The Idiocentric Long Tail

It's all about determining your own interests.

Chris Anderson's latest Wired article is mostly an introduction to his upcoming book. Not to say it's a bad article, just not quite as revolutionary as the first. With all that said, the last paragraph got me thinking . . .

The mass market is yielding to a million minimarkets. Hits will always be with us, but they have lost their monopoly. Blockbusters must now compete with an infinite number of niche offerings, which can be distributed just as easily. Justin Timberlake still makes albums, but today he has thousands of bands on MySpace as rivals. The hierarchy of attention has inverted – credibility now rises from below. MTV and Tower Records no longer decide who will win. You do.

It was mostly the last few sentences that got me: "The hierarchy of attention has inverted - credibility now rises from below. MTV and Tower Records no longer decide who will win. You do." I hadn't really thought about it before, but this is right inline with my idea of idiocentricity:

[Idiocentricity is] an individual determining his or her own influences . . . It is what makes the internet such a powerful medium, and what makes blogs and other social software such a great addition to the web's landscape. We have now begun to shift away from messages being broadcast to us by traditional media, instead opting for the route of the internet. This allows us to sit at the center of our media universe and pick and choose what we receive. We are no longer held hostage by the television schedule, rather, we can just tune into an aggregator and receive all the news or entertainment that we've decided we want.

As the name would suggest, we are the center of our own worlds. As Anderson puts it, "credibility now rises from below." Millions of people are determining what they pay attention to. The world is no longer held hostage by the choices of a few programmers. We can now spend our attention anyway we want to. That's powerful stuff.

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T-Shirts and The Long Tail

How we understand a trend like customization online first, take it offline and then bring it back online again.

If I had to boil my interests down to one sentence, it would probably be "The cultural implications of digital technology." I love this stuff. I find it invigorating to think about the larger effects of technology on people: To try to understand what the world will look like five years from now as people take learnings from their interactions with computers and apply it to toasters and mops. (Maybe that's a tough one, but you get my drift.)

With that said, it's exciting to read articles discussing just these kind of ideas. While not necessarily looking towards the future, people are beginning to realize that a huge part of the impact of technology happens outside the world of the technology itself. I like to think that this type of thinking is actually a result of the internet reinforcing the fact that the world is interconnected and following the links is a worthwhile pursuit. With an endless amount of information at our fingertips, we are forced to become more selective, a process that trains our brain as a different kind of filter. Most people have noticed that filter show up offline, as they read the newspaper with a closer eye or question a conclusion in a Newsweek article. That's what I'm talking about. Those are big changes in the way people think that come as a result of technological innovation.

Anyway, my real point here, and the reason I started writing this, is because I was reading a New York Times article about how popular limited edition T-shirts are at the moment. While interesting, the article was by no means revolutionary, rather, it was taking the usual New York Times task of covering a trend far after it has been established. Then on the second page, I ran across this paragraph which connected this offline trend to some online events:

These days, whenever two or more people gather to consider the future of consumer society, "customization" and "niche" are certain to be their most frequently uttered terms. Bored and satiated, consumers first took music dissemination into their own hands, via Internet programs like Napster, and then information, in the form of blogs, and, finally, even so-called hard goods, now that it is clear that anyone, more or less, can start a clothing company. As with garage bands and personal Web pages, a little alcoholic lubrication rarely seems to hurt at the point of conception; neither does a taste for unabashed amateurishness, communal expression and the exuberantly ad hoc.

The trend towards customization is a great example of people getting so accustomed to a digital occurance that it moves offline. On the internet, nearly anything can be customized to your specifications. That's because everything's digital and creating something that unique to you is as easy and rearranging a few bytes. Once people get used to that, however, they begin to expect it in other places, like their clothing.

This is where things get interesting. In the past customized or limited edition clothing was problematic because production in small quantity is so expensive and stores couldn't afford to waste shelf space on goods that would only be bought by a few people. That meant that these short-run articles were either marked up to make it worthwhile to the store, or required visiting a manufacturer who works in single items (which again becomes an expensive affair). However, when you bring the internet back into the equation, all of a sudden limited edition/custom becomes a reality.

Thanks to the long tail (which basically says that because the overhead cost of shelf space is not an issue online, there's a lot of money to be made by selling to niches), people can buy their limited edition t-shirts for a reasonable price and companies can actually make money off those shirts. Customers are happy. Businesses are happy. The world is now better off because no one ever has to deal with the embarrassment of walking into the party wearing the same t-shirt as someone else.

