Harry Potter - Darker side of super-star brands

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Came across this interesting research on Harry potter and its economic impacts.

This throws some light on how a brand which breaks through all sorts of market rules and becomes not a hit but a rage, can be counter productive to so many parties involved.

First a brief note on concept of Harry Potter - Harry Potter is a series of seven fantasy novels by English author J.K. Rowling. There are 6 novels released so far. Seventh and last one is due for release on 21st July 07.

Now the economics of it - Due to success of Harry Potter novels, Rowling has become the richest author in literary history. For the seventh and last novel, publishers have announced record breaking 12 million copies for first print run IN THE US ALONE !!! And just out of curiosity, I checked the sales rank for this book, and its already ranked one on Amazon.com even before its released !! Confirm here. I was more amazed when I compared it with all time non fiction classic How to win friends and influence people by Dale Carnegie. This all time classic book was first published in 1937 and has managed to sell around 30 million copies worldwide!! The Previous 6 editions of Harry Potter series have sold 350 Million copies worldwide!!

And we have not even started to talk about the money raised through making movies and video games and other means like merchandise and about 400 products licensed to use Harry Potter brand. This makes Harry Potter brand worth an estimated 4 billion USD! Compare it with brand value of world famous brands like Starbucks (3 bn USD), Adidas (4.2 Bn USD). ( See World's top 100 brands List )

So, we can safely call harry Potter a super star brand which has only brought riches to those involved with it in any way. Right? Wrong.

Go back to the Newsweek article I discussed in the beginning, it gives some startling facts about how this super brand is making people loose money:

1. Retailers, spellbound by the chance to reach millions of Potter-obsessed customers, are cost-cutting for market share to the point where many stand to lose money.

2. Shareholders, who have seen the share prices of these publishers, movie maker companies. swinging from one extreme to another. See comments from market analysts for Scholastic Corp. (SCHL ), which has U.S. rights - "The children's book division often does better in off-Potter periods. "The company tends to lose focus in a Harry Potter release year". And now imagine the share price of this company after the Harry Potter series ends with this coming book.

3. Amazon.com concedes that the company won't make a profit from the new Potter book. But it has racked up more than 1 million pre-orders so far--and, Amazon hopes, plenty of new customers will buy other books on their order where they would be able to make profits. So can we call Harry Potter a loss leader for them?

4. Britain's bookmakers, famous as they are for all sorts of bets, are now taking bets on whether Harry Potter will be killed in this last book. Imagine how many people will loose money.

Apart from the economic loss, it has critics claiming that its putting the whole new generations into a 'witchcraft mindset', specially because most of its customers are in a impressionable age.

So, though this brand has brought money and lot more for few, many other actually suffer because of it. This is applicable to any brand which grows beyond a certain point defying all sanity. A company might not loose in short run, depending heavily on one super brand is sure shot way of loosing ground reality.

Virtues of the "Middle Path"

Just read this interesting article by Ex BBC Correspondent Mark Tully about how Indian culture has mastered the art of adopting middle path in life and how west can learn from this unique quality.

I think in this age of contradiction and competition, there is more scope for middle path to help us lead better life and make this planet a better and safer place than it is today.

For starters, how about applying this principle of middle path on environment.
So many talks have failed on global warming and in fact have added to tension between developed and developing countries. Where as developed countries are asking for everyone to reduce the greenhouse gases and other factors contributing to global warming on equal basis, developing countries like India and China are claiming that they are still in early stage of economic development and hence they can’t do as much as developed countries who should take the lead. They in fact claim that their per capita pollution is less than developed countries e.g. America. But I think growth without care of environment will lead to disaster. China is adding 2 coal-based power plants every week!! And I think here comes the middle path as saviour. How about developed countries taking the lead in reducing global warming and agreeing countries like India and China to carry on with their development but invest in counter measures as well e.g. growing the tree plantation rate, better fuel quality, more alternate sources of energy and bringing in stringent standards around environment.


Take example of economics we started on a kind of socialism got little success and went almost bankrupt. We than declared out love for pure capitalism which did not work either as seen by downfall of BJP government despite ‘India shining’ claims. Now government is talking about the middle path – reforms with human face e.g. rural employment guarantee schemes and other inflation control measures like now allowing petroleum products to be fully liberalised.

And look at our foreign policy, we neither supported the United States nor openly criticized it for its aggression against Iraq, India's government has taken what it calls the "middle path". Mostly this approach has served us well.

Take example of common man, while we are all adapting to the new culture resulting from globalization, while we are indulging ourselves in virtues of capitalism, we still seek spirituality. I specifically liked few examples Mark gives in his article. How will you explain the rise and rise of so many spiritual gurus from big ones to small timers. How will you explain more and more people visiting holy shrines from Vaishno Devi to Thirupati Balaji? In west they are facing a big problem in convincing the younger lot to come in the church.

