Observation, thoughts, and information.

Heads I Win, Tails You Lose


Are digital distribution tools leveling the playing field for smaller, niche content producers, or does it seem to be still quite tilted, if not more acutely so, in favor of the wealthy, blockbuster producers of content?

Robert Frank, economics professor at the Johnson Graduate School of Management at Cornell University, wrote a column in the New York Times challenging one of the popular theories about the disruptive power of new technologies for digital distribution of entertainment content. He explains that the biggest, most popular content producers are able to use the new technologies as efficaciously as the smallest content producers, which cancels out the potential technological edge smaller producers might believe they could gain.

Frank cites evidence of the dominance of the ‘winner take all’ theory over the ‘long tail in the entertainment industry, noting that the market share of top-selling digital song titles increased to “15 percent of sales in 2011, up from 7 percent in 2007,” and “[t]he publishing and film industries experienced similar trends.”

Frank’s three main ideas for why the “winner take all” theory seems to be dominating the “long tail” theory are:

Time:  The amount of time a person has to consume goods or content has remained constant or is shrinking. The reality of these time-constraints along with the overwhelming avalanche of a too-many-options-to-choose-from marketplace, makes it exponentially more difficult for consumers to decide what they want. Often, they’ll take the easy way out and choose the product with the expensive marketing budget, big stars, and high-production value they’ve heard all about from its deep-pocketed advertising campaign.

FOMO (Fear Of Missing Out):  Social Media technologies have reinforced tendencies of people to not want to miss out on experiencing and, later being part of the discussions about, best-sellers and blockbusters. Just look at the terrific yet disturbing Frontline documentary: Generation ‘Like’ to see where this is headed.

Irrelevance of Information & Geographic Asymmetries:  Along with the above two considerations, customers across the globe who can avail themselves of being better informed about, and having easier access to, high-production value entertainment and goods, are likely to choose the products they perceive to be of highest-quality, over potentially lower-quality, niche, local goods.

Do you think your business can thrive using a “long tail” strategy to capture a niche market share, or do you believe it’s necessary to transform your business into a giant that sells blockbusters?