Wednesday, September 23, 2009

Dead Harvey Settles an Argument About The Long Tail

It's been a while since I wrote an opinion piece, so it felt good to get this one out. I hope you take the time to read it, too.

So, really regular readers of the site will know that I'm a fan of Chris Anderson's Long Tail theory and what it means to the world of indie horror. If you're interested, Anderson is editor-in-chief over at Wired magazine and his book, "The Long Tail: Why the Future of Business Is Selling Less of More", suggests that an entertainment market, with a high freedom of choice, will create an inequality in how films are distributed by favoring the upper 20% of the items against the other 80% of the films. Some call it the 80/20 rule. 80% of the audience concentrates on 20% of the market.

So, in graph form, it looks like this. The head is on the left there, that's the blockbuster films and the studio films. The vertical axis (for those far removed from high school math, that's up & down) represents the audience and the horizontal axis (left & right) represents the amount of films. So, you've got the "head" on the left and, then, stretching away from it, is "the tail".

With online access, a reduction in search costs and new distribution formats like Amazon and Netflix, that tail would, in effect, get longer and longer and longer. So, one of theories in The Long Tail is to consider this - Instead of selling 10,000 copies of one movie, you could sell 100 copies of 100 movies... or 10 copies of 1,000 movies and your profit would be the same. The longer the tail gets, the more choice. The more choice, the more you cater to those niches and sub-genres and Anderson believes that the future will be in those choices and sub-genres. Conclusion: for years, business has always concentrated on just that top 20%. Now, however, we should be concentrating on the tail, as the future will be in selling less of more. Get it?

Obviously, this theory works well for indie horror. First off, and most importantly, it means there's a market for it. Let's face facts, indie horror is planted firmly in the long tail. You're not sitting side-by-side with "Iron Man". Secondly, it means that it can sell. The idea that Amazon and Netflix has search capabilities that not only allows people to find niche, obscure horror, but can highlight it, means that you can actually make money selling this stuff...

Now, any time that someone comes up with a radical idea like this, someone else is going to try to shoot it down. I just read an article called "Research conflicts with 'Long Tail'" on and a couple of nerds from Wharton analyzed data from Netflix and are trying to debunk Anderson's theory. Sergui Netessine, associate professor of operations and information management, and Tom F. Tan wrote the 36 page paper called "Is Tom Cruise Threatened: Using Netflix Prize Data to Examine the Long Tail of Electronic Commerce". You can actually download a copy of it here. They say that the data shows that even though people have more choice than before, they're actually concentrating on the top 1% of films more than ever. Long and short, they're saying that the blockbuster is more prevalent than in the past. Anderson, of course, retorted and things started getting real nerdy and I don't want to get into it, but there's lots of data supporting both sides...

A couple things before I say MY theories on the subject and settle the whole matter from our perspective... One, get the book "The Long Tail" or, at least, read the manifesto, which can be found here. Next, read that article on, I linked to it up there. Also, read the article from the Wharton guys, which I also linked to up there. You have to know the business you're in and indie horror IS The Long Tail and this is some great, great reading.

So, what do I think? I do think the Wharton nerds have a point and I would venture to believe that people do concentrate on the blockbusters and big studio flicks. We are all sheep, after all. That goes for me, too. I watch a lot of indie horror, but I also watch whatever big movie comes out. I won't argue their data, even though it is subjective and relative. What they're ALL forgetting, both Anderson and the nerds, is that they're comparing apples to toaster ovens. They're considering that all films are created equal and that the definition of success is relative across the board. That's just not true. If your indie film sold 1,000 copies on Amazon, you might be excited about it. If even the lowest budgeted studio film sold 1,000 copies on Amazon, it would be an unmitigated disaster. What I love about The Long Tail and what YOU should love about The Long Tail is that it EXISTS. The low cost of search, the lack of shelf space required and the ease of distribution has stretched the tail out and made a market for indie film where there wasn't a market before. Almost all of the indie films that I watch wouldn't have seen the light of day 20 years ago. The other factor that they're NOT putting in their data is profitability. If a film costs $10,000 to make and it makes $20,000 - it's 100% profitable. A $100Million film needs to make ten THOUSAND times that to be considered equally profitable. So, if only 20% of the people are checking out The Long Tail, that's all you need. Hell, you don't even need 1%. The fact is, as long as The Long Tail EXISTS and creates a market for your film, you should be happy.

Those conditions that stretch The Long Tail, such as the low cost of search, lack of required shelf space at retailers and the relative low barriers of getting distributed are getting better and better every day. So, who cares that audiences still concentrate the bulk of their time on the head of the tail? Just be happy that the tail is there... and that it is long... and getting longer.

1 comment:

Jason Heath said...

I think this is a critical concept that just doesn't get enough mention in the indie movie scene.

Posts like this make my daily blog stops include Dead Harvey!