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A subscriber asks: “From a Socionomic perspective, what does the popularity of American Idol mean?”

It’s hard to say for sure because there’s never been anything like it. But there’s never been a bear market rally like that of 2002-2006 either. This chart of Idol’s Nielsen ratings offers a pretty solid clue, however. Notice how nicely it conforms to the all-the-same-markets scenario that The Elliott Wave Financial Forecast and The Elliott Wave Theorist have been highlighting since 2004 (for the latest version of the chart see page 2 of the June issue of EWFF). It seems very likely that our forecast for this pattern can be extended to American Idol.

Like the stock market over the course of its five-season run, American Idol is something of mixed bag, socionomically. On the one hand, it is an expression of a bullish mood as the music is comprised almost entirely of hits that were generated in the bull market that ran through the second half of the last century. The whole point, to create a traditional cultural “idol,” is what bull markets do. But its popularity is also a part of the transition to a bear market as its popularity comes through the end of the long peaking process that began in the late 1990s. One aspect of major peaks is that they tend to be accompanied by the creation of manufactured musical stars. The best examples are the Monkees in the late 1960s and N’Sync, the Backstreet Boys and the Spice Girls in the late 1990s. Our guess is that this happens at the end of a long rise because, at such times, the uptrend is so deeply entrenched that it can actually be mined by savvy producers. Early in a bull market and, in third waves, stars tend to emerge more spontaneously.

But the overarching social mood influence is still that of a bear market, and Idol definitely has bearish elements. Friday's Washington Post refers to the finale, the fourth most watch program of 2006, as "Fox's badtastic American Idol." In addition to being devoid of originality, it features entertainers who are, for the most part, less experienced and talented than traditional stars. At times, it even celebrates poor musicianship, by featuring patently bad performances and allowing “judge” Simon Cowell tear apart the performances of contestants. After a particularly horrendous audition, one would-be idol, William Hung, became a minor celebrity. As The Elliott Wave Theorist noted in 1992 bear markets are known to “celebrate a lack of talent (remember The Gong Show of the 1970s?).”  Another subscriber notes that Hung’s popularity was reminiscent of “Tiny Tim's popularity in the late ‘60's. His much celebrated wedding on the Johnny Carson show occurred in December of 1969, just before the big drop in the Dow.” Hung didn’t get as big as Tiny Tim, but the next Tiny Tim is probably out there now waiting to be discovered. With its stress on conventional pop styles, American Idol will probably find it difficult to maintain its popular appeal going forward. As the quote at the top indicates, the music always changes with the trend in social mood (see Additional References for a more detailed explanation). Our May 21 entry about Europe’s pop idol contest is probably a leading indicator of what’s to come. Look for Idol to fall short of this year’s record high ratings. It may try to rescue itself by emphasizing more disturbing or cheesy acts with little or no talent, but it won't get back to where it is now. Bear markets never generate the level of mass interest bull markets attain. 

February 2002, EWFF
A favorite quote of ours is Plato’s cautionary note about changes in musical styles from Book IV of The Republic. Here’s another interesting translation we’ve come across recently: “The methods of music cannot be stirred up without great upheavals of social custom and law.” Two more versions on page 255 of The Wave Principle of Human Social Behavior offer that when the modes of music change “the laws of the state change with them” and “the walls of the city shake.” Reading deeper into Plato’s account of a connection between music and social change, we find that, like most modern-day commentators, it inaccurately assumes a causal link.

“[A new] form of play makes itself at home little by little, and gently overflows upon manners and practice; from these now stronger grown, it passes to men’s business agreements; and from business it moves upon laws and constitutions in a wanton flood, until at last all public and private life is overwhelmed.”

Of course, Plato had an excuse. He did not have the stock market, which The Elliott Wave Theorist has identified as the most precise recording of social mood and thus the most important tool of socionomic research. In 360 B.C., translator H.D. Rouse notes in his preface, there weren’t even books or newspapers. But there was music. In fact, in Plato’s time, music was probably the most precise recording of social mood. Rouse notes, for instance, that it literally subsumed the marketplace, which was Athens’ “central fount” of social interaction. This would explain the reversal in the perceived direction of cause and effect. In the quote above, notice that instead of ascribing social changes to shifts in business or politics as many erroneous observers do today, Plato’s dialogue assigned the root cause to the music itself. This is another honest mistake as music can be an incredibly accurate barometer of social change. If we didn’t have the advance-decline line and other major indicators to chart the course of the topping process, we’d probably be listening to the music a lot more intently ourselves.

