This link has been bookmarked by 145 people . It was first bookmarked on 26 Jul 2006, by Sonny Cloward.
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15 Mar 14
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03 Jul 12
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combining infinite shelf space with real-time information about buying trends and public opinion. The result: rising demand for an obscure book.
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Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service
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Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching - a market response to inefficient distribution.
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we live in the physical world and, until recently, most of our entertainment media did, too. But that world puts two dramatic limitations on our entertainment.
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The first is the need to find local audiences.
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retailers will carry only content that can generate sufficient demand to earn its keep.
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The other constraint of the physical world is physics itself.
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The curse of broadcast technologies is that they are profligate users of limited resources.
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Hit-driven economics is a creation of an age without enough room to carry everything for everybody.
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with online distribution and retail, we are entering a world of abundance.
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the 20 percent rule in the entertainment industry is about hits, not sales of any sort.
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We assume, in other words, that only hits deserve to exist.
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industry has a poor sense of what people want. Indeed, we have a poor sense of what we want.
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Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000.
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You can find everything out there on the Long Tail.
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The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon's book sales come from outside its top 130,000 titles.
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"The biggest money is in the smallest sales."
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Rule 1: Make everything available
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Embrace niches.
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What matters is not where customers are, or even how many of them are seeking a particular title, but only that some number of them exist, anywhere.
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almost anything is worth offering on the off chance it will find a buyer.
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The Long Tail approach, by contrast, is to simply dump huge chunks of the archive onto bare-bones DVDs, without any extras or marketing.
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Rule 2: Cut the price in half. Now lower it.
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The main reason for this is that pricing isn't set by the market today but by the record label demi-cartel.
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That wholesale price is set to roughly match the price of CDs, to avoid dreaded "channel conflict."
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Imagine if prices declined the further you went down the Tail, with popularity (the market) effectively dictating pricing
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Pull consumers down the tail with lower prices.
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consumers know that free music is not really free: Aside from any legal risks, it's a time-consuming hassle to build a collection that way.
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So free has a cost: the psychological value of convenience. This is the "not worth it" moment where the wallet opens.
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By offering fair pricing, ease of use, and consistent quality, you can compete with free
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Offering only hits is no better.
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By contrast, the success of Netflix, Amazon, and the commercial music services shows that you need both ends of the curve. Their huge libraries of less-mainstream fare set them apart, but hits still matter in attracting consumers in the first place.
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Use recommendations to drive demand down the Long Tail.
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This is the difference between push and pull, between broadcast and personalized taste. Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare.
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a remarkably efficient form of marketing,
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encourages exploration and can reawaken a passion for music and film
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more diversity
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27 Jun 12
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The main problem, if that's the word, is that we live in the physical world and, until recently, most of our entertainment media did, too. But that world puts two dramatic limitations on our entertainment.
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Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots.
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This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance. And the differences are profound.
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We're stuck in a hit-driven mindset - we think that if something isn't a hit, it won't make money and so won't return the cost of its production.
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no manufacturing costs and hardly any distribution fees
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popularity no longer has a monopoly on profitability.
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more.
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Combine enough nonhits on the Long Tail and you've got a market bigger than the hits.
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more than half of Amazon's book sales come from outside its top 130,000 titles
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market for books that are not even sold in the average bookstore is larger than the market for those that are
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The biggest money is in the smallest sales
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Yet a fifth of Netflix rentals are outside its top 3,000 titles.
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most successful businesses on the Internet are about aggregating the Long Tail in one way or another.
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Google
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Amazon
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Rhapsody
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Google
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Embrace niches
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Netflix has made a good business out of what's unprofitable fare in movie theaters and video rental shops because it can aggregate dispersed audiences.
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t's way too much fuss for everything else
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99 cents violates our innate sense of economic justice: If it clearly costs less for a record label to deliver a song online, with no packaging, manufacturing, distribution, or shelf space overheads, why shouldn't the price be less, too?
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prices declined the further you went down the Tail, with popularity (the market) effectively dictating pricing.
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he lesson: Pull consumers down the tail with lower prices.
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financed by advertising or a flat fee
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The problem with MP3.com was that it was only Long Tail.
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o familiar point of entry for consumers
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commercial music services shows that you need both ends of the curve.
