Improv Bubbles

In the 1630's in the Netherlands, Tulips (recently introduced into the kingdom) suddenly became status symbols; seen as having very high value. Some adult bulbs, such as the Viceroy, became so valuable that they started to be traded at 3,000 to 4,150 florins (where the average income of a skilled craftsman was 300 florins a year). The entirety of the Dutch populace became involved in the trade and sale of tulip bulbs. As the value of the bulbs increased, many became rich in what many economists and historians see as the first speculative bubble. Everyone imagined a market for tulips would last forever, and people speculated wildly on their prices, hoping mainly to resell them for profit. Then, on February 5, 1637, the price of bulbs dipped for the first time and the bubble had burst. By May 1, the price had completely plummeted and the economy for tulips collapsed (although it actually could be seen as a return to normal). In the 19^th century, when the hyacinth became the new fashionable flower, a similar economy fluctuation occurred.

Other similar bubbles have formed – notably the South Sea Company (officially The Governor and Company of the merchants of Great Britain, trading to the South Seas and other parts of America, and for the encouragement of fishing) was a British joint-stock company that had a monopoly to trade with South America. When the company began to set up stock, they created extravagant rumors of its potential trade profits to be made in the new world which also spurned a frenzy of speculation that drove prices from £100 to £1000. Again a herd mentality drove prices up – a belief that all the money would be made back and then some. This happened again in 1720, also around a monopoly, this one (The Mississippi Company) for businesses in the French colonies in North American and the West Indies. Those of us in the millennial age distinctly remember the dot-com bubble of the late 90's, built around free spending of digital companies whose only objective was to “get big fast”. As company's stock values rose, they drew in more investors hoping that it would continue to rise. Around the same time, the rapid increase in the apparent value of Beanie Babies catapulted their worth to unprecedented levels before a similar “burst”.

So what's the point, and what does it have to do with improv? There have been recent blog posts and podcasts where comedy luminaries (like Bob Odenkirk) have indicated that an improv bubble has formed and that it is going to burst. UCB and iO (Chicago) have recently moved into swanky new huge headquarters, and improv is definitely on the rise. All across the US, even small market cities are now home to improv theaters doing excellent business and most mid-size cities probably have 2 or 3 theaters. Classes are full, shows are constant, and communities of improvisers are thriving. So we have to be in a bubble then?

Talking about how improv is either on the verge of breaking huge or breaking down is obviously one of the most common conversations held by improvisers (one that rivals “how did he get on a house team” in occurrence). We are fascinated with the idea of being on the ground floor of greatness or getting watch the fires consume Rome; but I think more basically we do want to see improv succeed so we are concerned with the idea of the bottom dropping out because it would mean the party would end. While I am by no means an economist, I personally do believe that we are in a bubble, but I don't think that we are going to see that bubble burst, and here's why:

1. Most everyone who actually knows things about bubbles says that you cannot identify a burst before it happens. Collapses in commodities can only be seen after the fact, so there isnt' a way to predict it. All we really know righ tnow is that churn in improv is increasing and the economy is growing, which may very well just be natural growth. To call it a bust is a bit apocalyptic and doomsaying.

2. All previous bursts have been built on commodity trading. That is to say that bubbles form when people drive prices up hoping they can re-sell the things they're buying at profit. We cannot re-sell improv no matter how hard we try. What we are selling, when we sell things, are shows (which are one of a kind memories that cannot be recreated) or education (workshops/classes) that only the person who participates in can enjoy. They can turn around and sell what they have learned as teachers or coaches, but they can't actually buy something that they re-sell at a mathematically equal level. To truly be a good teacher is to take a bunch of classes and do a bunch of shows, which effectively limits how quickly we can reproduce our product.

3. Bubbles are, by definition, when the trade of an asset (a tangible or intangible that is able to be owned or controlled to produce value) occurs at a price that strongly deviates from the corresponding asset's intrinsic value (what is actually worth, independent of the market). Essentially, when the price of a thing appears to be implausible based on views of the future. Any time a bubble has built up it is because people keep increasing the price of something over what it's worth, but here's the rub – what is this thing we do actually worth? Some theaters do free shows, or donation only, $5-10 is pretty common, but I've paid $45 to see one show when it was a really good show. Most coaches cost $25-50 for two hours, and most workshops around $30, but I have heard of coaches going to $75 for two hours and $100 for workshops depending on the teacher and the class size. But what we do doesn't have intrinsic value; we decide the value, and as long as we're willing to pay it...

4. Bubbles are built on frenzy. Bubbles form because the prices rise dramatically and form positive feedback loops encouraging more investment. Economies suffer lots of churn with rapid trading; but the nature of improv purchase limits how often it can be traded. One of the reasons that the tulip bubble formed is that tulip bulbs mature very slowly – but, improv can be instantly recreated constantly, but can only be purchased less so. We only do a few shows a week, one rehearsal a week, one class a week. We can only buy so much of it, and only so often. The limiting factor is in how quickly we can make trades happen.

5. Improv still isn't that big. All of the previously listed bubbles formed around huge populations of people buying and selling on a regular basis. The tulip bubble and the most recent housing one (cause of the Great Recession) involved trading on a global level. The movement of those commodities drove entire economies. Sorry to say, but improv is not driving any economy anywhere. It can be a significant cog, but it isn't the engine that is powering a city. Even a place like Chicago still has industry that dwarfs what improv generates in revenue generated.

This isn't to say that a downturn couldn't happen – quite the contrary. Prices only drive up because demand is present, which is largely dependent on us as a global community constantly adding new people into it. It would be short sighted to think that improv doesn't have some sort of draw. There is an unmistakable pull, like gravity, that brings people in and keeps them here. But if we ever reach a point where “the next big thing” happens that rivals improv (which I see as unlikely just because adults really, authentically just love doing improv) or where we don't see the investment of money (and time) to be worthwhile, then we will see prices drop. My point is simply that a “crash” - that is, an apocalyptic, craft shattering event is highly unlikely. Also, let's be thankful for the craft and it's resilience and adaptability.