Wine and movies have a lot in common. They are both worldwide markets for highly differentiated products with critics who are visible and economically important. But while there are as many film critics as there are films and opinions about films, there are just a handful of highly influential wine critics, Robert Parker’s Wine Advocate, The Wine Spectator, and a few others. This is somewhat counterintuitive because there are many, many more wines than films. Here are a few thoughts.
- People know their taste in movies better than they know their taste in wine. This makes it easier to find idiosyncratic movie critics that have similar tastes. Similar critics face an entry barrier in the wine world.
- All wines taste the same and the role of a critic is just to tell you which wines you are supposed to like and which wines you can brag about drinking. This creates a natural oligopoly among the wine critics who the market coordinates on.
- Wines are given as gifts and movies are not. This means that wine critics are rewarded for reflecting general rather than specialized tastes.
- A very small fraction of wines are good and wine criticism just means tasting thousands of wines until you find the good ones. This creates increasing returns to scale in wine criticism, another source of natural monopoly power.
- The movie businesss is less competitive so a blockbuster film earns more rents and as a result there is more rent seeking, especially in marketing. Thus the emergence of David Manning. There is no analogous force behind “The feel good wine of the year!”
- Wine critics provide a service for wine-makers, film critics are serving film-goers. What makes a good wine critic is the ability to articulate what wine buyers will buy. Whoever is best at this will dominate.
Cynics believe some version of 6 and 2 (Parkerization.) I don’t understand why 5 wouldn’t be the same for wine and film maybe this is just a matter of time. 4 may be true in the mid-range but whether this matters depends on whether you think wine critics are really influential here or rather at the high end where there are relatively few consistent performers. I lean toward 1, Gary Vaynerchuck notwithstanding, which is a less cynical version of 6.
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June 27, 2009 at 10:49 pm
Charlie
One other idea is that there is a high demand for positive reviews by film makers. So there might be just a handful of movie critics that viewers listen to, but a fringe that compete to have their boilerplate “this year’s must see comedy!” on a DVD box somewhere.
Perhaps another is that the people who listen to movie reviews have a broader array of tastes in movies than those that read wine reviews do in wine. There are movie review readers who like Superbad and some that like Juno, whereas no one that reads wine reviews drinks white zinfandel. With a narrower array of tastes, fewer critics may be needed to saturate the market.
Also, how many wine buyers know the Parker or Wine Spectator (or whatever) score of the bottles that they are considering buying? Of the fraction of buyers that read reviews, they may only know the scores of a fraction of the wines that they consider. Movie reviews are pushed into our face on boxes and commercials. It’s tough to avoid ads for movies, but you have to seek out ads and ratings for wines. Information costs may reduce the demand for such scores.
Lastly, there may be more wine critics than you imagine. Wherever you are in the world, you can see pretty much whatever movie you want. So reviewers everywhere in the world are publicly reviewing movies that you could see. But it’s tougher to get wine. Will my local wine shop have that bottle that scored a 96? Stores don’t carry every bottle that earns top marks and not every bottle that they do carry is rated. Instead, stores might employ shelf talkers that are essentially reviews; stores become local critics. So people might seek out the reviewer (the wine store itself) that covers their world of interest (the wines carried by that store). So there may be many local critics beyond Parker and his ilk.
Off to the San Francisco Pinot Festival tomorrow, so I will wear my “everybody’s a critic” hat.
June 30, 2009 at 11:22 pm
egl
The markets don’t have that much in common. Movies are homogeneous in price and availability (thanks to the gazillion-plex) but heterogeneous in quality for each viewer. In contrast, wines vary tremendously in price and availability, and most drinkers can’t distinguish very well and buy within a narrow price range. Wines also lend themselves to repeat purchases of the same item, but most movie viewing is a one-time experience. (That’s why there are sequels, right?)