Monday, March 07, 2005

Long Tail economics

This is an old article, but I have just read it and found it quite thought-provoking. The article first discusses the economics of mainstream entertainment, which offers us low-quality works from the because of their proven economic return. Those with different tastes must look further and deeper to satisfy their taste. Enter the internet, and everything is turned upside down. The net gives us the chance to buy items that are not the average mass market stuff, which opens profit opportunities for a larger number of creators than the average market.

The way in which this is done is by exploding the Pareto Principle (which roughly states that only 20% entertainment works will be profitable and will fund the 80% that are not). The net has created a space where even the non-hits are profit-making, because there are many more buyers. The article explains that this is now being proven by legal download sites.

What is then the long tail? The fact that creative works may make income from little things accumulating through the mix culture. My hope is that Technollama will someday become a household brand and I will make tons of money from tie-ins and merchandising.

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