The End Run


The case of Video Game High School vs. Marco Polo beautifully illustrates classic disruption theory.

My wife and I just started re-watching Video Game High School. That may seem odd as neither of us exactly look like the show’s target demographic. But not only is VGHS surprisingly good, it is also a critical case study in a shifting film and media landscape. Specifically, it illustrates the dynamic of the upmarket retreat, which is a telltale sign of accelerating disruption in an established market.

A Game of “Marco Polo”

I stumbled across VGHS when showrunner Freddie Wong tweeted at my startup:

We immediately dove into season 1. And have been fans ever since.

But something struck me on our first VGHS watch-through.

On any given evening, we would find ourselves on the couch, remote in hand, deciding what to play that night. At the time, we were watching two series: VGHS, and a big-budget prestige drama full of blood and swords and horses. For the sake of argument, let’s say it was Marco Polo.

It was a watershed moment for me to realize that on any given evening, watching either Marco Polo or VGHS was a roughly fifty-fifty proposition. Media competes for attention, and attention is both finite and zero-sum. But here, this little “web series” (I hate the term and don’t think it has any meaningful definition) was going head-to-head with one of the most expensive productions in the world.

Disruptive products are “inferior,” but they compete along different vectors. VHGS is occasionally rough around the edges. You might even see a slipped roto mask here or there. But on a technical level, it meets the baseline of production quality necessary to be a viable viewing option. More importantly, the show manages to infuse a surprising amount of heart and emotion into its absurd premise. (Elevator pitch: Harry Potter, with video games instead of magic.)

And while Marco Polo has some standout performances, it simply cannot compete with my affection for characters like Jenny Matrix, Ki Swan, Ted Wong, and Brian D. (To say nothing of Drift King. Or Shotbot. Or Games Dean. Seriously: if you skipped this show, you are missing out.)

In one of this publication’s anchor posts, I closed with the question, “What does a disruptive piece of content look like?”

That question does not have a simple answer. But VGHS provides one glimpse. A disruptive piece of content can go head-to-head with a behemoth like Marco Polo with just 1% or 2% of the production budget.

When this type of disruption shows up, it forces the incumbents to double and triple down on what they already do best. And in many cases, the thing that they do best is just cost a whole lot of money.

The Great Northeast Migration

Clayton Christensen, godfather of classic disruption theory, devotes a lot of ink to this phenomenon in a chapter entitled “What goes up, cannot come down.”

Christensen shows how the internal incentive structures at BigCos tend to bias all decision-making in one direction: bigger, faster, more expensive. Over time, incumbents retreat upmarket. That is where they are able to compete most effectively. He calls this the “Great Northeast Migration.” Up, and to the right.

In our example, the incumbent product Marco Polo spent at least 100x (my napkin math) per minute of screen time compared to the challenger, VGHS. But that increased sticker price did not, and cannot, deliver 100x the value. I am not 100x more likely to select the expensive show from my program guide. And it can’t capture 100x of my personal attention.

Don’t get me wrong: I enjoy watching lavish, expensive television dramas. But I also enjoy watching competently-produced content with innovative premises, interesting characters, compelling storylines, and—something most prestige shows keep forgetting about—genuine humor.

This Northwest Migration is, in effect, what Matthew Ball has dubbed the Death Star Strategy. As incumbents retreat ever further upmarket, they eventually balkanize themselves in high-end luxury pigeonholes. That might still be a great place to live if you are an individual working within the studio system. You can harvest more social capital from your proximity to big, expensive projects. They’re not called “prestige” drama for nothing.

But what is good for individual producers and execs is not necessarily good for their companies’ long-term health. And these incentive structures are the exact levers that disruptors like to pull.

This “upmarket retreat” is well-documented in other industries as well: from steel mills to inkjet and laser printers. In each case, the incumbent firm cedes ground a little bit at a time, inching ever further up-market until there is little room left. That leaves the disruptors a full run of the field, and allows them to eventually scoop up a lion’s share of the market.

The case of VHGS vs. Marco Polo is a clear example of how classic disruption theory has a lot to say to media and entertainment. VGHS isn’t the first or last word in disruptive content. But it’s one important piece of an unfolding picture.

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