In the Economist, "Schumpeter" writes: "Flops are part of business life. They are most conspicuous in the entertainment business, where public taste is hard to predict. But you can find them in any industry that depends on launching products and generating buzz."
There are three principles that, over the years, have been shown to practically GUARANTEE failure. The first one is, "slaughter a sacred cow." The most spectacular example of this was Coca-Cola’s decision to create "New Coke" in 1985, because it was worried about Pepsi Cola's growing market share. They made Coca-Cola sweeter, but ended up almost killing off the drink that had made them famous. They quickly backed off and now New Coke is nowhere to be found (are thousands of cans of it stored in a warehouse somewhere?)
The second principle: "Mix oil and water." "Schumpeter" writes: "Theatrical impresarios are the masters of this--over the years they have tried, unwisely, to turn Hamlet, Lolita and Ernest Hemingway's drunken last days into musicals."
Third: Produce a genuinely awful product. The writer mentions the Ford Pinto, which often caught fire, as well as Microsoft's Vista operating system, which was incompatible with every other program.
"Schumpeter" thinks that movies are the most infected with these problems, because there seem to be more flop around than in previous years: Seven of Hollywood’s ten biggest flops, adjusted for inflation, have been released in the last 12 years.
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