What is the most powerful reason why we refuse to watch a movie? The answer is not the genre, the plot, the effects, nor whether it features Tom Cruise. The overwhelming reason why we refuse to watch a movie is that we’ve seen it already. A study of 21,000 viewings of 150 movies among 500 Penn State students revealed that 65% of movies first seen in a theater, and 87% of movies first seen as a rental, are never seen again (Rob & Waldfogel, 2006). ⁱ

Do a little thought-experiment and imagine how changing just one thing about our neurological anatomy would impact an industry: imagine we completely forgot a movie about a year after seeing it. Business strategists in digital media will tell you that you make more money when user experiences are repeatable. That is why, for example, web sites that have you take a personality quiz, or services that tell you your genetic history, are a challenge from a business point of view: once we have done it, we have little reason to become a return customer and do it again. So if we were to forget a movie after a year , we would be far more willing to watch it again. And again a year later. Studios wouldn’t need to spend as much money making new movies, because people would watch the old ones more than once (Figure 9-1). The used-movie market would be a year-round cash cow rather than a holiday gift-giving fallback. Blockbuster might still be big business.

Figure 9-1. If people were more willing to see movies a second time , studios would need to invest far less to produce new ones.

But we don’t forget movies after a year. In fact, barring neurological illness and given sufficient cues, there is evidence that we remember something about a movie for as much as a century. If nothing else, when we start to watch it again, we’ll say “oh yeah, I’ve seen this before” for a long time, often the better part of our lives. Even when our unprompted recallof movie titles that we’ve seen before is low, with prompts, we will recognizethat we have, and answer “yes” or “no” with more accuracy. And even when recognition is below our awareness, our guesses and reaction times in more sophisticated studies still reveal that some neural encoding was preserved indefinitely.

In the 1970s and 1980s, psychologists tried to measure the duration of long-term memory and pretty much gave up. We already mentioned the study by Bahrick et al. (1975) in which people could identify schoolmates from their photos with 90% accuracy after 15 years and 80% accuracy after 50 years. ⁱⁱ Bahrick (1986) also showed that 50 years later, people actually retained 40% of the vocabulary words they learned in Spanish class. ⁱⁱⁱ But few memories are as vivid as our old school friends, or drilled into us as thoroughly as Spanish words, so this doesn’t apply perfectly to memory for your memes. What about the new media we are exposed to?

Shepard tested that in an experiment in 1967. He had people flip through 612 photographs of various scenes, all of them completely new to them. An hour later, which would be well after everything in working memory had decayed, people were still 97% accurate at recognizing whether photos were new or shown previously. More shocking, Shepard brought them back three months later and they were still 50% accurate. ^iv Engen & Ross (1973) did a similar test with 100 odors like skunk and whiskey. One week later, people were 70% accurate at knowing new smells from previous ones, and a month later they were 68% accurate. ^v

Does this mean that if we spend an afternoon idly flipping through the thumbnails on a dating site, we might remember traces of them for a lifetime? For the pictures that make it past the attentional and working-memory bottlenecks, the answer might well be yes.

This anatomical fact that we tend to preserve for a lifetime the memes that we allow to colonize our brains has an enormous impact on the business of making them. From films to video games to grumpy cats, it means that for us to have an engaging experience, we must have a fresh meme. Thus as a meme-maker, your objective on most of the days you report for work will be to move on to a new product, a new edition, a new release, or a new episode in a perpetual cycle of development.

One area of the media market that is exploring whether they can buck this trend is streaming video. Among its categories of movies , Netflix has a “Watch It Again” section that displays movies that we have already viewed (Figure 9-2). Because the cost to deliver this content to the market is so much lower than it used to be, there may be some profitability to be found from the minority of us who would re-watch a given movie. Netflix would not gamble part of the real estate of its interface on re-watching if there were no profitable use for it.

Figure 9-2. Netflix and other streaming media sources are exploring how to monetize re-watching.

A 2016 study by researchers at Yahoo! found that majority of people, over time, do report re-watching something. However, even the most popular video in their sample (“The Walking Dead”) was only re-watched by 27% of us. Beyond television, the most re-watched movie was “Star Wars ,” which was re-watched by 10% of us. ^vi Echoing work done in the 1970s at the height of the TV era, the study suggested that genres that depend on surprises (horror, sports, and some comedy) are re-watched less than other genres. Because we encode plot-twists and jump-scares into long-term memory , our motivation to re-watch the movie collapses. But movies that have complex storylines and layered themes (drama, action, documentaries, and musicals) did appear to be re-watched by at least some of us, particularly if we were doing so to elevate our moods or deepen our social ties with others.

But hang on. Sitting in a movie theater during a late-night re-screening of “Star Wars,” the delight you feel might convince you that there is a business model to be built on nostalgic content. And to be fair, memes that we’ve seen before don’t die instantly in terms of the attention we allocate to them. Instead they sputter, and this can sometimes trick you into thinking that there is a reliable need you can monetize. But in the long run, we think that’s a ruse. Let us explain.

The emotional impact of all digital media derives from its ability to stimulate our own organic emotions, experiences, and fantasies. Take the example of yearbook photos , those thumbnail photos shot of our schoolmates each year and published in various paper and online channels These memes are merely visual cues, as are all digital memes, that we associate with something that has a real emotional impact on us.

