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Katy Perry's Sharks Are Doomed: the Economics Behind the End of the Mainstream

A rule in economics explains the halftime show's diminishing returns.
Katy Perry. Image: ​nicoleearl/Deviant Art

​In America, we can make trucks that millions will buy and hamburgers that billions will buy, but a Super Bowl halftime show featuring some of the biggest names in music and invoking one of the most popular book-and-movie franchises ever is sniffed at as "unlikely to be ranked among the more memorable game breaks," as The Hollywood Reporter writes. Every year, we fight over the merits of ads and halftime shows—which is odd, because the ads and halftime shows are designed to appeal to as many people as possible.

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Economists have a way of explaining why something that is designed to appeal to everyone can become less appealing to anyone in particular. It's called Hotelling's Law. It may explain why all the tools of late Fordism—the focus group, data analytics and polling—work for politics and consumer products, but fail when it comes to the arts.

The essence of the law is the "principle of minimum differentiation," which states that rival sellers will gravitate toward each other in price, location, and products, in order to reach the most people. Imagine two ice-cream vendors on a 100-yard beach. They offer the same flavors at the same prices, so sunbathers go to the closest cart. If sunbathers are evenly distributed, where should vendors set up their carts to get the most customers?

At the 25 and 75 yard line, no one has to walk more than a quarter mile for their ice cream, and the vendors each attract half the beach. But vendors can cut into the competition by scooting to the center—because they're still closest to everyone on the outside, and are now closer to some of the competition's share too. The vendors both, eventually, end up both at the 50 yard line.

"In the end, by moving to the middle the vendors haven't gained anything—they're still both serving just half of the beach," writes Andrew Boyd, a University of Houston professor. "But look what's happened to the sunbathers. Now a lot of people have to walk more than a quarter of a mile. Some have to walk as far as half a mile."

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So the appeal to all becomes less appealing to people on the ends of the beach, who have no choice but to walk all the way to the middle. Of course—and this is the catch—they have no alternative.

The same principle can be used to explain why Republican and Democratic nominees for president all become indistinguishable.

In the arts, taste is unevenly distributed. Shooting for the middle may have worked in the past, but when two Russian artists made paintings based on what people said they liked, the results were unappealing.

Vitaly Komar and Alexander Melamid, after moving from the Soviet Union, recognized that polls are how the rulers of American society hear back from the people. If you want to produce a "people's art" that actually appeals to people, why not just ask them what they like?

They hired a professional opinion research firm in order to "somehow to penetrate [Americans'] brains, to understand their wishes," as Melamid put it, and then make paintings based on the results.

Americans, according to 1,000 phone surveys, prefer blue, wild animals, non-religious imagery, historical figures, and realistic art over abstraction. The resulting painting, America's "Most Wanted," looks like this:

Like the Katy Perry halftime show, the imagery has a real "see what sticks" quality, with deer and vacationers in place of sad-eyed beach balls. Note George Washington.

When something is made to have the broadest appeal—like these paintings done by Komar and Melamid or a halftime show—it ends up being something hardly anyone really likes. The center of the beach cannot hold.

Hotelling's model is based on the assumption that options are strictly limited, Caitlin M.K. Myers, an economics professor at Middlebury College, told me in an email. In the beach example, the rule can be disrupted by something as simple as a third ice cream vendor. Homogeneity makes the most sense for sellers when the options are most limited, like choosing among movies at the movie theater or at the height of the Big 4 era of music.

"If you go to a theater, you're picking from a set of movies that are all priced the same. Presumably customers pick the one that is closest to their taste, which could explain big studio movies being rather homogenous," Myers pointed out. "Homogeneity is a charge that is also lobbed at pop music. Perhaps in that market consumers will listen to something, and for decades at least record labels had a lot of control over prices. So they ended up pumping out a lot of really similar music, even though society would be better off with greater diversity."

Of course, in the case of music, people figured out that they could get music closer to their own taste, and "the mainstream," where all the songs are informed by market research and increasingly sound the same, is running dry.

These days, the center is just too far for most people to go. With so much ice cream on the beach, it's not surprising that Katy Perry's performance didn't exactly melt everyone's popsicles.