Being direct... AdVantage Sep 2006
Mass meets its Nemesis: The Tale of a Tail ...
- the internet makes focusing on the bottom of the demand curve worth it ...
Well, I don't like to have to start any column with the words 'I told you so' because it makes me sound like some kind of smartass, but the events of the past 3 weeks have left me more than 'intrigued' to say the least. As you might remember from previous columns, I usually travel to Germany around the first week of June to attend an international distributor conference held each year by our mobile communications software supplier. In addition this year, as I was already in Europe, I made a quick 3-day side-trip to take in the US DMA's DM Days in New York conference.
While sitting in the airport lounge waiting for my flight to JFK I picked up a copy of 'The Times' and found the first of a two-part excerpt from a new book by editor in chief of Wired magazine, Chris Anderson, entitled The Long Tail: Why the Future of Business is Selling Less of More. I have obviously ordered a copy thereof, but until I can get it and perhaps provide more feedback in a future column, I'd like to whet your appetites a little and maybe give some justification to my opening paragraph.
For some years now I have been concerned (and have often written about) the expanding effect which 'being connected' is having on the traditional 'mass' media, and specifically on their continued ability to remain a major source of audience for advertising. The audiences of these media are dwindling, as is the level of influence of the ads carried in them. Chris Anderson puts it like this: '...Males aged 18-34, the most desirable audience for advertisers, are starting to turn off the TV altogether, shifting more and more of their screen time to the internet and video games. The ratings of top TV shows have been falling for decades, and the No 1 show today wouldn't have made the top ten in 1970!...'
At the root of this, suggests Anderson, is the vulnerability of the star-making system which Hollywood began eight decades ago. The way to influence the mass - has always been to create mass-interest. This obsession with building block-busters has created a world where everything is about the 'next big thing'. Massive media and entertainment industries grew up on the back of box-office rockets, gold records and double-digit TV ratings. Our media remain obsessed with what's hot and what's not. In short, contends Anderson - HITS rule.
But he goes on: '…look a little closer and you'll see that this picture, which first emerged with the post-war era of radio and television, is now starting to become tattered at the edges. No 1 is still No 1 but the sales that go with it are not what they once were. Most of the top 50 best selling albums of all time were recorded in the Seventies and Eighties (the Eagles, Michael Jackson), and none of them was made in the past five years. Hollywood box-office revenue was down by more than 6% in 2005, reflecting the reality that the cinema-going audience is falling even as the population grows. Every year network TV loses more of its audience to hundreds of niche cable channels ...'
This shattering of the mainstream into a zillion different cultural shards is something that upsets traditional media and entertainment no end. After decades of executives refining their skill in creating, picking and promoting hits, suddenly those hits are not enough. The audience is shifting to something else, a muddy and indistinct proliferation of…well; we really don't have a good term for such non-hits. They're certainly not misses, because most were not aimed at world-domination in the first place. They're 'everything else'.
'…it's odd that this should be and overlooked category' says Anderson, '…we are, after all, talking about the vast majority of everything. Most movies aren't hits; most music recordings don't make the top 100; most books aren't best sellers; and most video programmes don't even get measured by Nielsen, much less clean up in prime time. The simple picture of the few hits that mattered and then everything else is becoming a confusing mosaic of a million mini-markets and micro-stars. Increasingly, the mass market is turning into a mass of niches ...'
According to Mr Anderson, what's truly amazing about the Long Tail is the sheer size of it. Again, if you combine enough of the non-hits, you've actually established a market that more than rivals the hits. Take books. The average Borders (book store) carries around 100 000 titles. Yet, about a quarter of Amazon's book sales come from outside of its top 100 000 titles. If these growth trends continue the potential book market may actually be half as big again as it appears to be.
The thing that makes The Long Tail worthy of closer consideration however, is its primary economic trigger: reducing the cost of reaching niches! There are three main influencers of this phenomenon say Anderson: i) democratising the tools of production; ii) cutting the cost of consumption by democratising distribution; and iii) connecting supply and demand. In each of these, the role of technology and more specifically inter-connectivity - is vital. And what's more, its influence is set to explode. Please do get yourself a copy of this most interesting new view of the principle of demand!
Finally, my three days at the Jacob K Javits Convention Centre in New York leave me personally in no doubt whatsoever that Chris Anderson is absolutely on the button. Presentations like 'Personalized Marketing Engines: Letting Customers Determine Content and Channel' and the discussion chaired by Sara Holoubek called 'Web 2.0: Emerging Technologies' and featuring Bill Nussey CEO of Silverpop (www.silverpop.com) together with Daron Babin Co-founder of WebmasterRadio.FM (www.webmasterradio.fm) and others, is a clear indication of the fact that content which appeals to highly defined niches; as well as internet-based delivery systems that package such content 'on the fly' - are not only on the horizon, but already available!
We may already need to take a serious look at - the importance of mass!!