Chasing Some Tail

Buzz aplenty over Wired editor Chris Anderson’s book “The Long Tail”, which contends that the efficiencies and mass customization of an Internet economy are increasing the net value of products that haven’t traditionally been interpreted as popular.

For example, the 7406th book title on the bestseller list might not be profitable for a bricks-and-mortar store to keep in stock; but Amazon, because of sheer scale, is going to make a healthy buck selling zillions of copies of that same book. And so niche markets and segmentation open up and become profitable as the technology efficiencies multiply. The “tail” of the news business might be cable, radio, the blogosphere, and podcasting – in that descending order. Collectively these formats eroded the magnitude and impact of the “head”, the traditional nightly network news, which has a seen a precipitous decline in market share over recent years.

In today’s WSJ Lee Gomes takes a whack at this theory and suggest that on a simple percentage basis, hits are still a critical factor, and they dwarf niche sales. Anderson smacked right back with a post that contains with a lesson in fractions: He points out that simple percentages don’t tell the story. The denominator is getting massive as the online economy provides the capacity for an enormous back catalog to be made available to consumers, and furthermore Gomes was very selective in the examples he chose.

But it seems to me that the “hits” are having their market share eroded from an entirely new angle, the way media itself is morphing towards user-created content. This type of media isn’t a formalized product that can be stocked by iTunes or Amazon. Right now user content is a couple of dense teenagers with a video camera and a YouTube account. Are people going to buy fewer tickets to ‘Spiderman 3’ because they would prefer to watch those morons light each other on fire? Of course not. But the spectacular explosion of D-I-Y media will eventually erode traditional markets, given enough time. Music, broadcasting, and eventually movies are heading in that direction, and the current numbers matter less than the prevailing trend.

Another impact of the “Long Tail” is cultural. We can communicate in several zillion directions about entertainment, products, and experiences that fit our highly individual passions and localized interests. One of the most popular posts here on Spacetropic, over time, has been the one I wrote about the obscure Irish band Stump. And I was reminded recently that the item I wrote about ‘The Dubliner’ for the Cincinnati Beacon continues to generate page views and discussion months after it was new. For better or for worse we live in a culture where, thanks to technology, everything that was ever done is always present. If it can be digitized it’s immortal, and now even the physical stuff stays around longer in niche market sales.

You don’t need to be an economist or the editor of Wired to conclude that this will increasingly put the voodoo whammy on traditional scarcity and demand.