That's not it, though. No, no, no. Now that the trend has been brought back online (remember we've gone online, offline, online), we can bring in other digital principles and ideas. Take Threadless for example. Threadless sells t-shirts. But not just any t-shirts, they sell t-shirts designed by regular people. That's not even what makes them so exciting, though, those designs are chosen by regular people. Actually, their voted on by regular site visitors. As described on the site:

Threadless is an ongoing tee shirt design competition. Designs are put into the running to be scored for 7 days. After those 7 days high scoring designs are chosen to be printed and sold from our "SHOP" section!

So there it is, they take a trend of customization, add in a touch of participation and you have (what seems to be) a successful business. Viola.

Now wasn't that easy?

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Blockbuster Takes Aim at The Long Tail

We've all seen the obnoxious Blockbuster ads celebrating the end of late fees by now. Obviously this is all part of an elaborate plan by Blockbuster to contend with Netflix, who has clearly taken away enough business to make Blockbuster rethink its strategies. (They even have added a suspiciously Netflixian DVD-by-mail service.)

Anyhow, my point in all this is that essentially what Blockbuster is trying to do is combat the long tail. How does a video store with physical space constraints fight against a digital service like Netflix that doesn't have to worry about the costs associated with owning property across the nation? I expect that what Blockbuster is going to find out is that this "no late fees" thing is going to annoy people more than anything else.

In the last year or so Blockbuster has started an in-store game service called "Game Pass." It allows customers to pay $19.99 a month and rent as many games a month as they'd like (either one or two at a time), with no due dates. However, a friend of mine who is a fairly serious gamer, has told me how much he hates the service. As a non-member it seems that because people can keep games as long as they'd like he can never get anything he wants. So what has he done? He's given up trying to rent from Blockbuster.

I imagine we may see something very similar happen with this new Blockbuster plan. What happens if everyone just keeps everything for the seven days (after that you have to pay for the movie)? Blockbuster will have very little in stock and I imagine people will get quite aggravated with the lack of stock. Blockbuster actually put forward a (half-hearted) answer to this question in their no late fee FAQ:

11. Aren't you worried that you won't have enough movies and games if everyone keeps their rentals longer?

A: We will be carefully monitoring the movie and game selection to make sure we maintain our current levels of product availability for you. However, it's in everyone's best interest to return their rentals by the due date, even with the end of late fees, to ensure that we have the movies and games you want to rent, available when you want to rent them.

Blockbuster is putting their trust in people acting in their "best interests," when they're in fact referring to everyone else's best interests. Honestly, it's in my best interests to get the maximum value out of my rental, thereby holding it for the maximum amount of time, is it not?

The reason Netflix works is because they've got such an exhaustive stock that they don't have to worry about human nature. Customers can hold things as long as they want, but that means they can't have another movie in its place. Basically everyone has three movies and they can do whatever they want with them, decide what your "best interests" are and follow them.

If Blockbuster really thinks that people won't take advantage of this system they've got another thing coming. Most people will take all seven days if you give that to them. I know I will (not that I rent movies from Blockbuster, but you get my point).

In the end, I wouldn't be surprised at all to see Blockbuster either sink or pull back a great many of their stores and focus on their mail service in the coming years. While I don't doubt there will always be some place video stores to give you what you want when you want it, I don't imagine that a behemoth like Blockbuster will be able to survive. Is it possible that the long tail will help to bring back the Mom-and-Pop shops that have been destroyed by the franchising of America? Because they don't have to worry about the same overhead as these conglomerates they may find they are better suited to survive the long tail explosion and provide the immediate satisfaction that people will always desire. I know when I'm given the choice I always go to the local store instead of Blockbuster.

At the very least, it's a fun idea. Right?

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Trying to Answer: What is The Long Tail?

In his newest post, Chris Anderson tries to come up with a "pithy definition" for The Long Tail. Here are his attempts:

A) The Long Tail is the infinite shelf-space effect--the new mass market of niches that rises when the existing bottlenecks in distribution that favor hits are removed.

B) The Long Tail is the myriad of niche products whose collective market share can rival the blockbusters.

C) New efficiencies in distribution, manufacturing and marketing are resetting the definition of what’s commercially viable across the board, turning sub-economic customers, products and markets into economic ones and creating a Long Tail of demand.

D) The Long Tail is about the economics of abundance—what happens when the bottlenecks that stand between supply and demand in our culture start to disappear and everything becomes available to everyone.