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Use recommendations to drive demand down the Long Tail.
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push and pull, between broadcast and personalized tast
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Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare
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recommendations are a remarkably efficient form of marketing, allowing smaller films and less-mainstream music to find an audience. For consumers, the improved signal-to-noise ratio that comes from following a good recommendation encourages exploration and can reawaken a passion for music and film, potentially creating a far larger entertainment market overall.
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28 Apr 12
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new economic model for the media and entertainment industries
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For too long we've been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching - a market response to inefficient distribution.
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Hit-driven economics
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Thus the company's first lesson: Embrace niches.
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If it clearly costs less for a record label to deliver a song online, with no packaging, manufacturing, distribution, or shelf space overheads, why shouldn't the price be less, too?
Surprisingly enough, there's been little good economic analysis on what the right price for online music should be. The main reason for this is that pricing isn't set by the market today but by the record label demi-cartel. Record companies charge a wholesale price of around 65 cents per track, leaving little room for price experimentation by the retailers.
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Such "misses" cost less to make available than hits, so why not charge even less for them? Imagine if prices declined the further you went down the Tail, with popularity (the market) effectively dictating pricing. All it would take is for the labels to lower the wholesale price for the vast majority of their content not in heavy rotation; even a two- or three-tiered pricing structure could work wonders. And because so much of that content is not available in record stores, the risk of channel conflict is greatly diminished. The lesson: Pull consumers down the tail with lower prices.
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The labels fear that if they price online music lower, their CD retailers (still the vast majority of the business) will revolt or, more likely, go out of business
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That wholesale price is set to roughly match the price of CDs, to avoid dreaded "channel conflict."
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we live in the physical world
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An average record store needs to sell at least two copies of a CD per year to make it worth carrying; that's the rent for a half inch of shelf space. And so on for DVD rental shops, videogame stores, booksellers, and newsstands.
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. The radio spectrum can carry only so many stations, and a coaxial cable so many TV channels. And, of course, there are only 24 hours a day of programming.
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Everyone's taste departs from the mainstream somewhere
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a creation of an age without enough room to carry everything for everybody.
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This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance
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xecutives at iTunes, Amazon, and Netflix, has discovered that the "misses" usually make money, too. And because there are so many more of them, that money can add up quickly to a huge new market.
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second reason for the wrong answer is that the industry has a poor sense of what people want.
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We equate mass market with quality and demand, when in fact it often just represents familiarity, savvy advertising, and broad if somewhat shallow appeal. What do we really want? We're only just discovering, but it clearly starts with more.
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"The biggest money is in the smallest sales."
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Netflix has made a good business out of what's unprofitable fare in movie theaters and video rental shops because it can aggregate dispersed audiences.
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Netflix. It has, in short, broken the tyranny of physical space.
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The problem with MP3.com was that it was only Long Tail. It didn't have license agreements with the labels to offer mainstream fare or much popular commercial music at all. Therefore, there was no familiar point of entry for consumers, no known quantity from which further exploring could begin.
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Due to overcontrolling providers and high costs, they suffer from limited content: in most cases just a few hundred recent releases. There's not enough choice to change consumer behavior, to become a real force in the entertainment economy.
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21 Sep 11
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08 Aug 11
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25 Jul 11
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In the tyranny of physical space, an audience too thinly spread is the same as no audience at all.
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In the t
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But most of us want more than just hits.
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Hit-driven economics is a creation of an age without enough room to carry everything for everybody.
-
we are entering a world of abundance.
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This is the world of scarcity.
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80-20 rule
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20 percent of major studio films will be hits.
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CDs, where fewer than 10 percent are profitable
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The first is we forget that the 20 percent rule in the entertainment industry is about hits, not sales of any sort.
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stuck in a hit-driven mindset
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the industry has a poor sense of what people want.
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What do we really want? We're only just discovering,
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This is the Long Tail.
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If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are
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Thus the company's first lesson: Embrace niches.
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That wholesale price is set to roughly match the price of CDs, to avoid dreaded "channel conflict."
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Price according to digital costs, not physical ones.
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The lesson: Pull consumers down the tail with lower prices.
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The problem with MP3.com was that it was only Long Tail.
