This Threads News is a Wake Up Call to the Magic Industry: Prediction

Is this the end of independent magic shops?

Meta Threads App on Black iPhone
Meta Threads App

In early 2022 I wrote an opinion piece about how some recent Netflix news was a wake-up call to the magic industry. The article went surprisingly viral (likely partly because it was free to read). Some famous magicians and some magic industry figures reached out to discuss the piece.

This Netflix News Is A Wake Up Call To The Magic Industry
Is this the end of the online magic tutorial boom

Ironically, when I was working on a Netflix show not long after, the show's star even brought up the piece to me. The opinion surmised that Netflix lost subscribers for the first time in its long history, and its resulting pivot to include advertising was a signal to our industry. That there's too much magic online now and that the boom of virtual magic tutorials was coming to an end.

Annoyingly, I think I was right. In 2023, we've seen fewer video tutorials pushed by the big magic companies than ever. Ellusionist is suddenly making more and more physical items, and Vanishing Inc. even hired someone full-time to produce their original physical products.

Just look at Penguin Magic, once the kings of the virtual download, with their homepage plastered in $9.99 video tutorials. Now, every single trick on their homepage includes a physical item. I can't stress how wild that is. Penguin are the number one magic company when it comes to optimisation. They only ever do what works and in the cheapest way possible.

They haven't updated their site in decades because they don't need to. But they've pivoted to physical products, so they must have a good reason. And they really have to work hard to figure out ways to create physical products out of downloads. Their latest releases are video tutorials with paper gimmicks that they can print for pennies and ship flat to buyers.

Just look at their latest bizarre cookie prediction trick from Dan Harlan; the gimmick doesn't look accurate at all, even against the genuine slips Dan holds earlier in the performance. And yet, for $19.99, you can buy the video tutorial and enough gaff slips for "100 performances". The quality looks awful and is no better than you'd get if you printed and cut the slips out at home. But they can't let you do that because it would only be a download.

So what's the deal with Threads?

I've banged on about how I was right last year for long enough. Now it's onto a new prediction, and this one is about Meta's new Threads app and its overnight success. Much like how magic could learn from the big streaming companies, I think there's a lesson, and perhaps a warning, in this news, too.

Threads is a word-based conversation app that's similar to Twitter. It's similar to Twitter because it's a total rip-off carbon copy of the product. The critical difference is that Threads is more minimal, faster, free of ads, free to use, and designed much better, in my opinion. The app was launched by Mark Zuckerberg's Meta (Prev. Facebook) and led by Instagram's head Adam Mosseri.

On a quick aside, I thoroughly recommend the documentary on Netflix about Instagram's redesign called Abstract: The Art of Design. I'll never shake off my amazement when one person in the documentary casually mentioned their Dad created "click and drag." Wild to think someone invented something that feels natural to us. We do it now without thinking.

The launch of Threads doesn't come as a surprise. Meta was rumoured to be working on its rival for the past six months and rushed to launch it a few weeks early after Elon made another disastrous move at Twitter, limiting the number of tweets users view for free.

Threads is not the first Twitter clone. There's Mastodon, Blue Sky and others that have carved off a little chunk of Twitter's audience over the years. But Threads is the first clone to do unbelievably well, and it might kill Twitter forever.

Threads amassed 150 million users in less than seven days.

That is wild.

How did they do it?

Well, Meta cleverly leveraged its existing businesses. They built the best team in the world with significant experience in the social app space. They also could copy most of the app from Instagram, with large portions of Threads looking identical, like the account and settings pages. But there's one key thing which allowed them to do so well. Meta leveraged its existing audience on Instagram and made it easy for users to opt into Threads with a simple flow from within the Instagram app.

Simply put, a monopoly leveraged its assets to create a new business and wipe out the chances of fair competition. It sounds terrible, but people are rooting for the Zuck since Elon has made so many controversial changes on Twitter.

So what is a monopoly, and does magic have one?

Yes, the answer is yes, and it's Murphy's Magic.

Murphy's Magic is the largest wholesaler in the universe. That's their wording, not mine. And they run what I view as a monopoly business that delicately props up the magic product and independent store worlds. Based in California, they are the wholesaler who buys magic in bulk from producers and then sells it to shops worldwide, selling directly to customers.

A disclaimer: I released a magic DVD with Murphy's Magic Supplies when I was eighteen. I found the team who creates their original products a delight, and I have always been paid on time by them. Meanwhile, I've never met any creator or magic publisher who has always been paid on time by Murphy's wholesale department. One time, they finally paid me for a wholesale book order, but it was months late, and they sent it to the wrong account.