Ivan Pavlov would call a thumbnail a conditioned stimuliand the emotional impact the conditioned response, whereas he would refer to the real person the thumbnail represents as the unconditioned stimuliand the real emotion he or she brings us the unconditioned response. ^vii The most important lesson he had for the world in 1926, as relevant today as it was then, is that the power of memes lies not in their pixels, but in the real experiences they recall or evoke. And it never ceases to amaze us how a small, impoverished, unrealistic digital meme like a thumbnail or a text can still produce a gigantic, rich, oh-so-real emotional response. This connection is a Pavlovian associationand the foundation of learning and memory.

But here’s the catch: the more we are exposed to the digital stimulus without the real thing it represents, unpaired and separately, the weaker our response becomes over time. This is called extinctionand it begins with the very first exposure to the meme by itself and drops off precipitously thereafter, sometimes with only three or four unpaired exposures. So the first time we see a yearbook photo we react enormously, because the person pictured, be it our best friend, sworn nemesis, or mad crush, is still recently and prominently in our lives. But the more we see that person’s digital facsimile rather than the person themselves, the more our reaction to the thumbnail wanes to extinction (Figure 9-3).

Figure 9-3. Our conditioned responses weaken to extinction when they are presented repeatedly without the unconditioned stimuli . After a spontaneous recovery, the extinction is even more rapid.

But the story doesn’t end there. Pavlov also discovered that if we take a long break from the conditioned stimulus, in this case the yearbook thumbnail, and then come back to it after a period of say months or years, then our reaction is surprisingly large compared to what the extinction curve would predict. As Pavlov put it, we have a spontaneous recovery of an extinguished response. We have a brief, semi-powerful pop of emotion, proving that our long-term memory never truly forgets anything, including extinguished associations. Sounds great, but Pavlov also discovered that recovered responses like this extinguish a second time even faster than they did the first time. And there’s the deception: even if you can convince us to watch a movie that we’ve already seen, we will lose interest in it the second time even more quickly than we did the first time. Even “Star Wars ”.

Our psychology professors used to call this the “oldie but a goodie effect ”. Their point was that although it’s fun to hear that old song again, we still tire of it more quickly than ever. But while oldie’s radio stations made for a quaint application of extinction, there were hardly any publicly traded companies, venture capitalists, or algorithmic mathematicians investing in them. Fast-forward to today’s media market, however, and it is once again an open question: will any modern-day venture in re-watching nostalgic content succeed?

To answer, there is no better case study to explore than that of Classmates.com, the profitable social-networking success story with its heyday between 1998-2008. The radiation and extinction of the Classmates meme is a natural history that every student of internet-based innovation should study carefully. Between its founding in 1995 and 2001, as the rest of the web was going belly-up during a painful bubble, Classmates.com grew to 20 million users, 1.2 million of which were paying $29.95 per year to access premium content. Then-CEO Michael Schutzler told The Seattle Times that they were adding 80,000 to 100,000 users per day. ^viii By 2006, they were reporting revenues of $139 million, up from only $85 million the year before. ^ix

What were we paying for? The ability to see “then” and “now” thumbnails of our old school friends, send them an email, and maybe get together for a reunion. Classmates built an entire business on the spontaneous recovery of extinguished stimuli. In 2015, the CEO confirmed their positioning as such:

• Everyone is graduating from high school still, and when you hit about that 25-year reunion mark, you notice that everyone starts thinking about reunions and you get emotional. Of course, you have Facebook friends from high school, but Classmates is much more about the exploration of the old class and the old yearbooks we have. Then you find a few old interesting connections and find out what happened to them. ^x

The emotional pop was real for Classmates’ users , enough to convince us to pay for its content when we were refusing to pay for almost any others, including The New York Times. But when you look closer at the Nielsen numbers, you see that the experience quickly extinguished.

In 2006, Classmates users only stuck around for eight minutes every month. That’s all it took for the impact of old yearbook photos to re-extinguish. On Facebook however, even in those early days, users stayed for 50 minutes every month, and this advantage in stickiness alone forecasted an epic takeover. ^xi As users on Classmates continued to burn out on content from the past, Facebook encouraged users to bring in content from the present, and by 2012, Facebook’s monthly active users stayed for a staggering 423 minutes per month. ^xii

In 2007, Classmates attempted to go public, riding on the incredible interest in the social networking category by both users and investors. In their SEC filing, they showed a crystal-clear understanding of the lack of stickiness inherent in nostalgic content, and the incredible stickiness of new and current content.

• “Our members do not visit our web sites frequently and spend a limited amount of time on our web sites when they visit. In addition, only a limited number of our social networking members post photographs and information about themselves, engage in message board discussions, view other members’ profiles or participate in the other features on our web sites. If we are unable to encourage our members to interact more frequently with our social networking web sites and to increase the amount of user generated content they provide, our ability to attract new users to our web sites, convert free members to paying subscribers and attract advertisers to our web sites will be adversely affected. As a result, our business and financial results will suffer, and we will not be able to grow our business as planned”. ^xiii

Classmates canceled the IPO in December 2007, only a month after filing it. They shrunk as Facebook grew, for reasons we will explore further in Chapters 15 and 16. Then in 2011, Classmates.com redirected its URL to go to MemoryLane.com, not yet learning the lesson that nostalgic content extinguishes too quickly to ever sustain growth by itself. Within a year, it redirected back to Classmates.com.