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OPINION

Consolidated Deviance, Inc. (“ConDev”) is unarguably the nation’s leader, if not its sole force, in the fabrication, consultancy, licensing, and merchandising of deviant subcultural practice. With its string of highly successful “SubCults™”, mass-marketed youth culture campaigns highlighting rapid stylistic turnover and heavy cross-media accessorization, ConDev has brought the allure of the marginalized to the consuming public. Before modern techniques of youth culture fabrication had been developed, stylistic subcultures ordinarily took years to achieve profitability. Now, by contrast, Consolidated Deviance founder and CEO James Hatt boasts that the Company can devise, package, and introduce a profitable SubCult™ into any geographical, class, or racial market in a fraction of this time. Additionally, ConDev SubCults™ are always designed for strong clothing and musical accessorization, ensuring ample profit enhancement from ancillary retail activity. While the Company’s nearly complete domination of contemporary youth culture is garnering widespread media attention and record-breaking net income levels as a “one-stop hegemony shop,” we do not think ConDev’s expansion potential or financial strength has been fully understood by the marketplace. ConDev benefits in unique ways from economic hard times and dismal labor markets. Mounting Inchoate Generational Anomie (IGA), threatening as it may seem to many in corporate America, will positively impact the Company’s sales. As Company income increases at well-above-industry rates, labor costs continue to fall in real terms. With domestic markets far from saturated and explosive pent-up demand for consumer goods in the newly free East Bloc, we foresee strong earnings growth far into the future. We therefore recommend ConDev as a strong buy for accounts seeking aggressive growth.

OVERVIEW OF OPERATIONS

Consolidated Deviance’s business, simply stated, consists of translating disparate subcultural signifying practices into easily identifiable and marketable lifestyle consumption configurations, known as the company’s trademark “SubCults™.” The company’s staff of lifestyle experts researches, invents, and tests a wide variety of such configurations, concentrating specifically on such market-proven attributes as “attitude,” “authenticity,” and “street-credibility.” And although ConDev intends to positively impact the homogenization and centralization of cultural authority nationwide, the Company has found the greatest measure of success, ironically, in the heavy marketing of the musics, looks, and accessories of “local scenes.” These geographically particular SubCults™ are presented to the national market as the deeply indigenous and, therefore, ‘authentic’ expressions of grass-roots alienation.

Merchandise: All ConDev SubCults™ are designed to emphasize distinctive and unusual visual signifiers, which both serve to define “in-group” status rigidly and to ensure exclusive brand loyalty to company products. Typically the most profitable merchandising spin-offs of any SubCult™ are fashion accessories and musical recordings. Other associated products include hygiene and beauty items; liquor, cigarettes, and food; publications; school supplies; and toys.

Intellectual Property: Every SubCult™ comes with a complement of signifying practices, ranging from slang and physical gestures to guitar and photographic techniques. While many of these practices remain in the domain of free speech, some are subject to patent. In particular, media programming, such as film scripts, radio formats, and TV sitcoms, has proven very profitable for the company.

Rapid Introduction, Rapid Obsolescence: All ConDev SubCult™ campaigns must satisfy the Rapid Introduction, Rapid Obsolescence (RIRO) imperative. RIRO ensures the profitability of youth culture speculation by allowing a greater number of fully articulated, investment-grade SubCults™ to arise and be liquidated in a given period of time, each one carrying a full payload of accessories and musical products. Accordingly the Company constructs each of its various SubCult™ ventures with a “built-in” impulse to self-destruction: within two years after their initial deployment, Consolidated Deviance-brand SubCults™ are usually regarded as unfashionable by the very consumers who originally embraced them. High LTV is achieved by emphasizing the unusual or the awkward in a SubCult’s™ visual definition and by emphasizing antinomianism and deviance in its attitudinal definition. Ideally, by the time a SubCult™ has been “conventionalized,” lifestyle consumers have migrated to new SubCults™

In the past, American youth culture marketers were sometimes able to profit from campaigns with relatively low lifestyle turnover velocities (LTVs), such as “Classic Rock” or the “Motown.” Youth culture fabrication services were performed haphazardly by many different agents in the media and advertising fields, without organization or central direction. But in today’s volatile and fragmented global culture markets this approach is becoming less effective. ConDev’s ventures have vastly exceeded the industry’s previous profit expectations because of the company’s ability to generate much higher LTVs. The Company has accomplished this by bringing together the many disparate elements that make up the process of cultural manufacturing, and has consequently been able to offer clients a greater number of more coherent potential youth cultures far more rapidly than its competitors. ConDev is expected to accelerate its production schedule to achieve a standard SubCult™ lifespan of less than a year by 1997, an objective which will certainly benefit from economic down-sizing trends.