I've tried my best to be fair in my coverage of Murphy's, especially around the Mr Blonde controversy and allegations of theft by their suppliers (One Ahead wanted to ask them how they ensure products are original and high quality, but they never answered our questions).

But I need to be critical of Murphy's in my coverage of the magic industry on One Ahead. If I believe they have a monopoly hold on the industry and that they set the standard of the products you see in stores, then they've earned our critiques. Our role at One Ahead is to write honestly about companies this big in our industry.

I spoke to people who have worked with Murphy's about whether the way they dominate the industry is an issue. Most people will say they're good people running a successful business, and that's why they've hit a monopoly status. And to them, I say, okay, great – do you think monopolies are bad? And then a sort of awkward silence will fall upon them.

Because it's true – we've all played Monopoly. The reward for winning and being good at the game of capitalism is, you guessed it, a monopoly. You've dominated an entire industry to a point where no one can compete, and you have massive power over everyone in it.

Roman wrote a great and delicate story last week about how PropDog and other magic stores worldwide are closing. It's a big moment for magic, and yes, you could argue the early signs were when big city stores like Davenports closed several years ago. But to me, this is more concerning. While Dave Bonsall's PropDog had a physical store just outside London, most of its orders were online.

In a lengthy Facebook post, Dave explained how operating PropDog became highly costly. Every magic retailer stocks products from the wholesaler, Murphy's Magic, based in the USA. The impact of Brexit, the cost of living and other factors have meant that the prices have skyrocketed for UK-based shops.

Some stores, like Vanishing Inc., have been smart enough to move their warehouses worldwide and down the road from Murphy's. In doing so, they have minimised the cost of buying and forwarding stock to customers.

Okay – here's my concern.

Murphy's magic has its fingers on a big red button that will ultimately destroy the independent magic stores overnight. Will they press it? Who knows, but the signs are there, and it could be coming soon.

The one rule Murphy's has never broken is to never sell directly to customers. To buy from Murphy's, you need a registered dealer account and at which point you can purchase products from them at roughly 60% of the retail price.

If Murphy's ever decides to break this rule and sell directly to customers, they can leverage their existing monopoly business (much like Meta) and wipe out their competitors in the magic industry.

The signs are there. For nearly a decade, Murphy's has been teasing the idea, producing their original products and building their own social following online, with YouTube videos, Facebook and Instagram content in ways that are challenging to compete with as an independent store. There are even rumours they plan to add dropshipping to their business, mailing products direct to customers on behalf of magic shops.

These are usually viewed as worrying acts of a monopoly business. Amazon had to testify to Congress when they began producing their own products (Basics) because the concern was that they could use their sales data of other companies' products to determine which products to produce in-house and use their own tools to give them an unfair advantage regarding sales.

It might all become too tempting as more and more physical shops close worldwide and orders more online. Plus, with companies like Shopify building out worldwide distribution channels to rival Amazon's fulfilment, it will soon become more accessible than ever for Murphy's to press that button and enable fast delivery to customers worldwide.

They own all of the product stock. Most magic shops only carry a handful of each product. Just look at Vanishing Inc and similar shops. When you buy an item from Vanishing Inc, it's usually purchased from Murphy's and driven down the road to V's US warehouse, which then sends it packaged with other orders to Vanishing Inc's UK warehouse, which then ships it to your door.

How hard would it be for Murphy's to find six distribution forwarders worldwide to pass shipments to customers in the UK, Europe, Australia, etc? Would it be worth the extra 66% in revenue per item they'd make selling products at retail price to customers rather than at a wholesale price to businesses?

(A jump from 60 to 100 is an increase of 66.5%)

Look – I'm not saying they're going to press the button. I'm saying they could and that switching to a direct-to-consumer model puts every physical magic shop worldwide out of business overnight.

And with physical magic shops like PropDog and others closing worldwide, the sales Murphy's is receiving are shrinking while the public demand from customers remains consistent.

Earlier this year, in March, Ellusionist announced it was halting all business dealings with Murphy's and selling directly to stores. There were various reasons for doing so, but they were never stated publicly. They have said that since cutting ties with Murphy's, Ellusionist's wholesale business has doubled. Several magic shops have publicly praised Ellusionist via Instagram stories for giving shops a significantly better purchase price and supporting their businesses.

Maybe, with magic shops closing and producers no longer selling to Murphy's and with the ability to distribute to customers getting more and more accessible, perhaps, just maybe, Murphy's will finally press that big red button.

If they did, it would change the magic industry and the next generation of magicians forever.