September 11, 2017
Mega-successful McGregor a model for our economyPosted in Irish Independent · 131 comments ·
The extraordinary pulling power of Conor McGregor can be measured in a few ways: by ticket sales, by pay-per-view revenue, and by endorsements. However, a much more instructive modern metric is the use of pornography. And it looks like McGregor porn beats regular porn hands down!
According to ‘Men’s Health’ magazine, during the McGregor fight, Pornhub (an American porn site) saw its traffic plummet by 21pc in the US alone. World traffic was down by 12pc, while here in Ireland, porn traffic slumped by 11pc.
Once the fight was over, normal service was resumed.
Pornhub’s data indicates that US porn traffic levels rose swiftly between midnight and 1am, hitting their peak around 2am. And, here in the land of saints and scholars, the post-fight relief was explosive.
Let’s just say Irish private web browser windows were busy. Irish porn traffic shot up to 174pc higher than average levels in the hour after the fight. This suggests a novel 21st century take on the expression “drowning one’s sorrows”.
If Conor can alter the porn habits of Irish men and women, he’s much bigger than you even imagined.
And here’s the interesting thing: McGregor understands the game he is in. He is in what economists call the “winner-takes-all” market. He knows that being at the top is where you make the lolly. This doesn’t mean he is much more talented than the guys behind him, it just means when you are at the top, you have to go for it and you can make multiples of the guy behind you.
So in terms of talent, Conor (despite the public bravado) would probably privately admit that there’s not a huge amount between him and other fighters below him. They are all good fighters. But he is the superstar and that’s the difference.
He has harnessed the technology, the media, the celebrity and, ultimately, the terms of the purse.
Traditionally in entertainment and sport, we see the rewards for being number one (or close to the top) as many multiples compared to those in the middle. Think of footballers; the difference in wages and bonuses between those who make it to the very top and those who don’t is enormous.
It can be the difference between never having to work again and a life on the dole. The differences between two promising footballers can be minute but the chasm between success and failure is infinite. One stops porn; the other watches it.
Years ago, these “winner-takes-all” markets were the preserve of entertainers and sportspeople; these days such disparities in pay and rewards are becoming more prevalent in many industries and professions. In the US, CEOs of top corporations now earn more than 500 times as much as the average worker, up from only 35 times in the mid-1970s.
The same goes for music, and increasingly in law, dentistry, medicine, architecture, investment banking, consulting, journalism, corporate management, publishing, design, fashion, and a host of other professions. Although the details vary in different spheres, the common thread is that technical forces have enabled top performers to serve broader or more valuable segments of their respective markets.
In sport and entertainment, it was always understood that deciding to try to make it in these careers was a bit like buying a lottery ticket. If you win, you could make hundreds of times more than if you had chosen a less risky career. If you lose, however, you earn much, much less.
Today, many professions work in a winner-takes-all fashion – arguably without much of the downside risk. So the best lawyers get paid multiples of the average lawyer’s earnings. The best accountants do likewise.
Look at Ireland’s legal profession in the Four Courts. There are those who make fortunes, and there are those who just scrape by. Even in education, grind schools poach better teachers and pay them considerably more than the local school equivalents.
The reason for this is the hyper-competitive economy we live in. The stakes in every game have been raised. If the best barrister can increase the likelihood that you will win the case, then he or she is worth the money.
Likewise, if the best teachers can give your child a comparative advantage and a place in college, then they are worth the price. Similarly, if the best carpenter will make you furniture that you feel will distinguish you from your peers, he or she will be worth the price.
It also exists in journalism, where the standout journalist – the one who is better known, a better communicator on TV or radio and therefore, more public – makes more per word than other hacks who might actually be much better writers.
So the winner-takes-all economy, where rewards are skewed ludicrously to number one, embeds itself in society.
Being a mere worker or an average employee is simply not good enough. The entire society becomes obsessed with being number one, having the newest, biggest, brightest, latest car, house or kitchen, because with winner-takes-all rewards come winner-takes-all possessions.
Technology and the dissemination of information have had a huge impact on the growth of this winner-takes-all culture. Networks are crucial. Years ago, word of mouth solidified reputations, today it is communities online.
Think about TripAdvisor and the impact good reviews have on hotels and restaurants. Do you go by them? Lots of people do and they recommend accordingly. So if you are better than the competition, no matter what business you are in, you just don’t make more than the others, you make much more than the others.
In a sense, this is the economics of the 21st century. Networks are coming to dominate the way we are paid if we are self-employed. In the 20th century, pay was determined by qualifications, years in employment, competence and loyalty. These permanent and pensionable jobs, the so-called jobs for life, are gone and in their place come winner-takes-all markets, which are transitory and competitive, but well paid.
Conor McGregor is an extreme manifestation of this. His business model is the model for many businesses in the years ahead. Those who are at the top will get multiples of those just below them.
McGregor understands this game, maybe better than anyone who has gone before him. He has pulling power. After all he is bigger than porn, now that’s saying something!