Are You Profiting From the Long Tail?
Still think being an independent solo artist, writer or performer means you're small potatoes? Think again. An article in the October 2004 issue of Wired magazine has been causing a stir and forcing people to rethink the realities of modern entertainment marketing and sales.Please read the article, by Wired's editor in chief Chris Anderson, and get a grip on the way indie, small-budget and self-produced products are weaving their way to end users -- while turning a profit!
Here's the gist of the article: The old way of marketing and distribution was based on physical scarcity. Entertainment products (music, books, film and video games) were primarily offered to the public through retail locations. Due to costs and space limitations, only the top-selling titles were stocked in stores. If a title couldn't justify its shelf space, it was eliminated. Hence the creation of lowest-common-denominator hits and bland superstars.
Many creative people and products obviously still found an audience via other means (live events, word of mouth, creative marketing), but the mainstream sales channels were mostly unavailable to these "fringe" players.
However, in recent years successful Internet-based companies such as Amazon, iTunes, Netflix and others have turned the old business model on its head. While all three of the aforementioned web sites indeed sell the "hits," they also see the value in also offering lesser-known titles to their customers. And by doing so, they've seen some interesting results ...
People are willing to explore and try new things. Using posted review comments, ratings charts and personal recommendations, consumers are discovering new music, films and books they would have never found in a retail store.
And -- gasp! -- these fringe titles are profitable. Sales reports indicate that nearly one-third of these sites' revenues come from selections that fall well below bestseller status. Anderson has used the term "the economics of abundance" to describe this development. That's a phrase that resonates with me. Without the limitations of finite shelf space, "scarcity economics" is melting away and giving consumers more choices ... and creative people more opportunities to find an audience.
It's a fascinating read. Again, read the article here. Anderson is working on a full book on the subject. Read his Long Tail blog for updates.