E) The Long Tail is the story of how formerly sub-economic products and customers are suddenly becoming the biggest market of all.

F) None of the above. Please try harder.

Anderson asks for input, and he has gotten plenty (26 comments as of writing this post). I, of course, added my two cents and gave this as a definition (or part of a definition):

The Long Tail is the other 80 percent of information/data/goods/the world, which before digital technology was near-impossible to archive/store/sell/distribute effectively.

I left all those possible words because I'm not quite sure which is appropriate (or if limiting to one word is appropriate). I really feel as though the long tail is about more than just goods. I think it can extend to information (on blogs) or pictures (via a digital camera) and a myriad of other places. Really, what the long tail is all about is flipping traditional economics on it's head. In fact, the first definition I wrote up was this:

The Long Tail is the story of how unlimited digital space has flipped traditional rules of hit-driven economies on its head.

I don't know if that's a better definition, though. Is it? Does it make more sense? Now that I'm reading through it again it really seems to communicate the main points very effectively. In essence it's about taking that other 80 percent that isn't available in hit-driven economies and getting them to the masses. Because of the massive numbers online, aggregating the sales of non-hits becomes more than a viable business plan, it becomes a great way to make a whole lot of money. Make sense?

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Link from "The Long Tail"

I was just on Chris Anderson's new blog, The Long Tail and noticed an interesting link. On the left side Anderson has a section called "Long Tail comment elsewhere:" and as I was perusing through the links I happened to noticed one I recognized:

Noah Brier
A sidenote on embracing 'waste': "Just think of digital cameras, for example. While you once might not have taken a picture of that sign you thought was funny on the street because you didn't want to waste your film, it's no longer something you worry about. With space no longer an issue you're capturing more of your life."

That's me! I'm incredibly excited about this link. Beyond just being the editor of my favorite magazined, Wired, Anderson's original long tail article really blew up the way I think about the world. It was one of those "wow" moments, where my whole frame of mind changed. To know that he read something I wrote and liked it enough to link to it is incredibly exciting for me.

I guess you could call me a dork, but at least I'm proud of it.

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Long Comments on the Long Tail

I left a fairly lengthy comment on Renee Blodgett's post titled "Internet Archiving & Engaging in Knowledge". Go read the whole entry, but here's an excerpt that really got me thinking:

Clearly, the Internet has opened up a whole new paradigm for learning and communicating. Today, we can participate in television, share news with others and put our own spin on it, and be part of a larger creation. We can edit and build something and engage in what's happening in the world. Hell, we can even be in an Internet library if we choose to.

Obviously blogs are an extension of this empowerment to participate in life rather than have 'life happen to you.'

Yet with so much knowledge out there, we have to choose where to focus our energies and our time. Should we edit some of this stuff out.....who decides what should be available and not available? Do we really want a detailed account of how to build a landmine available to everyone? Who's decision should that be in a democratic society that values free press and unlimited speech?

This is something I've been thinking a lot about lately (and not so lately). So I left this comment:

Just wondering if you ran across this blog entry on the "digital photo effect" hitting all parts of our digital life. Specifically how because it's so easy to have access to every album out there, it's hard to pay a lot of attention to any of them. The article is here: http://www.rootburn.com/2004/12/too-much-of-good-thing.html.

This has also made me think about something I wrote about a while back which related "The Long Tail" to all parts of our digital life (that entry is here: http://www.noahbrier.com/archives/2004/11/the_long_tail_o.html). In that entry I talk about how digital technology allows us to finally archive the long tail of our lives. Now we can keep track of that once missed 80 percent of our time because space constraints no longer exist. I think this is incredibly exciting.

As for the landmine diagrams, anyone could probably take a book out of their local library with the same information. I understand that now they don't even have to leave their houses. But on the other hand, the first site you find when you search for "landmine" on Google is The Landmine Survivors Network (http://www.landminesurvivors.org). Maybe some misguided person will run across that and be swayed.

Just some thoughts.

It was kind of a long comment, and I don't think I articulated myself all that well (I just started writing what I was thinking and posted it). So here's a little more.

First, the entry I was talking about at the beginning of the comment is titled "Too much of a good thing?" and appears on rootburn. Here's an excerpt from that entry:

Back in the day, I'd get a CD and I'd listen to it. A lot. A CD was a considered purchase - if I was going to make the effort to go to the store and spend my hard earned money on it, it was going to be worth it. In the car, at the gym, at work, at home - I'd listen to it everywhere. The first few listens usually couldn't be at work, because I'd be listening. Once my brain knew the album, then it could become soundtrack to whatever else I was working on.

