such adages have been the foundations of Western entertainment business for decades, and understandably so, because these models have always relied on hits. Major film studios need their box office smashes; record label revenue depends on share of streams. Adding to this, the low interest rates of the 2010s fueled a decade-long boom for Silicon Valley, with startup culture focused on growing companies as big as possible, as fast as possible. 

But the world is changing in ways that are beginning to drive serious cracks in this “bigger-is-better” model, maybe for the first time in our history.

Focusing on scale at all costs worked at a time when entertainment consumption was less fragmented. Not only do today’s consumers have more choice over what they watch, read, buy, and listen to, but sophisticated recommendation algorithms actively guide them into niche scenes. Consider that the top 100 tracks’ share of total annual audio streams in the UK has steadily fallen every year, from 10.3% in 2016 to 3.7% in 2023, according to BPI’s annual All About the Music reports. No longer able to manufacture the mainstream stars their business models depend on, entertainment companies have been incentivised to chase virality – and when they do manage to capture attention, to milk it for all it is worth. 

On paper, this approach appears to be working for now. When the Stanley tumbler had its moment, CNBC projected that annual sales would jump from $70 million to $750 million. Brat summer was the arguably most notable mainstream cultural moment in years, and Wicked, with its unavoidable press tour, was considered a box office hit. But look closer, and the bigger-is-better mentality comes with serious risks.

“Scaling up”, even quickly, used to mean years — during which entertainment brands / music artists could still build loyal, core customer bases or audiences. Now that “overnight success” is no longer a figurative expression, but a literal description, products can easily burn through those customer bases too fast and skip over the process of building longer-term loyalty. MIDiA has likened this process to overharvesting: stripping a resource to the point where it can no longer regenerate. But another apt analogy is overtourism, which wrecks local communities and ecosystems, often to the point where there is little left worth traveling for. The trend cycle is quickening, leaving audiences exhausted. Just ask the TikTokers leading the platform’s latest trends: underconsumption and de-influencing.

If an entertainment brand with an existing loyal audience scales up too fast, the original audience can feel betrayed, forgotten, or perhaps worst of all, disinterested. This is especially true when “trending” songs, films, or other cultural moments reach the final stage of the hype cycle: corporate takeover. According to MIDiA’s Q3 2024 consumer survey, 59% of 20-24-year-olds in the US (one of the more lucrative demos for the entertainment business) say they prefer to listen to music and artists who are not well-known or mainstream, and 38% say that when a lesser-known artist they like blows up, the artist no longer feels special to them. In other words, blowing up can mean acquiring a larger, but more fickle, new audience at the expense of the smaller, but more loyal, one.

Finally – and paradoxically – the rare cultural moments that do capture the mainstream today are often made so ubiquitous that people do not feel the need to actively participate in them at all. You did not need to listen to Brat to be part of Brat summer; you only needed to swipe as the TikTok algorithm served up any of the 163,000 posts tagged with the name, or browse any of the dozens of businesses that incorporated its particular shade of green into their products and marketing materials. This may partly explain why, according to MIDiA’s Q3 2024 survey, 84% of US consumers who are “a huge fan” of Charli XCX said they engage with her on social media — but only 36% said they listened to her music in the past week.

Similarly, plenty of people might have gotten enough satisfaction from Wicked’s widely-shared press campaign clips and fan commentary that they did not feel the need to see the two-hour-and-40-minute film. This is especially true in today’s attention-saturated economy, where audiences are looking for shortcuts to stay tapped-in to the zeitgeist. Content surrounding a brand, including fan-created content, used to be chalked up to free marketing for the core IP – and for a while, it was. But these days, that content is competitive. Consider YouTube’s 2024 Culture & Trends Report, where 66% of gen Z Americans surveyed agreed that they often spend more time watching content that discusses or unpacks something than the thing itself.

As a result of all of this, we are at the very beginnings of a much-needed business strategy reset. The cultural movements that “go viral” – whatever that means anymore – are already on their way out; the long-term, sustainable successes will be those which remain tapped into the underground. 

Commercialising this shift means flipping established business practices upside down – prioritising long-term, sustainable, brick-by-brick growth over impressive short-term virality, and monetising depth of connection, not just scale of audience. Such an approach directly conflicts with the ongoing financialisation of entertainment, where investors have been conditioned to expect supercharged growth. But yesterday’s strategy is quickly becoming not just dated, but arguably counterproductive.

The good news is twofold. Thanks again to the internet, scenes that were once considered too “niche” can achieve enough scale to support viable business models, while still feeling relatively underground to members. Consider that there are an estimated 22,000 YouTube channels with over 1 million subscribers apiece (according to Dev Shed) – though odds are, you have never heard of the majority of them. The problem is not growth itself, but rather the forced emphasis on scale at an unsustainable pace that is making it hard to develop valuable products with loyal, sustainable audiences. Rather than top-down talent rosters that rely on one or two superstars, entertainment businesses of the future will nurture many, smaller, cult successes with loyal scenes around them. A24 is a good example – even after several big investment rounds, the indie film studio has largely stuck to its strategy of spreading bets across many, smaller-budget films targeting specific niches.

Secondly, this approach gives us the freedom to return to a much simpler focus: making the best art possible, allowing scenes to spring up organically, nurturing them, and letting sustainable income result. We are still very early in this shift, and for now, many entertainment businesses can continue to milk their catalogues of mainstream hits from the previous era. However, the future will require a reset, and the case for anti-scale is building the same way today’s businesses should: slowly but surely.

In February, MIDiA will publish a pair of reports delving deeper into scene-focused entertainment strategy, and the behaviour of superstars’ superfans. To learn more about these two reports and how you can access them, reach out to enquiries@midiaresearch.com.