On gloom...

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I was corresponding with an acquaintance in the digital media world – the founder of an Emmy Award-winning software company – recently, when he compared me to Gerald Ratner.

For those not in the know, Ratner was the CEO of an eponymous chain of jewellers, a group that included brands like H.Samuel and Ernest Jones. The company’s philosophy was simple: cheap, high-street jewellery for people who aspire to shop on Bond Street but cannot, currently, afford to. And Ratner made a fortune peddling this ware, everything from watches and necklaces through to glassware and home furnishings. Stuff that looked gaudy, but was actually cheap as chips.

And then, when addressing the Institute of Directors in 1991 he made the following statement, which will be his legacy:

“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, "How can you sell this for such a low price?", I say, "because it's total crap.""

Overnight, the value of the Ratner Group dropped by some £500m. The next year, Ratner’s new chairman dismissed him the company, and the following year the Ratner name was dropped altogether, and they became the Signet Group. Now, Ratner is mainly used as a case study in A-Level Business Studies classes for why you should watch what you say, especially about your own industry.

Of course, Ratner was only making explicit (and doing so rather bluntly) a fact that the Ratner Group’s shareholders, if not its customer base, knew. It was the model upon which the whole business was predicated. Cheap materials sold at affordable prices; a naff facsimile of luxury goods. I’m sure that plenty of people were saying this about the company, either in the press or just away from prying ears, but once it had come out of the mouth of the CEO it became true. Ratner Group jewellery when from being a glittered turd to just a turd.

This is not wildly dissimilar to the Stuart Kirk affair which occurred last year, where Kirk, the Head of Responsible Investing at HSBC, gave a speech in which he offered an equivocal take on climate change and the ESG investing fad which has swept through the world of corporate finance in recent years. “There's always some nut job telling me about the end of the world," he told a Financial Times conference. Unsurprisingly, he went the way of Gerald Ratner.

It is very hard to pour cold water on your own industry, but it’s a necessary evil. Because no-one outside an industry will ever understand it like the people in it. Positivity and evangelism pays better, it pleases existing investors, but it rarely tells the whole story.

The reason I was compared to Ratner was because I wrote a piece called “2022: The Year Podcasting Died” which continues to haunt me. This week I wrote another piece, following up on that and responding to a lot of the comments that the original piece. I didn’t change the thesis at all, though I acknowledged (in true Ratner form) that the title had been a touch sensationalist. The next day I saw this included on PodNews, an industry-wide newsletter sent by Australia-based analyst James Cridland to, apparently, 26,000 people:

“Nick Hilton, who claimed that podcasting was dead at the end of last year, admits in a follow-up that the title was because he “wanted people to click on the article”. After landing a guest spot on a BBC Radio 4 show to opine about podcasts (more than we’ve done), and being mentioned in a Bloomberg article (we’ve managed that at least), he admits that he “doesn’t really think that podcasts are dying”, adding that he would quite like you to subscribe to his newsletter. We’re taking notes at his clever customer acquisition scheme; but would also like to congratulate Maria who became our 26,000th subscriber yesterday in spite of boring article titles like “no, the number of new podcasts are not really plummeting”.”

Seeing this made me feel a touch like Cassandra, rejected by the Trojans. The reality is that you can spin data-points in whatever direction you want, and people tend to choose the direction that’s personally advantageous. So, for me, the most advantageous thing to do would be to pretend that podcasting is a hugely effective communications device and that it’s going great guns. And I could find the data set to support that.

But I won’t do that, because I do think that the future of digital media depends on having an open conversation about where we go next. I’m not relentlessly gloomy, I’m just realistic – and this newsletter is all predicting the future and helping people arrive there faster.

Gloom is good, I think, but now I need to work on a few solutions.

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