Now, the time between when I think that I might be interested in hearing, say, the new Bjork album and when I can actually have it is minutes. Transaction cost can be as low as free (depending on if I use something like iTunes or something like BitTorrent). Assuming I used BitTorrent, it's cost me nothing and taken me no time, so there's no inherent pressure to listen to it. Repeat this a bunch of times, and all of a sudden, my hard drive is full of music that I've never heard, and the DPE starts to kick in. So what do I do? I listen to the same old albums over and over (lately Akufen), because I know I like them and that they won't disturb me while working. Most of the time these happen to be albums that I've ripped myself, after having listened to the CDs a lot. So having more music available has made me seek the comfort of what I already know. Do I just need more time so that I can "catch up"? Do I need a mobility solution so that I can leverage non-PC time? Do I need a curator like Activaire? Do I need to raise my transaction costs so that I feel a need to get my money's worth?

Having all this information available at such a small cost has changed the relationship one has with the information. I know for myself collecting music has become a bit of an obsession (I have over 200 albums from this year alone). It's absolutely true that I listen to each less than I would without access to the internet. However, I don't know that this is such a bad thing. I feel much better informed, as though I'm honing my music listening skills by listening to this vast collection. I am better prepared to get a good idea of what I think of an album after first listen and I enjoy the act of listening and critiquing music, as well as the music itself. There's a whole other 80 percent of the world that's been opened up to me and I'm trying to take advantage of it.

I'm not exactly sure how much this relates to what Renee wrote in the entry (I suggest you go read the entry and her blog, both are quite good). However, I get excited when I see the long tail showing up in new places and being spoken of in new ways.

I guess I'm just a dork.

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The Long Tail of Digital Life

Everything is changing in our digital world of endless possibilities.

It's been a couple days since my last posting, which I apologize for. I no longer work at American Demographics and have been kind of busy in my job search. I was in Chicago for two days this week and have had all sorts of phone calls and interviews in the last few days. I learned a ton at American Demographics and made some fantastic contacts and I wouldn't trade the experience for the world. However, it's incredible to think that I could be doing something completely different come next month. My new opportunities are all unique and offer me chances to use all different kinds of skills that I think I possess. In college I studied media, culture and postmodernism. Essentially my interest was in understanding how media and culture interact and why people think the way they think. As long as what I do next allows me the opportunity to think about those kinds of issues then I think it's a good fit. Recently my biggest interest has been how digital technology is shaping the world we live in and the way people think and feel. This also needs to be an aspect of my next job. I am not interested in only talking about analog media because I think in the coming years those media will become increasingly irrelevant in our lives. The possibilities of digital are literally endless as opposed to the limited analog spectrum.

Everything is changing in our digital world of endless possibilities. Gone are the traditional rules associated with analog media and what Chris Anderson refers to as "hit-driven economics" in his Wired article "The Long Tail".

Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots.

There are profound differences associated with the endless opportunities available to us in nearly every part of our lives. No matter what your interest, there's someone on the internet talking about it (most likely there's even a blog about it). Successful internet businesses have taken that model of near-unlimited availability and made huge impacts. No matter what book you want to read, it's only click away thanks to Amazon. No matter what movie you want to rent, it's available on NetFlix. Their catalogs are nearly endless. The world is literally at our fingertips and it's changing traditional economic rules that once only gave shelf space to those titles that 100 people wanted, rather than just one. Because hard drive space is so cheap, iTunes can literally have a song just for you. A meat-space music store can't afford to waste shelf space on a CD that only one person is interested in buying. When every CD is just a series of ones and zeroes, however, who cares if only two people buy it? There is no cost associated with leaving the music up for others to find and buy. In fact, when all those little sales are aggregated, these companies are finding that they're making a pretty penny. Something like shelf space is an analog-world limitation that drove businesses to let hits drive their business plan.

Businesses needed to understand that this is a "hit-driven" economy to survive. Using this model, at least 80 percent of the entertainment industry's output will not be a hit. This is known as the 80-20 rule and Anderson explains it like this in "The Long Tail": "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." However, in a digital world where space has virtually no cost, hits are not the only things that make money. While there's no doubt that there's still an elite 20 percent, the other 80 percent is selling when given the chance. Anderson calls the other 80 percent misses:

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.

This other 80 percent is what Anderson refers to as "the long tail." Rhapsody is a subscription-based music service with over 735,000 songs. Of those three-quarters of a million tracks, nearly every one is played at least once a month.

