Tagged: the long tail

“The biggest money is in the smallest sales”…and Kevin Kelly

This week I revisited a reading Adrian set weeks ago by Chris Anderson called The Long Tail, which I’ve already mentioned here before.

Anderson’s article astutely considers the challenges of broadcast and other media in the Internet Age; from the constricting physics of broadcast technologies that through limited resources rely on aggregating large audiences in one geographic area, to the problem of marketing unique films for profit (in a hit-driven industry). He said:

In the tyranny of physical space, an audience too thinly spread is the same as no audience at all…

But most of us want more than just hits. Everyone’s taste departs from the mainstream somewhere, and the more we explore alternatives, the more we’re drawn to them.

He acknowledges that in recent years this ‘alternative’ content has been ‘pushed to the fringes by pumped-up marketing vehicles’ built to order by industries that desperately need them. He said:

Hit driven economics is a creation of an age without enough room to carry everything for everybody.

Today, Anderson says, with online distribution and retail, we are entering a world of abundance, and the differences are profound.

Anderson references Albert-Laszlo Barabasi’s s 80/20 rule from Week 8: People generally perceive that only 20% of major studio films will be hits (same for TV shows, games, mass market books)… However, Robbie Vann-Adib CEO of Ecast, a digital jukebox company evidences his own user statistics to counter that 99% of the top 10,000 of his some 150,000 song titles are rented or bought at least once per month. His point is that each month thousands of people put in their dollars for songs that no traditional jukebox anywhere has ever carried. He’s saying that the hit-mindset is old; we think that if something isn’t a hit, it won’t make money and so won’t return the cost of production. What Vann-Adib is discovering is that there is a market for the ‘misses’ too (and because there are so many more of them, that money can add up quickly to a huge new market)!

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. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.

Anderson also puts the misunderstanding that ‘only hits deserve to exist’ down to a lack of understanding of what people want. For instance, the assumption that there is little demand for stuff that isn’t carried by major department or grocery retailers – if people wanted, surely it would be sold, right? This thinking is an equation of mass markets with quality and demand, when in fact it often just represents familiarity, good advertising and a broad and probably shallow appeal. What do we really want is a critical question, now.

These are important lessons for someone thinking of becoming a producer!

What Anderson introduces as the Long Tail in the example of Rhapsody, a subscription-based streaming music service where, in every instance of adding thousands of songs to their already massive library, those songs always find an audience, even if just a few people a month.

“You can find everything out there on the Long Tail.” 

Here there are niches by the thousands, genre within genre within genre. Foreign bands, obscure bands on even more obscure labels – many of which don’t have the distribution clout to get into larger labels. And a lot of crap – which is easily avoidable by smart database searches and go unpaid for unlike the shitty songs hiding in the middle of that $20 CD tracklist. He says:

Combine enough nonhits on the Long Tail and you’ve got a market bigger than the hits.

That’s a big thing to say. Anderson quotes venture capitalist and former music industry consultant Kevin Laws, “The biggest money is in the smallest sales.”

The market that lies outside the reach of the physical retailer is big and getting bigeer. This is the Long Tail.

The reason for this in-depth revisit of Chris Anderson’s article is because I came across a blog by a man named Kevin Kelly. He has multiple websites / pages, and is a really decent example of someone using the Network as a place to connect / share/ host their various interests with an audience. Very interesting place.

He reminded me of Adrain Miles – older guy who’s totally down with it in a way that the Network has somewhat become a driving force of their life. Just watch how animated Adrian gets about the Network in Symposiums – he earns a living from being a teacher of this stuff, and talks of the things he’s shared with his kids about it. Likewise, Kelly set up a hilarious website of Cool Tools he thought his kids should really know about (like excellent quality pencil sharpeners). It’s not difficult to tell that Kelly would have a huge readership; he gets Tweeted about, and even featured in one of the first This American Life episodes! Now look at me spreading his links all over the internet like a devoted fan!

Someone on my Twitter feed linked me to a great post of his titled 1,000 True Fans. He riffs on this idea of the Long Tail by first acknowledging this:

The long tail is famously good news for two classes of people; a few lucky aggregators, such as Amazon and Netflix, and 6 billion consumers. Of those two, I think consumers earn the greater reward from the wealth hidden in infinite niches.

But he notices that the people left out of the Long Tail equation are the creators; the artists, the producers etc. Yeah! What happens to us!? His answer to artists wanting to escape the ‘quiet dolrums of minuscule sales’ is to find 1,000 true fans. He says the gist of 1,000 true fans can be stated simply:

A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author – in other words, anyone producing works of art – needs to acquire only 1,000 True Fans to make a living.

Hmmmm? Kelly says it way too well for me to not just frigging quote him again:

A True Fan is defined as someone who will purchase anything and everything you produce. They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They can’t wait till you issue your next work. They are true fans.

Right. But isn’t that what producing-people have always aimed for anyways – someone to buy their stuff which equals some kind of profit? Maybe not as specifically. Kelly contends that 1,000 is achievable; it happens by very directly engaging ‘lesser fans’ and converting them into True Fans. This means picking up 1,000 people from the sales flatline of the Long Tail and bringing them ‘up’ to the fandom that exists right before the peak of popularity (Kelly has a nifty diagram of this).