Musings By Joschik Posts

Expert Only versus Crowd-Sourcing, a Personal Perspective on how to build Collectible Databases

Rob with just a small portion of his collection.

Rob Graves is a Hot Wheels collector and was the creator of the South Texas Diecast database.  He is now the Head of Data for the hobbyDB project.


For years, my site, South Texas Diecast, was one of the leading sources for Hot Wheels information on the internet. It catalogued thousands of Hot Wheels variations dating back 40 years – and I did all the cataloguing myself. It was a labor of love and I enjoyed every minute – but it was also exhausting and I started to wonder what would happen to the site in the future.

Like thousands of other collectors who build catalogs of their favorite collectibles online, I’d spent 16 years on STDC and because it was all me, I dreaded the thought that in the future it might become a similar “ghost site”, falling into neglect before ultimately disappearing when the hosting ran out.

Far too many good websites are not with us anymore

Far too many good websites such as AlleyGuide or Diecast Illustrated are not with us anymore

 

That was when hobbyDB stepped in and introduced me to the concept of crowd-sourced data. Of course, I was familiar with Wikipedia (who isn’t?) and its community-created information repository. But I hadn’t previously considered using the same model for STDC – which is just what hobbyDB was proposing.

The much wider mandate, documenting every collectible ever made excited me as I also collect records, my wife is a collector of Supernatural Collectibles and I have many more interests besides Hot Wheels. Wikipedia has nine pages on Hot Wheels, hobbyDB already has more than 31,500 pages on Hot Wheels related collectibles! I was also attracted by the fact that like Wikipedia hobbyDB has vowed in its Manifesto to be free forever.

Naturally, I had some questions and skepticism at first. After all, if STDC was a Wiki-type site, wouldn’t it be open to vandalism and manipulation? And even if incorrect data wasn’t maliciously-intended, how would we make sure that all the data entered by users was to my exacting standards?

Of course, these are all the same questions leveled at Wikipedia when it began. And as I researched, I realized that all of them had been answered. In 2005, a blind study was completed by the journal Nature that compared 42 science subjects and biographies between Wikipedia and the Encyclopedia Britannica (here’s a write up about that study on the BBC site and here much more background on that subject). They concluded that “Wikipedia comes close to Britannica in terms of the accuracy of its science entries.” And by that time Wikipedia was only four years old!  From everything I could find, Wikipedia not only got better over time but also more and more trusted.

Wikipedia is constantly gaining quality and trust, even compared to some of the most established expert only data sources in existence

Wikipedia is constantly gaining quality and trust, even compared to some of the most established expert only data sources in existence

 

A combination of a passionate userbase and the right amount of oversight ensures that data is exactly what it needs to be. Of course, that doesn’t happen overnight, as contributors need to find the project (whether that’s through their own efforts or marketing outreach), become familiar with the site, and learn to work together. Given that hobbyDB is not a pure wiki either, time and effort has to be expended on developing proper tools too. hobbyDB is only 18 months old, so we still have a long way to go!

Just as Wikipedia introduced its famous “Talk” pages, at hobbyDB we take care of all of this in a similar way with a team forum. There, Curators (all our official data gatherers/editors get this title), Champions (Curators with enhanced on-site features and powers), the hobbyDB Advisory Board members and Admins can converge to discuss cataloging conventions, site improvements that would help their job, and which bad data to weed out.

Many hands make light work, the saying goes, and that’s certainly proving to be true here. We’re far from being the only entertainment/research site in this space to follow the model either. IMdB and Bricklink are just two of the diverse examples of sites which have made this model work in spectacular ways.

Moving STDC to hobbyDB and starting to work in this way has certainly taken the pressure off of me and ensured the longevity of the data I spent so long putting together. I have seen others making the same move with the same feelings – worried before the transfer, relieved afterwards.

How Big are the Collectible Markets? Are we really spending $200 billion every year on them?

Young Christian Braun

Musings By Joschik

Christian is one of the founders of the hobbyDB project and this musings are sharing some of his collecting experience that are hopefully interesting.

I have always been interested in this subject and since starting my MBA in 1991 looked for studies or other data points.  I never found a satisfactory 3rd party study and ten years ago I commissioned the only one that I know of.  I am collating my thoughts and the various facts I found in this analysis.

