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Tuesday, April 18, 2006

In short, The Long Tail

Blockbuster movies. Hit TV programmes. Chart-topping songs. Top-selling games. These are some of the familiar bywords of a popular media culture obsessed with commercial attainment. They are words that can send a tingle up the spine of a producer and a shiver down the spine of their creative protégé. This sort of terminology has emerged due to the seemingly ineffable laws of demand that define success. You're either hit or miss. You've got one shot, as Eminem might say. There are no two ways about it. Or is there?

Journalist Chris Anderson put forward a different argument in a Wired Magazine article from 2004. His theory centres on the "Long Tail" phenomenon and how it relates to new media ventures such as Amazon and Netflix. The "Long Tail" is the colloquial name for a feature of statistical distributions in economics.

In these distributions a high popularity phenomenon may be followed by a low one which gradually "tails off". In many cases the low-amplitude phenomenon-the long tail, represented here by the yellow portion of the graph- can outnumber in the long run the seemingly high phenomenon from before.

Anderson puts this in context to the"hit"-orientated culture that pervades the traditional media. This outlook is based on the ingrained 80:20 rule (or the Pareto principle). Put simply, this economic principle relates to a basic economic principle of ratio that crops up time and time again: 80% of the wealth is owned by 20% of the people, 80% of your business comes from 20% of your customers. It can also be applied to the bottom line in media as 80% of your profits generally comes from 20% of your products. With the film and music industry, the ratio is often higher still. Whereas in the games industry it is unbelievably disproportionate with 98% of the profits coming from 2% of their top-selling games. So with economics like this, one can understand why we have such a hit driven culture. It is engendered in our capitalist psyche.

However, much of this has been driven by the fact that we've been dealing up till now "in atoms, not bits" (to paraphrase Negroponte). By that, we mean that media products have generally been sold in a closed retail environment where space is at a premium. Thus for retailers, based on the 80:20 principle, it is a better bet to stuff their shelves with DVD, Games, CDs and books that have been marketed well then to cater for niche tastes. That is why are cinemas are filled with American movies and not European flicks. That is why Play Station games are generally sequels and franchises rather than exciting and innovative new titles. That is why Britney is everywhere and why so few people have heard of Anthony and the Johnsons. That is why everyone is reading John Grisham and Dan Brown in airports. Popular taste is perpetuated by selective choice dictated by shelf space - what is considered commercial inevitably dictates what becomes commercial.

But of course than there are those other terms that relate to individuals or works of art which seem to defy convention. The "breakthrough" hit….the "cross-over" artist…the overnight sensation. These are the musicians like David Grey, books like Touching the Void and films like The Blair Witch Project and the Passion of the Christ. They seem to come out of nowhere and prove that niche tastes can find a popular commercial audience, if they are given a chance. The problem is that the big media studios don't like taking risks. They prefer the safe traditional distribution channels dictated by the 80:20 rule.

But that is why the Long Tail of the new medium is potentially providing a sustainable business model for artists and independent media producers. What makes a so-called "crossover" artist -i.e. those artists who crossover to the mainstream - is word of mouth recognition. Positive whispers gets people talking and creates a demand which the studios are generally happy to meet in rhetrospect. The equivalent on the internet to word of mouth, is personalised recommendations and customer reviews. This is what has fueled the success of Amazon and has created the Long Tail. Basically, if you buy a certain DVD or music CD, Amazon recommends to you another similar product…and often bundles them together as a special deal. Since Amazon doesn't have the constraints of traditional bricks and mortars retails, they are always in stock. So you buy it, rave about it and someone else buys it and so on. And so, what would have been perceived as a "flop" or "miss" in traditional hit-orientated thinking and dropped from the shelves actually has the breathing space to sell by virtue of the long tail and the supply on demand abilities of the virtual shopfront.

So the Long Tail theory throws a lifebuoy to the independent artist and producer drowning in the hit-saturated sea. It offers them the chance to find an audience - however slowly - for their product and create a sustainable revenue stream. And the liklihood is, that the more people going online to purchase, the longer the tail.

posted by Neil Leyden @ 1:59 p.m.

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