Preferences for goods and services, like preferences for one’s friends, are revealing. In markets we don’t reveal what our true preferences are until we buy products and services. Surveys that allow us to ‘choose’ among alternatives, without incurring any cost, are not the same as market decisions. No wonder that the results of surveys and questionnaires differ from behavior, when choices are costly.

Take, for example, a teenager planning the purchase of and payment for their first car. Suppose they have picked the car they intend to buy, and refuse to consider less attractive alternatives. At the point of purchase, however, their decision may change. If the option is to have $3,500 left over, after buying a somewhat less desirable car, or $900 left over after the dream car purchase, some will reconsider. They may select the less ‘ideal’ vehicle.

Why? The car that was chosen at the point of purchase is not necessarily the same as the ideal or ‘wishful thinking’ selection. Tastes influence our choices, but it’s the purchase itself that demonstrates what we prefer under the given circumstances. We have a ‘revealed preference’ for what we actually buy.

Which brings us to the Rolling Stones. And to Ruben Studdard. The Rolling Stones have been around the rock music scene for 40 years, and their current concert tour has been giving arts critics professional nightmares. One opinion piece (“Do the Stones still matter?” (Raleigh N&O, 10/2/05)) questioned the current relevance of their music, prior to a recent tour stop in Durham.

The critic needn’t have bothered. It doesn’t matter that the Rolling Stones are over 60, or ‘cruising on the fumes of past glory,’ as the writer noted. They passed the market test. In the end, nearly 40,000 local fans paid $60 to $350 per ticket to attend the concert. Geezers or no, that’s revealed consumer preference.

And then there’s Ruben Studdard, 2003 winner of the American Idol contest. American Idol, a competition between a few final contenders, chosen by an elite panel, and decided by phone-in poll, doesn’t reveal market preferences at all. For good reason. Voting over the phone is not the same as a marketplace decision, and Studdard’s recording sales confirm that. After the AI win, Studdard’s sales were good—over 416,000 first album sales, and a 2004 Grammy nomination, among other accomplishments. But in the market contest between the Idol winner and the runner-up Clay Aiken, Aiken—with 392,000 singles sold the first week, and the biggest ever holiday album sales in SoundScan charts history—claimed the prize.

In any industry, success depends upon the cumulative decisions of thousands, or even millions of different consumers. No wonder American Idol isn’t a good predictor of market success. It uses a silly version of central planning to try to determine what consumers will, or perhaps should, want. The same panel of judges conducts essentially the entire screening process—from local auditions for the show to final selection of contestants. Not only arrogant, it’s predictably off the mark.

By contrast, music lovers are perfectly capable of letting the entertainment industry know what they like, and they do. Critics didn’t dissuade Stones’ fans from showing up at concerts in droves, even if the Stones are ‘irrevocably in the past tense,’ as one writer complained. Nor did the first-place hoopla persuade American Idol fans to purchase more Ruben Studdard, or fewer Clay Aiken recordings.

Subsequent Idol shows have similarly disappointed in consistently picking superstars, so producers are considering a shift toward more William Hung-style entertainment goofiness in upcoming seasons.

Even here, producers should be wary— going for the yuks isn’t all market laughs. If American Idol misses the mark with its new approach? No worries, consumers will deliver the punch line anyway.