The “Batmobile Thought”

I sometimes use the first Corgi Batmobile as an illustration of how big this market is (and when talking about the subject in the UK find that everybody in my age group had one!).

  • Corgi Toys sold 4,907,000 of them up to the end of 1968, the production run for its last year 1969 is not known and they were also sold in various gift-sets, so I assume a total of 5.2 million.
  • I further assume that more than one third of them still exist somewhere, almost all of them in collectors’ hands (and if some get unearthed today that is where they go).
  • Their value varies widely (there are 10 known variations and with conditions from poor to mint in box they can be worth anything from $5 to $2,000).
  • I assume that the average value is around $60.

This calculates to a total balance sheet value of $104 million for this casting alone and assuming a 12 year average hold period for vintage collectibles (7 years is the average for all collectibles) is correct translates into roughly $8.7 million in annual sales.  I checked this assumption against eBay which we believe has a 3% marketshare in collectibles but less for vintage items (due to an extent to age and internet savvy of sellers but to a much larger one on eBay’s policies in the last 6-7 years) and the 3% holds about true for this Batmobile model.  The Batmobile casting is one of about 4,000 Corgi castings (even if a very successful one) and Corgi is but one of thousands of brands in model cars.  Model Cars finally is just one of the 13 sub-market in Collectible Toys and Models (others are for example Slot Cars, Radio-Controlled Vehicles, Model Trains, Dolls and Bears).


The Hot Wheels Example

Hot Wheels is now a $1.1 billion brand.  While Mattel does not publish segment information of how much of that is spend by collectors (versus parents) many conversations with Mattel executives and others in the industry make me believe that measured by value it is around 20% (collectors pay significantly more per average model as they buy many Collector’s Editions).  That would represent $200 million in annual collectible sales in the Primary Market.
A typical Hot Wheels Collection

Since the brand started almost 50 years ago in 1968 Mattel has sold more than 5 billion Hot Wheels models.  Assuming that 15% of these survived in a condition suitable for collecting and an average price of $5 (I know this is all very rough) we come to a balance sheet number of $3.75 billion.  Further assuming a 10 year hold period we get to Hot Wheels products in the value of $375 million changing hands every year in the Secondary Markets.  As many of these transactions are sold as collections and therefore at a very large discount I assume the total sales to be more closer to $200 million for the Secondary Markets.

That results in a total of $400 million in sales for Hot Wheels.


The Collectable & Vintage Toys UK Market Size 

An MBA student analyzed this market for me in September 2006 by looking at sales on eBay, toy fairs, auction houses and other channels and came to the conclusion that is was valued at £310 million (around $627 million at the time).  With hindsight the study missed some sub-markets which I would estimate would have added around 10% of the total market.

UK Market Size Study from 2006
With the US constituting 2/3 of the collectible markets I believe that the UK represents about 1/15th of the world-wide market giving a total value of the Collectible Toy markets to be $10 billion per annum.


Collectible Models Sold in US Retail

The NPD Group is a market research company which monitors consumer purchase data from over 165,000 stores worldwide.  In 2012 they reported that Collectors bought around 15% of the total toys and models sold in monitored retail outlets in the US and that the total sales for these retailers was $23bn.

Model Kits on the Shelves

This does not account for eBay, other online channels, fairs, P2P sales and auction houses and is a larger number than my prediction (use the $10 billion number calculated earlier, adjust for 2/3 of that to be in the US and then for all missing channels).


Beyond Collectible Toys & Models

While I did the most of my research on the Toys & Models markets I have also monitored literature on other types of collectibles and have created a Segment Map which calculates the annual spend as $200 billion (this excludes the value of Classic Cars).

Collectible Segments

A few comments on the graph:

  • The size of the circles represents annual global trading of collectible segments and are based on similar type of assumptions or comments from experts (many of which are on on the hobbyDB Catalog Advisory Council)
  • Segment colors denote clusters, for example dark blue is for value based collectibles such as coins, stamps and shares
  • Concentration is an approximation on how many items make up a segment and how many of those are responsible for a large percentage of the sales in one segment – take PEZ Dispenser which would probably be less than 12,000 database entries (we consider that a very small number) or model cars where the Golden Brands (Corgi Toys, Dinky Toys, Hot Wheels, Matchbox, Minichamps, Wiking and maybe 4 or 5 other brands make up more than half of the total collectible sales.