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18 Jul 11
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Now Touching the Void outsells Into Thin Air more than two to one.
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More sales, more algorithm-fueled recommendations, and the positive feedback loop kicked in.
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infinite shelf space with real-time information
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an entirely new economic model for the media and entertainment industries,
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the emerging digital entertainment economy is going to be radically different from today's mass market
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retailers will carry only content that can generate sufficient demand to earn its keep
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the tyranny of physical space
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"What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?"
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both just entries in a database
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We equate mass market with quality and demand, when in fact it often just represents familiarity
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Chart Rhapsody's monthly statistics and you get a "power law" demand curve
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But a really interesting thing happens once you dig below the top 40,000 tracks
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Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000.
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This is the Long Tail.
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a market that sells by the song
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most successful businesses on the Internet are about aggregating the Long Tail in one way or another
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Rule 1: Make everything available
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Now Daughter From Danang consistently ranks in the top 15 on Netflix documentary charts.
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The Long Tail approach, by contrast, is to simply dump huge chunks of the archive onto bare-bones DVDs, without any extras or marketing
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Rule 2: Cut the price in half. Now lower it.
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As Steve Jobs put it at the iTunes Music Store launch, you may save a little money downloading from Kazaa, but "you're working for under minimum wage."
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By offering fair pricing, ease of use, and consistent quality, you can compete with free.
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Rule 3: Help me find it
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The problem with MP3.com was that it was only Long Tail.
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By contrast, the success of Netflix, Amazon, and the commercial music services shows that you need both ends of the curve.
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For instance, the front screen of Rhapsody features Britney Spears, unsurprisingly. Next to the listings of her work is a box of "similar artists." Among them is Pink. If you click on that and are pleased with what you hear, you may do the same for Pink's similar artists, which include No Doubt. And on No Doubt's page, the list includes a few "followers" and "influencers," the last of which includes the Selecter, a 1980s ska band from Coventry, England.
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collaborative filtering
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This is the difference between push and pull, between broadcast and personalized taste. Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare.
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17 May 11
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07 Apr 11
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01 Apr 11
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The Long Tail
Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream. -
By Chris Anderson
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Amazon.com recommendation
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nline bookseller's software noted patterns in buying behavior and suggested that readers who liked Into Thin Air would also like Touching the Void.
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People took the suggestion, agreed wholeheartedly, wrote rhapsodic reviews. More sales, more algorithm-fueled recommendations, and the positive feedback loop kicked in
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Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion
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example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power.
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As they wander further from the beaten path, they discover their taste is not as mainstream as they thought
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If the 20th- century entertainment industry was about hits, the 21st will be equally about misses
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suffering the tyranny of lowest-common-denominator far
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assumptions about popular taste are actually artifacts of poor supply-and-demand matching
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Economics
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An average movie theater will not show a film unless it can attract at least 1,500 people over a two-week run; that's essentially the rent for a screen
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verage record store needs to sell at least two copies of a CD per year to make it worth carrying; that's the rent for a half inch of shelf space
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n each case, retailers will carry only content that can generate sufficient demand to earn its keep
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The Triplets of Belleville, a critically acclaimed film that was nominated for the best animated feature Oscar this year, opened on just six screens nationwide.
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plenty of great entertainment
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one of only a handful of Indian films to get any US distribution at all
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Lagaan: Once Upon a Time in India
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opened on just two screens,
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yranny of physical space, an audience too thinly spread is the same as no audience at all
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sociologists will tell you that hits are hardwired into human psychology, the combinatorial effect of conformity and word of mouth
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Great songs, movies, and books attract big, broad audience
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most of us want more than just hits
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ith online distribution and retail, we are entering a world of abundance. And the differences are profound
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Suddenly, popularity no longer has a monopoly on profitability
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Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit; less than 1 percent of CDs do that kind of volume
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We equate mass market with quality and demand, when in fact it often just represents familiarity, savvy advertising, and broad if somewhat shallow appeal
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To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody
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Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000
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This is the Long Tail.
