k wrote:
] ] Forget squeezing millions from a few megahits at the top
] ] of the charts. The future of entertainment is in the
] ] millions of niche markets at the shallow end of the
] ] bitstream.
]
] [ The editor of Wired takes a stab at redefining the business
] model that entertainment companies should be looking at.
]
] There are some compelling statistics in the article, and a lot
] of arguments similar to those made by myself and others around
] here in the past few years. Leveraging the power of
] collaborative filtering and network effects inherently,
] flexible pricing based on popularity metrics, modified cost
] structures and the removal of locality as a parameter for the
] customer base.
]
] If his numbers are accurate, anywhere between 20 and 50% of
] existing potential markets may be untapped because there's
] simply no way to get people to the product efficiently in the
] physical space. That's an awful lot of money and more
] importantly, an awful lot of diverse cultural media that could
] be available to the greater audience. -k]

I need to go back and re-read this article, but on re-reading this meme and on first blush, this isn't how the market will work. Hits are hits because they receive marketing dollars, and those dollars need to be repaid. Unless I'm missing something, there will always be a need for those services (and that's actually what record companies do really really well) and so that has to be reflected in the cost. All that's really happening is that the distribution mechanism goes to something that's much much more cost effective. That's it. It's as if it was buying software or fonts or something. It doesn't take 3 ceedees and a bunch of printed shrink wrap packaging and the associated trucking to get it into my hands exists anymore. But the fundamental JOBS that the industry does remain the same. Just the price point has changed.

The second part of this is that the industry has known and talked about this for 15 years. They've known that this was going to happen. I can dig out issues of Wired and Mondo 2000 and NAB and a bunch of other rags that extolled the virtues of VoD and other content on demand models. Fer chrissakes, Time Warner did a trial with SGI in Orlando back in 1993. This isn't a secret and they've calculated how long they could withhold the current model of distribution before this would happen. That being said, I think there's plenty of knowledge about what models will work and what won't. It's the WILLINGNESS of the market to pursue those models that's lacking.

RE: Wired 12.10: The Long Tail