Swinging for a miss; catching some tail

Via Tim Oren, a great un-freakin-believable?Wired article illustrates how the types of? technologies/processes we plan to employ at Pegasus News open up lots of microniches, enriching smaller players, and ultimately, people's lives:

This is not just a virtue of online booksellers; it is an example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power. Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! Launch to songs in the iTunes Music Store and Rhapsody. People are going deep into the catalog, down the long, long list of available titles, far past what's available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).

There are restaurants in my neighborhood that I've never tried. That's partially because I live on the edge of a sketchy neighborhood. Within a mile of my house there are four chinese restaurants. If I had access to, or?better yet was pushed information on them, I might find an undiscovered gem. I'm happier, and a local merchant's economic prospects improve.

More importantly, there's an innovative economic development organization focused on my neighborhood. We bought our house a year and a half ago. I just found out about this well-established group last week. If I was pushed content on it, I would have gotten involved a long time ago, theoretically improving my neighborhood and my property values.

To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service (owned by RealNetworks) that currently offers more than 735,000 tracks.

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.

When you read the author's take on how "misses" can make money in the digital age, think of "misses" in the context of news that is too local to be of interest to the broad audience of a daily local newspaper.

There are three rules listed for this "Long Tail Economy." God bless it, we adhere to every one and the legacy media breaks every one.

Rule 1: Make everything available

Rule 2: Cut the price in half. Now lower it.

Rule 3: Help me find it

This is huge. This is the best?articulation I've seen of why the marketplace needs us.

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Mrs. Pegasus ups the ante with an addendum point:

What we're providing (news and information) on the hyperlocal level not only fits this model, but it's also something that people know and miss. In small towns, word about what's happened in a neighborhood gets around quickly, but in our impersonal big city lives, we're lucky if we know the names of the folks two doors down.?It's not just that?the burglary two blocks over mirrors the "deep cuts" song that is now economically sound in a retail model-- Everybody already knows the song; it's just been too hard to find. Again, it's easier to create Wal-Mart than to fix Sears.

The advantages are spread widely. For the entertainment industry itself, recommendations are a remarkably efficient form of marketing, allowing smaller films and less-mainstream music to find an audience. For consumers, the improved signal-to-noise ratio that comes from following a good recommendation encourages exploration and can reawaken a passion for music and film, potentially creating a far larger entertainment market overall. (The average Netflix customer rents seven DVDs a month, three times the rate at brick-and-mortar stores.) And the cultural benefit of all of this is much more diversity, reversing the blanding effects of a century of distribution scarcity and ending the tyranny of the hit.

Just for grins, here's our rewrite of the same graf:

The advantages are spread widely. For local enterprises, recommendations are a remarkably efficient form of marketing, allowing smaller and more obscure businesses and causes to find an audience. For citizens, the improved signal-to-noise ratio that comes from following a good recommendation encourages exploration of the community and can reawaken a passion for anything from Szechuan cooking; to youth sports; to home decoration; to local music; to community activism, potentially creating a far larger engagement market overall. And the cultural benefit of this is much more diversity, reversing the blanding effects of a century of distribution scarcity and ending the tyranny of the generic lifestyle.

Eureka. Great googly-boogly. This ain't a business; it's a crusade. We're going to bring a sense of community back to big-city America. We're going to get people re-engaged in their communities. More people will vote. People will have a common experience that fuels conversations with their neighbors. They'll go outside more. And the world will be a better place.

Comments

[Evelyn Rodriguez]

The Long Tail is a very very important article for anyone involved in networked media or the networked economy.

Mrs. Pegasus is right on the money. I went back to my old stomping grounds in Salt Lake City and went back to ALL my favorite haunts: my favorite coffee shop, fav bookstore/cafe combo, fav Mediterranean restaurant, etc. It's a smaller city - kind of what I call human scale. When I lived there I was always "in the know" about who was coming to town and when and what was happening in arts, culture etc.

As much as I rave about Bay Area - I love the vibrancy of the people and their open-ended forward-thinking minds. I have no favorites and I am NEVER in the know about arts, culture, etc. There is a way to stay in touch with entrepreneurial/technology events, but in general, it's just too overwhelming, it's beyond the 'human scale', I don't have that neighborhood feel, and I don't have an answer.

[uhhh]

uhhh

[curt]

“In small towns, word about what's happened in a neighborhood gets around quickly, but in our impersonal big city lives, we're lucky if we know the names of the folks two doors down.” It would be marvelous if this hyperlocal/longtail thing results in the breaking down of some of those walls the depersonalize our lives, along the lines of 'meet-ups.'