Marketing Strategy: ConDev orients SubCult™ development around the analysis of key consumer research data. The two salient variables in any marketing strategy are inchoate generational anomie (IGA) and spending power (SP). The relationship between the two variables is expressed in the Company’s key consumer indicator, the Inchoate Generational Anomie to Spending Power ratio (IGASP). The benchmark (IGASP=1.00) of the ratio has been set at August, 1968, levels, when youth rebelliousness and youth spending power were at all-time peaks in real terms. IGASPs of less than 1.00 are considered bear markets for deviance product (for example, the Reagan years saw IGASPs as low as .67). By contrast, IGASPs of greater than 1.00 indicate bullish deviance markets. In high-IGASP markets and demographic cohorts, company product essentially sells itself. In low-IGASP markets, where RIRO strategy is less effective ConDev generally aims for the meanest consumer instincts with IMSuSS (intensively media-supported, sexually subversive) concepts.

IGASP curves can be plotted [see figures 1 and 2] to give a picture of the youth culture cooptation possibilities for any market or demographic cohort. Figure 1 shows an IGASP configuration commonly referred to as the “Nike Swoosh,” which represents a prime market for SubCult™ positioning. At the low end of the spending power axis we note relatively high corresponding IGA values. This condition is typical of the poor and is therefore neither remarkable nor significant for the marketer. But at the high end of the spending power axis we also see relatively high IGA values. This indicates that, to put it plainly, the rich are restless and ready for lifestyle experimentation.

Fig.1—The Nike Swoosh: IGASP Bull Market

fig1

Fig.2—The inverted Puma stripe: IGASP Bear Market (Class War)

fig2

Figure 2 shows a more bearish market configuration known as the “Inverted Puma Stripe.” One notes again the high corresponding IGA values at the low end of the spending power axis. But, in contrast to the Nike Swoosh configuration, one sees diminishing IGA values toward the high end of the spending power axis. This indicates stodgy consumer activity among a relatively complacent middle class. This IGASP configuration, incidentally, also represents social conditions that have historically given rise to class conflict.

Media Cooptation Strategy: The interest ConDev retains in several large media conglomerates ensures a reasonable amount of large-scale media exposure for any company concept once it has achieved widespread street credibility. But the really important media work comes at a much earlier stage. The launch of each new SubCult™ must be carefully orchestrated to preserve its patina of grass-roots “authenticity.” This effect has been facilitated by the company’s outright control of a number of smaller publications, several DIY-type record labels, and the “¡ReblVid!” cable channel.

Academic Cooptation Strategy: ConDev’s founder James Hatt opened new vistas in the early 1970s when he introduced Poststructuralism™ into several academic markets—working out of his garage! Little did he imagine this scholarly fashion would spearhead one of the most exciting marketing industries of the nineties. With the 1991 acquisition of the British think-tank Lifestyle Partners, Ltd., the Company has begun a long-anticipated reentry into this difficult but rewarding market. A certain variety of scholars, the Company has found, is quite willing to celebrate, help publicize, and lend credibility to certain youth culture ventures without compensation. By coincidence, the enthusiasm of academics for particular SubCult’s™ typically corresponds to that SubCult’s™ deviance/marginality content, the very factor which, ConDev believes, determines its obsolescence and profitability.

While traders and portfolio managers may sometimes find academic prose impenetrable, pedagogical enthusiasm has been found to dramatically increase a culture-product’s “credibility” factor significantly in 88% of the known cases. In addition, it can extend a SubCult’s™ “shelf life” indefinitely by making it attractive to generations of university-aged consumers long after it has become obsolete for the general public. In America this traditionally British device for increasing credibility has not been widely used, although pop star handlers Madonna Inc. have reaped its considerable ad hoc benefits over the last year without having made any advance preparations.

ConDev has announced plans to rationalize the process of academic/SubCult™ interface by endowing a number of university chairs and departments of “subcultural studies,” and by acquiring an interest in one of the country’s most influential academic presses. This press has recently published a volume of essays seeking to appreciate the “libidinal heteroglossia of Grunge.” By taking these steps ConDev believes it can enhance academic enthusiasm for its products and integrate it fully into the larger RIRO process.

British Operations: ConDev has held a controlling interest in a small but highly regarded British youth culture consultancy firm, Lifestyle Partners, Ltd. (LPL), since early 1991. Lifestyle Partners is a well respected “think-tank” operation concerned primarily with theorizing youth cultures rather than marketing.

In Britain, where the lifestyle industry is much more sophisticated and more culturally influential than in the U.S., Lifestyle Partners has amply proven its competitive abilities. It was responsible for two medium-sized youth phenomena in the RIRO category: the “Young POWs” look of summer, 1983, in which British teenagers wore garments that appeared to be tattered military uniforms and consumed LPL’s client’s pre-packaged “rations”; and the “Juan Valdez” or “Juans” movement of summer, 1986, which saw young middle-class people, particularly in Scotland, taking an unusual interest in the traditional music and garb of the Colombian peasantry.