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There are niches by the thousands, genre within genre within genre
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Oh sure, there's also a lot of crap. But there's a lot of crap hiding between the radio tracks on hit albums, too
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What's really amazing about the Long Tail is the sheer size of it
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Combine enough nonhits on the Long Tail and you've got a market bigger than the hits
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t more than half of Amazon's book sales come from outside its top 130,000 title
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"The biggest money is in the smallest sales."
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Rhapsody streams more songs each month beyond its top 10,000 than it does its top 10,000.
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Yet a fifth of Netflix rentals are outside its top 3,000 titles
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This is the power of the Long Tail. The companies at the vanguard of it are showing the way with three big lessons. Call them the new rules for the new entertainment economy
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Rule 1: Make everything available
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Rule 2: Cut the price in half. Now lower it.
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Surprisingly enough, there's been little good economic analysis on what the right price for online music should be
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No wonder they're doing price calculations with an eye on the downsides in their traditional CD business rather than the upside in their new online business.
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t should cost just 79 cents a track, reflecting the savings of digital delivery.
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Price according to digital costs, not physical ones.
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Rule 3: Help me find it
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07 Feb 11
activeneuronForget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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24 Nov 09
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23 Sep 09
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18 Jul 09
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05 May 09
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26 Apr 09
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05 Apr 09
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09 Feb 09
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an entirely new economic model for the media and entertainment industries
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recommendations
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Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service
-
In the tyranny of physical space, an audience too thinly spread is the same as no audience at all.
-
if something isn't a hit, it won't make money and so won't return the cost of its production.
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a miss sold is just another sale, with the same margins as a hit
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Combine enough nonhits on the Long Tail and you've got a market bigger than the hits
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may shift the market that way
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overcontrolling providers
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31 Dec 08
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07 Dec 08
my serendipitiesThe Long Tail - the niche strategy of businesses, such as Amazon.com or Netflix, that sell a large number of unique items, each in relatively small quantities.
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What happened? In short, Amazon.com recommendations. The online bookseller's software noted patterns in buying behavior and suggested that readers who liked Into Thin Air would also like Touching the Void
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Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion
-
The first is the need to find local audiences
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retailers will carry only content that can generate sufficient demand to earn its keep
-
"What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?"
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Only 20 percent of major studio films will be hits
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99 percent. There is demand for nearly every one of those top 10,000 tracks
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"misses" usually make money, too
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The biggest money is in the smallest sales."
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Google, for instance, makes most of its money off small advertisers (the long tail of advertising), and eBay is mostly tail as well - niche and one-off products.
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much of the content on the Long Tail is older material that has already made back its money (or been written off for failing to do so): music from bands that had little record company investment and was thus cheap to make, or live recordings, remixes, and other material that came at low cost.
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Amazon do this with collaborative filtering, which uses the browsing and purchasing patterns of users to guide those who follow them ("Customers who bought this also bought ...")
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60 percent of rentals come from recommendations
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Use recommendations to drive demand down the Long Tail.
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recommendations are a remarkably efficient form of marketing, allowing smaller films and less-mainstream music to find an audience. For consumers, the improved signal-to-noise ratio that comes from following a good recommendation encourages exploration and can reawaken a passion for music and film, potentially creating a far larger entertainment market overall.
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11 Nov 08
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07 Nov 08
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05 Nov 08
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05 Oct 08
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18 May 08
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09 Apr 08
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27 Mar 08
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20 Mar 08
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03 Jan 08
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11 Dec 07
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This is not just a virtue of online booksellers; it is an example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power. Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! Launch to songs in the iTunes Music Store and Rhapsody. People are going deep into the catalog, down the long, long list of available titles, far past what's available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture). An analysis of the sales data and trends from these services and others like them shows that the emerging digital entertainment economy is going to be radically different from today's mass market. If the 20th- century entertainment industry was about hits, the 21st will be equally about misses. For too long we've been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching - a market response to inefficient distribution.
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30 Nov 07
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29 Oct 07
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The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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03 Oct 07
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14 Sep 07
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06 Sep 07
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24 Aug 07
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08 Jul 07
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01 Jul 07
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26 Jun 07
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16 May 07
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12 Apr 07
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10 Apr 07
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03 Jan 07
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12 Dec 06
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26 Oct 06
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24 Sep 06
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As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).
-
The first is the need to find local audiences.