Chart Rhapsody's monthly statistics and you get a "power law" demand curve that looks much like any record store's, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero - either they don't carry any more CDs, or the few potential local takers for such fringy fare never find it or never even enter the store.

The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it's just a few people a month, somewhere in the country.

This is the Long Tail.

This is a profound change in the way we understand and interact with our world. Just think of digital cameras, for example. While you once might not have taken a picture of that sign you thought was funny on the street because you didn't want to waste your film, it's no longer something you worry about. There's little doubt that the majority of your pictures still come from parties or trips where the old film camera would have been used anyway. But look at your pictures and you'll notice that the vast majority are of little random events that start to add up. With space no longer an issue you're capturing more of your life. When you eliminate analog space restraints whole new models emerge. Just look at the explosion of blogging. As people are finally beginning to see that the internet is a two-way medium they're doing more than just reading the New York Times online. By publishing to the web they're creating millions of niche sites. Now everyone has a place to go and communicate. There are a few largely read blogs, but the rest of the blogosphere, which Technorati puts at 4.7 million is made up of little blogs. Read by a few dozen or hundred people a day. What these blogs are providing is the other 80 percent that you're not getting from the mainstream news. Because you can find a blog focused on nearly anything you can get the information that newspapers and magazines can't afford to give space to. Do you think that the New York Times technology section could possibly cover every new gadget in the same way Engadget or Gizmodo can? The internet got closer with sites like CNet, but even they have too wide a focus and too traditional a model to capture the entire segment in the same way a blog can.

These kinds of patterns are visible all over the digital world. But just noticing them isn't enough. Since I'm a strong believer in McLuhan, it's not enough to watch (or use) the internet, but you must understand the people who watch (or use) the internet. What kind of effects does this shift have on their non-digital life? How does it affect friendships when everyone now has the ability, thanks to IM and email, to communicate with those other 80 percent of people they would have lost touch with? What kind of other media will people consume when they lock in on their interests online and get their personal fill of information? Now that we've got this space that exists for us, how will we interact with a government that claims to exist for us? The internet is helping us understand the power of the individual. That's what happened on Howard Dean's campaign. It wasn't the internet that made it a success; it was what the internet taught those involved. It showed millions of people that they can be involved and most likely changed the way politics will work forever. The Dean campaign used the internet to reach the portion of the electorate that hadn't been reached. They figured out that instead of getting a few $2,000 checks from the "hits," that you get a bunch of $20 checks from the "misses."

These trends will only continue. As people continue to be empowered by the internet, the difference between success and failure for many companies is going to be whether they understand the long tail. We're already seeing the effects on bookstores and CD shops that can't compete with the internet's unlimited selection. But there's more to it than just that. The internet is encouraging more independent artists and producers to come out of the woodwork. Thanks to the long tail, the most obscure band can be listed next to U2 and sell. Entrepreneurs can start their own business online without having to fork out the money for retail or office space. These are the places that the long tail really excites me. We have been taught in the past that only 20 percent of ideas will be hits and therefore many people suppress ideas that could be brilliant because of the fear of failure. This knowledge was internalized whether we wish to admit or not. Those who were most successful in the past tending to be able to take risks and look beyond this traditional rule. However, the definitions of success and failure are changing by the minute as the internet teaches people there's always someone else out there who shares your interests.

Sadly, I expect that many institutions will try to suppress this tail out of fear. We consistently hear from the mainstream media that the internet can't be trusted. That it doesn't live by the same ethical standards. Or we see the RIAA suing file sharers, even though there's no proof that swapping songs hurts the music business. Or the government, imposing moral guidelines on television and radio to flex its muscle and show the country that it still runs the place. Now, take a look at the revolutions that are going on to fight these institutions. In response to the mainstream media the blogosphere is exploding as a source of breaking news and commentary as well as a check and balance to their coverage (e.g., Rathergate). In response to the RIAA people are still sharing songs and Wired magazine is putting out a CD of songs with Creative Commons licenses by major artists (Beastie Boys, David Byrne, Spoon, etc.). In response to the government censorship, satellite radio is making a big push to be the new home of radio without the FCC interference. By signing Howard Stern, Sirius signaled to the world that this will be a space where people can speak freely.

This is a battle between old and new, between analog and digital. In the end, I have little doubt that digital will win out. The day will come when people embrace the new rules of the digital world and that suppressed 80 percent begins to emerge. I'm excited for that day.

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