 

How many of us Collectors are out there?

I have also run some calculations on the number of collectors worldwide and estimate it to be 75 million. This number is supported by research by Pam Danziger who runs Unity Marketing, the only firm that I found that had focused on researching collectible markets (they have now pivoted their focus to the Luxury Markets).  Pam had earlier been the Director of Competitive Analysis at Franklin Mint. One of their reports from October 2000 that was based on their regular omnibus questionnaire said “Some 42.9 million U.S. households, that is 42% of total households, report that someone in their household collects any collectible item, according to Unity Marketing’s latest consumer survey.  With an average of 1.7 individual collectors living in each collecting household, the total number of U.S. collectors is estimated at 72.9 million — about 35% of the total U.S. population!”


Growth of the Collectible Markets

Elroy Dimson, Emeritus Professor of Finance at London Business School did a study in 2014 on returns of Collectible Assets (which he calls Emotional Assets) since 1900 and calculated Nominal Returns over the period of 6.4% p.a. and Real Returns of 2.4%.  This dovetails with my estimate of an annual growth of the total market of around 3%.  That growth is fed by new collectibles entering the market (like those $200 million in Collectible Hot Wheels referred to earlier) and appreciation of collectibles already in Collectors’ hands.

Chinese Stamps

We see particular strong growth in some of the Emerging Markets, primarily in China and expect the relationship of 2/3 of collecting happening in the US to reverse over the next 20 years.

Vision for the hobbyDB Value Guide

Vintage Price SignsThe hobbyDB Value Guide will be the most up-to-date and accurate on the net, primarily because we plan for it to be drawn from the most comprehensive range of data sources possible and to have it updated by many stakeholders in real time.

Our data sources will be:

Expert Opinion
As a jumping-off point, we’ll be using the opinions of leading brand and sector specialists (some of whom you’ll find as members of our Advisory Council) to get the price guide off to the best start possible. We’ve already introduced the ability for experts to add value information to items for examples of that item which are in perfect condition in and out of the packaging. We are adding the ability to add prices from printed price guide including the title and date of publication. These expert views will be used to set a baseline, which will then be enhanced as we introduce other factors into the mix.

On-site Transactions
As the hobbyDB marketplace grows, so too will our repository of pricing data.We retain details of the price and condition of every item which sells on hobbyDB – something we designed into the site from the start. This will allow us to aggregate the prices into averages and track these over time, opening up a wealth of pricing data possibilities; users will be able to viewall-timee highs and lows an item, see how the values have risen or fallen over time and get an up-to-the-minute value for the item in any condition.

Off-site Transactions
We’re always aware that some people will still be trading on other platforms besides hobbyDB (until they see the error of their ways!) and in real-world situations like toy fairs and shops.To accommodate this data, we plan to allow experts and buyers/sellers to enter values and conditions from offsite sales that they’ve verified or been a part of respectively. Users will then be able to view value information that includes these offsite sales or which is solely calculated on the basis of hobbyDB sales. We are also looking into the potential of scraping data from third party sites if they allow that – although this can present issues when it comes to matching item conditions.

Nudging
We’re aware that sometimes users may simply feel that, however many factual data sources pricing information is derived from, it simply may not reflect their buying/selling experiences or what they’ve seen. As such, we plan to allow for “nudging,” whereby users can “nudge up” or “nudge down” prices. Of course, we’re also awar ofe how open to abuse this could be, so limits will be in place on how many times a user can nudge a price for an individual item, details of nudges and their nudgers will be displayed prominently, and you’ll have the ability to view un-nudged pricing data too, of course.

hobbyDB Collectible Stats
With records of how many hobbyDB users own a particular item, in what conditions and how many other users have it on their want lists, we’ll be able to generate stats for rarity and desirability. But for items which are very rare and have no sales records, or very limited data, we can use these stats to create estimated values by looking at variants of these items – or other similar items if there are no variants – and combining this information with the number of “wants”.

Lastly, all of this will have to be displayed in an easy to understand fashion and should work well on small screens (think mobiles).  We love to hear your opinions and ideas in the comment section here below and might occasionally update this vision post.