-
The main problem, if that's the word, is that we live in the physical world and, until recently, most of our entertainment media did, too. But that world puts two dramatic limitations on our entertainment.
-
The other constraint of the physical world is physics itself.
-
Hit-driven economics is a creation of an age without enough room to carry everything for everybody.
-
The 80-20 rule, also known as Pareto's principle (after Vilfredo Pareto, an Italian economist who devised the concept in 1906),
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With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit.
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We equate mass market with quality and demand, when in fact it often just represents familiarity, savvy advertising, and broad if somewhat shallow appeal.
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The Long Tail
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Bollywood alone accounts for nearly 100,000 rentals each month.
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Record companies charge a wholesale price of around 65 cents per track, leaving little room for price experimentation by the retailers.
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The problem with MP3.com was that it was only Long Tail. It didn't have license agreements with the labels to offer mainstream fare or much popular commercial music at all. Therefore, there was no familiar point of entry for consumers, no known quantity from which further exploring could begin.
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22 Sep 06
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08 Aug 06
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03 Aug 06
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02 Aug 06
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31 Jul 06
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21 Jul 06
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18 Jul 06
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13 Jul 06
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03 Jul 06
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20 Jun 06
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22 Apr 06
Paulo MoekotteHet artikel van Cris Andersen over het "long tail"-principe dat de komende zomer in boekvorm gaat verschijnen.
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Het "long tail"-principe in a nutshell: "Traditional retail economics dictate that stores only stock the likely hits, because shelf space is expensive. But online retailers (from Amazon to iTunes) can stock virtually everything, and the number of available niche products outnumber the hits by several orders of magnitude. Those millions of niches are the Long Tail, which had been largely neglected until recently in favor of the Short Head of hits.
When consumers are offered infinite choice, the true shape of demand is revealed. And it turns out to be less hit-centric than we thought. People gravitate towards niches because they satisfy narrow interests better, and in one aspect of our life or another we all have some narrow interest (whether we think of it that way or not)." (citaat van de site van Cris Anderson)
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16 Feb 06
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04 Feb 06
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25 Jan 06
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13 Dec 05
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24 Nov 05
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14 Nov 05
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16 Oct 05
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14 Oct 05
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22 Aug 05
Paul BarnesMore on the idea of millions of markets of a dozen rather dozens of markets of a million
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Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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04 Jul 05
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22 Jun 05
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Chris Anderson
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14 Jun 05
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30 May 05
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16 May 05
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22 Apr 05
S JonesEconomics of "the long tail" with tons of cited examples.
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24 Mar 05
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15 Mar 05
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13 Mar 05
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Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream. By Chris AndersonPage
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08 Mar 05
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11 Feb 05
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21 Jan 05
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Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream. "Suddenly, popularity no longer has a monopoly on profitability."
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18 Jan 05
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31 Dec 04
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07 Dec 04
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Since the record companies still charged 65 cents a track - and Rhapsody paid another 8 cents per track to the copyright-holding publishers - Rhapsody lost money on that experiment (but, as the old joke goes, made it up in volume). Yet much of the content on the Long Tail is older material that has already made back its money (or been written off for failing to do so): music from bands that had little record company investment and was thus cheap to make, or live recordings, remixes, and other material that came at low cost. Such "misses" cost less to make available than hits, so why not charge even less for them? Imagine if prices declined the further you went down the Tail, with popularity (the market) effectively dictating pricing. All it would take is for the labels to lower the wholesale price for the vast majority of their content not in heavy rotation; even a two- or three-tiered pricing structure could work wonders. And because so much of that content is not available in record stores, the risk of channel conflict is greatly diminished. The lesson: Pull consumers down the tail with lower prices. How low should the labels go? The answer comes by examining the psychology of the music consumer. The choice facing fans is not how many songs to buy from iTunes and Rhapsody, but how many songs to buy rather than download for free from Kazaa and other peer-to-peer networks. Intuitively, consumers know that free music is not really free: Aside from any legal risks, it's a time-consuming hassle to build a collection that way. Labeling is inconsistent, quality varies, and an estimated 30 percent of tracks are defective in one way or another. As Steve Jobs put it at the iTunes Music Store launch, you may save a little money downloading from Kazaa, but "you're working for under minimum wage." And what's true for music is doubly true for movies and games, where the quality of pirated products can be even more dismal, viruses are a risk, and downloads take so much l
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20 Nov 04
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08 Nov 04
David HolmesChris Anderson writes in Wired Magazine "Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream". The article looks at digital music servi
marketing entertainment business digital music industry mp3 downloads analysis
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07 Nov 04
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01 Nov 04
David JenningsAnalysis of the economics of providing thousands of the less popular tracks to listeners who want to hear them.
