Once Again, the Long Tail Refuses to Be Buried

200px-long_tailsvg Wired editor Chris Anderson’s theories about the Long Tail have been the source of considerable controversy almost since the day his first Wired magazine piece on the topic was published in 2004. The initial criticisms of his thesis centered on whether there was such a thing as a “long tail” at all — in other words, whether digital distribution of music and other forms of content have allowed little-known songs, movies, and so on to prosper where they might otherwise have been ignored. Later attacks, however, have focused on how the Long Tail theory functions in certain markets, and whether or not the existence of such an effect actually helps anyone in those markets create a workable business model.
The most recent criticisms came a few days ago, at a mobile telecom conference in London, where an economist named Will Page — who works for the MCPS-PRS Alliance, a British copyright licensing-fee collection agency — spoke about research he conducted into music-buying behavior. The results of this research, Page said, didn’t conform to the “power law” distribution described by Anderson’s theory, but instead followed a more common “log normal” distribution (if you really need to find out more about a topic only a statistician could love, you can check here and here).
The bottom line is that Page reportedly argued the data didn’t support the existence of a Long Tail for music buying (a claim that The Register pumped up into a post about how the entire concept is flawed, and how this is “bad news for Californian technology utopians”). Anderson, for his part, says the data appears to have come from research into mobile music-buying patterns — since mobile music provider Mblox was a partner in the study — and that he has already admitted mobile behavior is subject to different effects (music-industry theorist Gerd Leonhard makes some excellent points about other reasons why we shouldn’t necessarily believe the numbers, as does Yankee Group analyst Benoit Felten).
Why does this debate matter? Because Anderson’s theory suggests that content providers should expand their catalogs of music and movies to include more obscure titles, as a way of appealing to consumers with broader, Long-Tail type interests. By extension, the theory also suggests that musicians, writers and directors who are outside the mainstream might be able to pursue their creative dreams and still make a living. If there’s no Long Tail, then all bets could be off, and the Top 40 mentality could once again rule over content-related industries.
There have been previous attempts to bury the Long Tail, including one launched by a former research partner of Anderson’s, Anita Elberse, who wrote a piece for the Harvard Business Review about flaws in the theory based on data she collected. In that case, the former Wired editor made a fairly convincing argument that, far from torpedoing his conclusions, much of the data actually helped enhance the theory. Page’s study may not do that, but it is a long way from a smoking gun.
Contrary to what some might think, Chris Anderson didn’t invent the idea of the “long tail” — similar theories about the effect of diminishing production and distribution costs on digital media were
being discussed at least a decade before he wrote his Wired article, and many of the central concepts have been around since the mid-1940s. Whatever its flaws, it is still a powerful way of expressing the
changes the web has wrought in content-related markets of all kinds. Whether content producers, distributors and creators want to adapt or not is a different question.

Question of the Day: Is ‘Free’ Killing You, Too?

‘Long Tail-Schmong Tail, Chris Anderson’s-free-will-be-the-death-of-me.’ Or some such, griped founder Hank Williams over at Silicon Alley Insider yesterday in “Free” is Killing Us–Blame The VCs”:

Venture capital has totally distorted the market. VCs are investing billions of dollars in companies with instructions to get big fast and to worry about advertising revenue later. As a result the competition is for users and not for paying customers. Unfortunately, to fix this, many more companies need to die.

Put Hank’s way, I wanna party like it’s 1999 all over again. So this prompts our

Question(s) of the Day:

* Is it good or bad that the bucks are going right out of Busine$$?

* Is it the VCs fault?

* Should ‘free’ be the future?

* Or, is Hank’s scenario better?: “With less “free” floating around, a more regular supply and demand dynamic can take hold, [and] customers will have to pay for the things that are important to them and non-quantized growth dynamics can return.”

AND * Did you get into this startup business to make money selling your product/service, or would you be content to merely make it by selling your (VC-funded, eyeball-oriented free-product hawking) company?

Tell us what you think.