Dalai Lama sees middle path as the only solution for Tibetan problem. In fact this great philosophy of middle path can be termed as the foundation of Buddhism.

While no policy or principle can be applied successfully in ALL circumstances, we have shown the world that middle path is the way to go. Next time when someone discusses Indian culture and it contradictions, make it your duty to correct them and explain that Indian culture is about taking the middle path. We have a proven theory here with many examples as above. Some bigger political problems of the world could be solved if someone genuinely understands the meaning of middle path and act on it. But then for some culture it could be sign of indecisiveness and weakness, though we know its not correct.
Nevertheless, next time you have a crisis/issue/problem at home or workplace, try adopting the middle path, you might get surprised with its effectiveness !!

Five days weekend?

Just came across this interesting idea of five day weekends (who wouldn't like it?) and their sales pitch has a compelling argument.

Since world war II, Americans have worked more each year then the previous one. I am sure things are not better in many other countries, in fact in many developing countries it will be worse. So much so that employees are not even able to take the basic number of entitled holidays. And even on the weekends, how many of us don't work at all?

So, have things gone too far? Is it not surprising that with so much of technological advance to bring in efficiency in our workplace, we feel more inefficient year after year. Its like supporting the Moore's law which predicted that each year the number of transistor will double on a chip while its size gets halved. And this might have increased the efficiency and productivity in absolute terms, we are getting unhappier, more stressed with each milestone towards achieving efficiency.

One reason of the mounting stress level, as famous productivity guru David Allen describes is that the actual nature of our job has changed dramatically then have our training for and our ability to deal with the work.

Talking about nature of work, from working in the farms where the work could be quantifiable (e.g. how much land to plowed, cows to be milked etc) to manufacturing work where we still had control over the quantity of work, the current nature of work for most has been shifted towards being knowledge worker which, due to its vary nature, allows us to filling any amount of time available to one.

This unique nature of knowledge work has led to many process oriented standards evolving to ensure quality of the work (CMM, ISO, BS, ITIL, etc etc). However, though we have done a lot to ensure the quality of this new kind of work, there has not been much, if any, effort to regulate or standardised the knowledge worker's work environment and working hours.
So a 5 day weekend might sound absurd, but I think, it at least forces you us to look at the way we are getting detached from everything else than work. Think about it and start making a noise, not about a 5 day weekend if you don't like the idea, but at least about making things better at work and bringing some sanity in the ever increasing work hours.

What makes an idea or product tick

Just been tracking the sudden rise of Gujjars’ reservation demands (affirmative action for quota in jobs, educational institutions etc.) in India. Even when I come from the area where they have strong presence, I never heard of this demand before and was wondering what has suddenly triggered it to be such a burning issue, overnight.

This prompts you to think how one idea or fashion trend or a potentially dangerous disease spread suddenly while others don’t? What triggers them? How can one particular colour or a movie or hairstyle becomes fashion statement? Why some product or service captures the imagination of so many people while others, equally or more promising ones fail?

This fascinating book – ‘The Tipping Point’ By Malcolm Gladwell gives some riveting explanation on such questions.

Let me summarize how this book explains it.

Any idea/product/fashion trend can be equated to epidemics and to affect a wider population, it has to achieve what is called a Tipping Point.
i.e. various small factors work together to bring about a massive change in people behaviour.
Successful ideas, have three primary characteristics, like a epidemic1) contagiousness 2) rapid change 3) small changes can have big effects

And who actually can help you in making ideas or products achieve tipping point?
For any idea or product or service to be successful, it needs 3 types of key people.


Connectors : People with special gift for bringing the world together. i.e. they know lots of people. If you want your idea, products to achieve tipping point, connect with as many people as you can. And here we are talking about being acquaintances, not close friends. And more connectors you meet, bigger the area of influence through these connectors. It’s like atomic chain reaction. The closer an idea or product comes to a connector, the more power and opportunity it gains !!


Mavens: The ones who accumulates knowledge and are equally interested to distribute that knowledge to others. Mind you, they are not persuader but their intention is to educate and help out of their own will. E.g. some key people would have got convinced about the viability of open source software and they would have enthusiastically told others before it picked up momentum. Or what about some famous bloggers who get a high feeding others with knowledge?


Salesmen: And they do the work pf persuasion. One example I can think of the way Bush and Blair sold about Saddam having WMDs (Hey, you all believed it at that time though you may not think of them good salesmen now)



And the more you read about this current Gujjar reservation issue or Blogging phenomenon or any new trend in fashion, the more you will recognize the importance of these three factors in achieving their tipping point.

So, the key is to identify the mavens, connectors and salesmen and then depending on whether the idea/product/issue is positive or negative, we can either encourage these three factors or we contain them.