The Long Tail By Chris Anderson [October 2004 WIRED]
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.
On page 2 the question is asked,
“What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?”
The answer?
“Most people guess 20 percent, and for good reason: We’ve been trained to think that way. The 80-20 rule, also known as Pareto’s principle (after Vilfredo Pareto, an Italian economist who devised the concept in 1906), is all around us. Only 20 percent of major studio films will be hits. Same for TV shows, games, and mass-market books – 20 percent all. The odds are even worse for major-label CDs, where fewer than 10 percent are profitable, according to the Recording Industry Association of America.
But the right answer, says Vann-Adibé, is 99 percent. There is demand for nearly every one of those top 10,000 tracks. He sees it in his own jukebox statistics; each month, thousands of people put in their dollars for songs that no traditional jukebox anywhere has ever carried.
People get Vann-Adibé’s question wrong because the answer is counterintuitive in two ways. The first is we forget that the 20 percent rule in the entertainment industry is about hits, not sales of any sort. We’re stuck in a hit-driven mindset – we think that if something isn’t a hit, it won’t make money and so won’t return the cost of its production. We assume, in other words, that only hits deserve to exist. But Vann-Adibé, like executives at iTunes, Amazon, and Netflix, has discovered that the “misses” usually make money, too. And because there are so many more of them, that money can add up quickly to a huge new market.”
Counterintuitive, eh? Well, I’ll have to see what our Amazon numbers look like from the our little itty bitty niche market corner of the world. I highly doubt we are contributing much to a huge new niche market. Travel? Not new. Sales? Small enough to be considered “Niche”.