“Grunge”: The profitability of youth culture speculation was demonstrated spectacularly in 1992 by the success of ConDev’s Grunge SubCult™. In early 1991 the Company was able to unite, name, and accessorize an unruly array of disparate youth culture elements with a single slang, sound, and look. Stronger-than-expected American consumption of Grunge™ related product prompted one of the sharpest rallies in the Youth Culture Marketability Index (YCMI) since the “disco sucks” frisson of 1980. In fact, the index reached all-time highs in October, 1992, less than eighteen months after the company had introduced the Grunge™ subculture. In early January, 1993, in response to rumors concerning Grunge’s™ inauthenticity, heavy selling battered YCMI futures, and Wall Street expected a correction in ConDev shares. Viewing Grunge’s™ official obsolescence as irrelevant or even beneficial to overall market penetrability, the Company’s risk management department aggressively maintained long positions at the Chicago Board of Trade and in the end was proved the wiser. The eighteen months Grunge™ enjoyed before its demise was in fact quite long-lived by European standards, and allowed ample time for the company to maximize profits and liquidate its Grunge™ inventories. Moreover, the sudden decline of Grunge™ cleared the way for the Company’s next SubCult™ introduction, “Baby Ferns” and “Riot Grrls.” And in the week following the airing of Pepsi’s 1993 Super Bowl ads, traders saw three consecutive limit-up trading days in the YCMI pits.

Regional Strategy: In the aftermath of its Grunge™ venture, Consolidated Deviance is experimenting with a variety of SubCult™ launches in a hitherto unexploited region of the nation—the Middle West. Cities like Chicago, Kansas City, Detroit, and Cleveland have long been considered improbable lifestyle centers because of their class composition: the population profile of each city shows a large proportion of working people (largely unemployed) over the affluent segment with characteristically proletarian lifestyle consumption habits. In addition, the indigenous youth cultures of each metropolitan area exhibited idiosyncratic hostility to both accessorization and stylistic turnover. Nonetheless, ConDev has a track record of finding opportunity in what would ordinarily be perceived as forbidding environments. The considerable IGA of working-class youths having been only rarely tapped in the past, the Company has decided to launch a particularly rebellious midwestern SubCult™ similar to Grunge™ in order to open the vast working-class market to lifestyle consumption.

In Chicago, Consolidated Deviance has been able, with the enthusiastic assistance of local leaders and media anxious to establish their city as a “world-class lifestyle venue,” to introduce a SubCult™ that promotes the “glam” clothes and accessories of 1970s arena-rock as emblems of worldliness and decadence. In order to facilitate the development of this attitude into a “lifestyle alternative” that is fully-accessible to hip-minded consumers elsewhere, the ConDev decided to concentrate its efforts on a single neighborhood-area, in which it could bring the exemplars of its new SubCult™ together with the leaders of the local “art” scene, who already retained considerable deviance credibility. A number of galleries, “spaces,” and “coffee houses” (which were proven effective in Seattle) have been opened in a quarter of the city suitable for “gentrification.” The resulting “underground” has already begun to draw outside media attention, real estate prices have risen, and sales of ConDev’s “Huge Overcoat” line of clothing, sunglasses, footwear, and jewelry has shown signs of acceleration.

Production Costs: Consolidated Deviance has blazed new trails in labor cost controls. The company’s greatest asset is a highly educated and highly motivated work force. ConDev has benefited from the confluence of several trends of the last twenty years: universal access to higher education, mass-media market saturation and the opening of globally competitive labor markets. These trends have produced a glut of savvy and underemployed pop culture pundits. This work force, despite the fact that it is almost exclusively American, highly educated and acutely leveraged, is generally willing to work for low wages and few benefits. It is also inept at, even hostile to, labor organization efforts. Unlike entry-level workers in most industries, the company’s fresh post-college recruits are valued for their youth, inexperience, and bad attitudes. Nor, in our opinion, is this advantage threatened by a maturing employee base—unlike most corporations, ConDev benefits from and actively encourages workforce attrition.

Retail Outlook: The most nettlesome issue facing retailers today is how to expand sales in a global economy seemingly determined to destroy the world’s middle classes. Consolidated Deviance has largely avoided this problem owing to the unique position of its customer base—youth. In fact, the company has profited richly from the protracted global recession that started in 1990. Of all age cohorts, consumers in the 16-28 year range are the most likely to translate feelings of economic dislocation and personal insufficiency into a frenzied urge to purchase edgy lifestyle accessories. Thus, based on the global economy’s dismal prognosis alone, we expect the ConDev product to move briskly well into the future.

True business leaders have always known how to take lemons and make lemonade. Henry Ford knew that the way to stimulate demand for his product was to pay his workers higher wages and make them into reliable consumers. Although this business philosophy was widely decried at the time as heretical, the modern industrial state has prospered under the Fordist paradigm ever since. In a similar fashion, Corporate America is now seeing the wisdom of ConDev’s founder, James Hatt. Jim’s concept of media/merchandising/entertainment synergy—the Hattist paradigm, if you will—provides multinational conglomerates the tools to manipulate consumer desire and to shape the articulation of dissent.

Thomas Frank is a political analyst, historian, journalist and columnist for Salon. He is a former columnist for the Wall Street Journal, authoring “The Tilting Yard” from 2008 to 2010, and a founding editor of The Baffler. He is the author of a number of books, most notably What’s the Matter with Kansas? (2004). His newest book is Listen, Liberal.

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