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Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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28 Oct 04
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27 Oct 04
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1: Make everything available 2: Cut the price in half. Now lower it. 3: Help me find it.
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22 Oct 04
linkmessAs modern history becomes longer (as it inevitably does) the intelectual property and art products accumulate. The repositories of thoses products are able to mine their repositories for income streams. Over time we can expect to see 10+ year old music co
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15 Oct 04
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Particularly notable is that when Krakauer's book hit shelves, Simpson's [Into to the Void] was nearly out of print. A few years ago, readers of Krakauer would never even have learned about Simpson's book - and if they had, they wouldn't have been able to find it. Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion. The result: rising demand for an obscure book. This is not just a virtue of online booksellers; it is an example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power. Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! Launch to songs in the iTunes Music Store and Rhapsody. People are going deep into the catalog, down the long, long list of available titles, far past what's available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).
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Particularly notable is that when Krakauer's book hit shelves, Simpson's [Into to the Void] was nearly out of print. A few years ago, readers of Krakauer would never even have learned about Simpson's book - and if they had, they wouldn't have been able to find it. Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion. The result: rising demand for an obscure book. This is not just a virtue of online booksellers; it is an example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power. Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! Launch to songs in the iTunes Music Store and Rhapsody. People are going deep into the catalog, down the long, long list of available titles, far past what's available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).
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14 Oct 04
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11 Oct 04
tarkowskiForget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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09 Oct 04
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Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
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07 Oct 04
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... (The record) industry has a poor sense of what people want. Indeed, we have a poor sense of what we want. We assume, for instance, that there is little demand for the stuff that isn't carried by Wal-Mart and other major retailers; if people wanted it, surely it would be sold. The rest, the bottom 80 percent, must be subcommercial at best. But as egalitarian as Wal-Mart may seem, it is actually extraordinarily elitist. Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit; less than 1 percent of CDs do that kind of volume. What about the 60,000 people who would like to buy the latest Fountains of Wayne or Crystal Method album, or any other nonmainstream fare? They have to go somewhere else. Bookstores, the megaplex, radio, and network TV can be equally demanding. We equate mass market with quality and demand, when in fact it often just represents familiarity, savvy advertising, and broad if somewhat shallow appeal. What do we really want? We're only just discovering, but it clearly starts with more. To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service (owned by RealNetworks) that currently offers more than 735,000 tracks. Chart Rhapsody's monthly statistics and you get a "power law" demand curve that looks much like any record store's, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero - either they don't carry any more CDs, or the few potential local takers for such fringy fare never find it or never even enter the store. The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody's top 100,000 tracks streame
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... (The record) industry has a poor sense of what people want. Indeed, we have a poor sense of what we want. We assume, for instance, that there is little demand for the stuff that isn't carried by Wal-Mart and other major retailers; if people wanted it, surely it would be sold. The rest, the bottom 80 percent, must be subcommercial at best. But as egalitarian as Wal-Mart may seem, it is actually extraordinarily elitist. Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit; less than 1 percent of CDs do that kind of volume. What about the 60,000 people who would like to buy the latest Fountains of Wayne or Crystal Method album, or any other nonmainstream fare? They have to go somewhere else. Bookstores, the megaplex, radio, and network TV can be equally demanding. We equate mass market with quality and demand, when in fact it often just represents familiarity, savvy advertising, and broad if somewhat shallow appeal. What do we really want? We're only just discovering, but it clearly starts with more. To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service (owned by RealNetworks) that currently offers more than 735,000 tracks. Chart Rhapsody's monthly statistics and you get a "power law" demand curve that looks much like any record store's, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero - either they don't carry any more CDs, or the few potential local takers for such fringy fare never find it or never even enter the store. The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody's top 100,000 tracks streame
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