the long tail: hits and niches

by eug
July 31, 2006 4:34 AM
1 Comment
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Is anyone else out there currently reading Chris Anderson's "The Long Tail"? Or has anyone already read it?

While I am only on page 87 of the 220+ page book, I am equally engaged and provoked by Anderson's ideas and examples exploring the idea that "technology is turning mass markets into millions of niches." His core concept (summarized on Page 53) is:

Our culture and economy are increasingly shifting away from a focus on a relatively small number of hits (mainstream products and markets) at the head of the demand curve, and moving toward a huge number of niches in the tail. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly targeted goods and services can be as economically attractive as mainstream fare.

Read that quote a couple of times... then ponder. I have to wonder what ideas will emerge guided by such thinking and what affect those ideas could have within the future film business?

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More: The Biz

1 Comment

  • Brian Newman | July 31, 2006 8:20 AMReply

    Eugene - It's a good book, and an argument that will apply to a lot of indie business models in the future. It's been succesful enough just as an article in Wired and online that many (my org included) are changing their business models as a result.

    You should check out last week's Wall Street Journal for an article they did that has some pretty good push-back on the concept.

    The one thing I keep thinking about in the long tail, however, is that most people seem to be missing the bigger point. It's not that any one niche will become important, it's the aggregate of the niches, the tail itself that will be profitable. Any one niche may occasionally have a hit (like "Inconvenient Truth" is a hit in the environmental niche), but Amazon,Netflix, etc make money by aggregating all of these niches.

    So, for indies, it probably doesn't mean much change for each individual indie, or even for niche distributors, but it does mean more success for places like Netflix (or MySpace) where one can find multiple niches. Narrowly targeted goods (like most indie films)can be more easily found and somewhat more profitable, but large sums of niche products will be the real money-makers. That's pretty old fashioned, and it's how Lions Gate survives- by having a large library of titles that appeal to multiple niche markets, and that collectively bring in probably 3/4 of their overall revenue. I think indies will best capitalize on this by jointly marketing their films online, forming communities around niche subjects, etc. IndieWire Loop then can be very helpful in this regard.