Now this book is quite amazing. I had heard about it some weeks ago, so I made a special point of attempting to find it when I went shopping in the US.
Anderson’s central thesis is this: with the introduction of the internet and new ways of working we now live in a time of abundance and practically infinite choice. And as a result, the rules completely change. No longer are we constrained to think in terms of “hits” or “blockbusters” or “top selling brands”. We can now buy anything we like, and it’s available for us to do so in just a few seconds of clicking or calling someone. And, what’s more, it’s happening all around us today.
What fascinates me most is how it seems to overturn one of the most powerful “laws” of doing business. A long-standing rule of business is the Pareto Principle, commonly known as the 80:20 Rule. Put simply, it means that, to make money, companies should only concentrate on their highest selling products or services. The slow movers and niche items are too expensive to store, and so they should be ruthlessly excised. The result, if you haven’t already seen it around you, is uniformity, blandness, lowest-common denominators and a staggering lack of choice.
These days are coming to an end.
The Long Tail hypothesis says that the action in the future will be in the lower selling categories. People are increasingly seeking out those things that they want to buy – the niche music tracks or clothes, the arty Spanish films, the British comics from the 1980’s. Whatever you are in to, you can find it quickly and buy it for a cheap price, thanks to Ebay, Google, Amazon and a host of smaller sites and blogs. The Long Tail idea says that hits will decline in importance as interest in niches grows and grows and grows.
This is nothing short of a crisis for traditional big media organisations, whose job it has been for a century to sell a consistent message to as many people as possible. Now, with the explosion of new channels of communication, people are turning off their radios and TV sets, reading blogs instead of newspapers, downloading indie music instead of going to the record store, ordering customised T-shirts, footwear and jewelery over the web instead of accepting the limited offerings in the local shop. The message, loud and clear, is “Blandness and Hobson’s choices? No thanks”.
Mega celebrities, big-name TV shows, best-selling newspapers, hit pop bands, blockbuster movies: all are beginning to show significant drops in their market-worth and the trend is getting more pronounced with each year. The world of mass communications is splintering into a million pieces, and no-body seems to be able to put this Humpty Dumpty together again.
Does this mean that the age of the hit is well and truly over? Of course not. Just look at the recent global racism furore on Celebrity Big Brother for instance. However hits will possibly be more random in the future – arising from anywhere, and disappearing back into obscurity once their time in the spotlight has passed. It’s likely that hits will be much harder to achieve, and more limited in their impact. Marketing’s problem will be in getting their message out to a truly fractionalised audience, with no-one consumer quite using the same channels of communication.
Passive Impressions 
A fascinating view of how the internet is changing consumer habits and business models. I certainly recognise myself in those descriptions!
It certainly helps to explain, for me, why there are so many so-called “celebrities” around the place these days.
I’ve been reading about the Long Tail at the Hacking Netflix site (www.hackingnetflix.com ; not a hack site, just news and stuff relevant for Netflix users) and found it really interesting. I expect I’m probably more of a niche consumer, and it’s true that internet access and online shopping venues have made it possible for me to track down out-of-print titles, rent more DVDs, etc.
I think anything that helps indie producers and smaller businesses succeed is definitely a Good Thing. More exposure means easier access overall, even if more people are interested in something. But I guess it does also encourage more flashes in the pan and hack “celebrities”.
I thought of you while reading this book, PC. You and K would be well along this curve already. What the author is suggesting is that many more people will start to investigate niche areas.
An interesting example quoted in the book is Bollywood. There are something like 1.7 million Indians in the US, which is a sizable enough market. However they are so dispersed around the US that you will hardly ever see a Bollywood movie in a cinema. With innovations such as Netflix, they can see any Bollywood movie they want. As far as I know, cinema viewing in the US has taken a huge dip, probably because of the choice now available to home consumers.
These are interesting times!
I have to admit to only having been to the cinema a handful of times since signing up with Netflix. I can imagine how much an impact this trend is having on the theaters themselves. Perhaps an incentive to offer more reasonable pricing, and/or a wider variety of films?
I think it’s really cool that people are being exposed to more sources for news and information, too. I really do think that the prevalance of blogs and outside news sources has done a lot to influence the current political situation in the US, for example.
The more alternatives out there, the better the odds for finding quality sources of news, entertainment, and products.
I don’t think reducing their prices will keep them in business. I think they have a big problem on their hands, potentially. It will be feasible, however, for them to show any film they want to. Cinema is all going digital and presumably they will have access to a huge library of movies.
The problem is how many people are interested in what you might want to watch in a cinema? 10? 50? 100? Does the cinema “right size” down to rooms of 20 or 30 seats, and show lots of movies instead – almost on demand? Or do they consolidate, so that what you are left with are just one or two cinemas per major-population centre? Nobody is saying there won’t be blockbusters or anything, it’s just that shared experiences will be less common and drawing fewer crowds than in the past. Or at least that’s the idea.
Very interesting. The 80/20 rule used to be gospel in advanced business courses…Now if they could only use technology to repeal the “Learning Curve”.