Free as in beer? More ways to offer somethin’ for nothin’

10041free-beer-here-posters.jpgThe latest cover story in WIRED, called Free! Why $0.00 Is the Future of Business (authored by Editor Chris Anderson of The Long Tail fame) has sparked a long list of blog posts on every aspect of ‘free’. I’d like to list some of my favorite ways of offering something to the market for free. Of course, lots of start-ups are focused on selling advertising directly or through Adsense, but there are other options to consider. The list isn’t complete of course, so please feel free to comment with other ideas!

Offer products for free and extract data from its use to sell

The best example I think is Newsgator. Newsgator offers several RSS readers and services (Newsgator, NetNewsWire, FeedDemon) and used to charge for them – they had actual revenue by charging for their products! Recently however, Newsgator decided to offer all readers for free. That way they gather a lot more data, which they will aggregate and offer as ‘attiontion data’ to publishers, journalists and other people interested in buzz. A risky way of transforming a business, but also one that could inspire a lot of other start-ups to rethink their sources of income.

If you want to learn more about this concept you should head over to the podcast section of Educators Corner by the Stanford Technology Ventures Program, where Mitch Kapor talks about his new start-up Foxmarks. Read More about Free as in beer? More ways to offer somethin’ for nothin’

Blurb Wags the Long Tail

In a few weeks, online bookmaking site Blurb will launch a new community called BlurbNation, a section of the Blurb site where people can connect with a professional designer that will take their photos, stories, recipes or any other images and pull them together into a book. Such a move is aimed at expanding Blurb’s business beyond the 90,000 books it printed in 2007 — and to take it out of the red.

Blurb, which was founded in 2004, launched its site in April of 2006 and is on track to turn in breakeven results this year, is both a digital bookmaker and an example of yesteryear’s big Internet trend: The Long Tail (It seems so long ago, but it was only three-and-half years ago that Anderson wrote about the idea in Wired). Since we move at digital speed, we’ve already discarded that trend (and possibly refuted it) for social everything. But true business growth doesn’t take place at that harried clip, it typically requires the five to seven years allotted by VCs for their investment time frames.

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How to Turn Your Revenues Up As Economy Goes Down

recession.jpeg Recession-mongering got you down? Regardless of what the pundits and macro-metrics say, 80% of your time still should be focused on bringing money in the door. The “R” word might be hovering, but here are 7 ways to power through the economy’s speed bumps and grow your business anyway.

1) Leverage the power of free.
Free stuff drives behavior but be to sure to use a second stage premium. For example, the first premium you can use to drive registration. The second stage premium (SSP) would be a reward for bumping incremental revenue. See also, Chris Anderson’s latest opus in WIRED magazine: Free! Why $0.00 Is the Future of Business.
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The Power of ‘Free’ and the Virtual Toaster

gimg6.gifWe linked earlier this week to a dialogue — or blogalogue — between VC Fred Wilson and WIRED Editor Chris Anderson about so-called Long Tail b-models and the many creative ways in which you can leverage them to generate revenue for your startup.
We highlighted a few of the more creative monetization models called-out by Anderson and Wilson. One that we liked was “alternate output”, a.k.a, print-on-demand ebooks and pdfs.
Well, today we read a post by that spins the Long Tail “free”- or “nearly free”- ball forward yet again. In How I Increased My RSS Subscribers to Nearly 900 in Less than 2 Weeks, Michael Martine of Remarkablogger boasts:

” In less than 2 weeks, I’ve managed to increase my blog’s subscriber count by nearly 200% to about 900 subscribers… Many of you already know how, but I’ll say it anyway. Two words: Free Ebook.

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A list of Long Tail b-models

WIRED Editor Chris Anderson, who is also author of the best-selling book, The Long Tail,
recently published a blog post listing various new media b-models, a.k.a, “long tail” b-models where, generally, the content you’re “selling” is free or almost free — and you make money off something else, such as banner ads.
Chris’s point, this time, is that there are now many revenue models for you to consider besides old-school banner ads.

“Think of all the various ways that an audience that is paying attention to your service can be paid for by companies and people who want some of that attention,” he writes, quoting the prolific VC-blogger, Fred Wilson.

Then Anderson lists several of these monetization alternatives. We encourage you to review them — there are lots of opportunities here for enhancing your “operational flexibility” as you prepare your startup for the economy’s downturn. Read More about A list of Long Tail b-models