Looking back across the long stock market topping process, the same “little by little” change Plato witnessed in ancient times can be seen overflowing “upon the manners and practices” of the music industry. The transition has been going since at least 1998, when the New Music Express, a well-established music industry trade publication, produced an eight-page report saying that the business appeared to be “in the early throes of a depression which could be terminal.” A London Times music writer inadvertently identified the approaching “meltdown” as a bear market when he said it resembled its status in the “the pre-punk 1970s,” the disco bust of the early 1980s and “the early 1990s when sales were static and everything from computer games to comedians were being touted as ‘the new rock ‘n roll.’” All three periods featured coincident declines in stock prices. The music industry steadied itself through 2000, but 2001 brought unmistakable evidence of decline. The most obvious is a sales decline that left the record industry with its “worst performance in at least a decade.” Another sign is a sudden loss of interest in musical acts that had been cash cows during the bull market. The latest crater came on January 24, when Mariah Carey’s $100 million contract was terminated. Carey was dumped when her latest album sold 501,000 copies. Glitter was “the first bomb in a dazzling career” that began in 1991, the start of the last leg of the bull market. As this clip reveals, there are many more victims from much deeper in the bull market:

Record Labels Are Shedding Big Names
Star singers and musicians are increasingly being dumped from their record labels. Rod Stewart, David Bowie, Tori Amos, Sinead O’Connor and Anita Baker are among established artists who have found that they do not sell enough records to justify the overhead.
Financial Times, December 24, 2001

Late in the year, musical icons Mick Jagger and Paul McCartney put out albums that have already disappeared from the charts. The two biggest sellers of Cycle V, Garth Brooks and Michael Jackson, also put forward albums that fell almost immediately from the Top 10. Back in 1989, EWT identified Jackson as the pop music idol of Cycle V. He earned the title on the strength of a string of mega hits in the 1980s. But like many wave V cultural manifestations and music in general, Jackson has been losing momentum for years. In fact, he peaked with Thriller, which came out a few months after the start of the bull market in 1982 and went on to sell 52 million copies, the most in history. On November 13, in the middle of what may well be the Dow’s last failed bid for its final highs, Jackson experienced his own last hurrah with a 30th Anniversary show. The TV special was the highest rated network concert in six years. (The show that Jackson could not beat out was The Beatles Anthology featuring the Cycle III musical heroes). At the same time, Jackson’s “comeback” album Invincible opened at the top of the Billboard 200. But then it slid to No. 3, right behind a greatest hits album from Pink Floyd, a bear-market band EWT has previously identified as the “the strongest-selling group in  ‘downer theme’ history.” Another sign of the emerging downturn was the reception that the album received in the media. Critics savaged the release as “Bizarre,” “Invincibly Awful” and “Downright Creepy.”

A shorter-term signal is being given by the suddenly failing fortunes of teen pop sensations like ’N Sync, Britney Spears, the Backstreet Boys and Christina Aguilera. All are off the fast pace of recent years. In November, for instance, Britney’s new album opened at No. 1 on the charts with sales of 746,000, far short of her last album’s opening tally of 1.3 million in May 2000 and ’N Sync’s July total of 1.8 million. As one headline notes, “Teen Pop’s On the Way Out.” Like the Beatles in 1965-1969, Spears is now engaging in a desperate bid to turn with the tide. Her version of the Beatles’ persona-shifting Lonely Hearts Club band in 1967 will take full form in her first movie, which comes out later this month. The film features sex, rape, underage drinking and teen pregnancy. “It’s a far cry from the Miss Priss image Spears has tried to cultivate,” says the NY Post. “The flick features the sultry songbird dancing in her underwear, getting drunk and losing her virginity to an ex-con.”

Meanwhile, the bulleted albums on the Billboard 200 reveal an emerging demand for darker fare. Among surprises in recent months is The Great Depression, The Sickness and Iowa by a band called Slipknot that has “risen out of obscurity” with the help of a “dark grinding sound” and “grotesque masks.” This progression from bubble gum at the highs to grinding guitars and dark lyrics is a replay of the transition from 1965-1969 as described in EWT’s 1985 report, “Popular Culture and the Stock Market.” During that peak, the old uptrend, characterized by “studio manufactured ‘Bubble Gum’ hits, a sickly-sweet extreme in trend,” competed with the emerging bear market, which supported “bands whose accent was on the negative, [with a] noisy, foreboding sound.” As the second major leg of Cycle wave IV got rolling in 1969, bubble gum made a quick exit. This era’s lingering teen sensations should now do the same. Spears’ slackening sales and makeover suggest that that is exactly what is happening. Time magazine reports that a “rap-metal fusion” album by Linkin Park “shocked the record industry by selling 4.8 million copies of its debut album to eclipse ‘N Sync and Britney Spears as the top selling act of 2001.” The band’s themes of “alienation, frustration and loneliness” seem made to order for a post-bubble and a post-bubble gum world. A lot of the band’s lyrics could be titled Ode to the NASDAQ : “I tried so hard and got so far/but in the end it doesn’t even matter/I had to fall and lose it all.”

Or, how about this one for a drastic shift in musical style? After 66 weeks on the charts, a collection of blues and folk songs from the 1930s rose to No. 10 on in the latest Top 200. “In an era of teen pop and rap/rock, only a complete nut job could have predicted the genre-hopping, cash-register-ringing success of O Brother [Where Art Thou?],” says a recent article. OK we’re nut jobs. Back in 1989, in a discussion about what to look for on the other side of the tidal wave, The Elliott Wave Theorist said, “Styles from the 1930s and 1940s will become adopted in or influence music.” Call us crazy, but we suspect the ancient Greek philosophers would take more than just a passing interest in the meaning of O Brother’s popularity. We wonder what they would think about socionomics’ ability to predict musical changes.