June 27, 2008

Selling To The Long Tail Doesn’t Mean You Ignore The Hits

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There's an interesting new article in the Harvard Business Review that looks to challenge Chris Anderson's well-known theory of "the long tail." In it, a Harvard professor, Anita Elberse, talks about how hits still make a lot of money, and the idea that all the money is now over in the long tail doesn't seem supported by reality. Chris himself makes some very good points in response, noting that some of this depends very much on where you "draw the line" between the hits and the tail. Since there's a sort of "fat middle," small changes in where you draw the line of what counts in which category can have a big impact. Chris makes a compelling argument that Elberse chose to draw the line in the wrong spot. He uses the inventory of various brick-and-mortar stores to determine where the line should be drawn, rather than at the somewhat arbitrary 10% and 1% lines that Elberse used.

However, I'd like to argue from a different angle as to why the HBR piece is missing the point. I don't think that anyone ever said that you completely ignore the hits. Perhaps it's a problem of the name "the long tail" but it starts to make people focus all the way at the end of the tail -- the part that is the least profitable. It's the point where only one copy of something is sold every so often. The companies that suddenly announced they were going to focus on the long tail seemed to think that you focus only on that tip at the end. That was not the point at all. You don't ignore the hits -- you just recognize that with infinite shelf space, you can now supply much more beyond the hits -- and that aggregate amount can add up to a substantial sum that no store with limited shelf-space can match. So, Elberse is completely correct in suggesting that companies don't just focus on the tail end of the tail -- but anyone who did so in the first place was misinterpreting the point of the long tail concept.

Even more to the point is that the concept of the long tail changes the shape of the market. When shelf space was limited, it made it that much more difficult to even get a creative work produced at all. You had to be able to convince someone that your work would make it into the "hits" category, and then get them to finance the creation of the work. And, anything that didn't actually become a hit fell off the chart completely. You basically had a bimodal distribution of content: the hits that sold, and the crap that didn't and was no longer available. But there was a hidden third category that most people didn't think of: the stuff that didn't get created at all because it wouldn't sell enough alone to justify it.

Yet, with the combination of cheaper tools for content creation, combined with cheaper distribution tools and infinite shelf space, that third "hidden" category started to exist in the open, where it was invisible before. And, on top of that, many of the works that fell into the "crap" end of the old model, could migrate into the long tail and make enough sales to be decent. But the point remains that it spread out the distribution, made it possible for much more content to both be created and sold -- and there are plenty of companies capitalizing on that. That doesn't mean that the hits go away or that the long tail concept doesn't make sense. It just means that you don't focus on the long tail by only focusing on the crap end of the long tail -- but on the entire distribution.

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Sponsor’s Content: Virtual Teams Get Closer

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Virtual teams are having cultural issues. But new team-building methods can help.
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ScreenSteps: A Beautiful Way to Share Information Online

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screenstepslogo.jpgTutorial creation tool ScreenSteps released a new version today and we're excited to discover this very useful looking tool. This desktop app for Windows and Mac lets users create attractive screenshot-based support documents in minutes. You can capture full or partial screenshots, add relatively sophisticated annotation and then publish to the web or export in HTML or PDF formats.

The 30 day trial of ScreenSteps Pro took us just a few minutes to learn how to use and we're already excited to use this service for product reviews and tutorials.

We'll let the company's demonstration video speak for itself but we can confirm that it's very easy to use. The one thing so far that we wish ScreenSteps allowed was publishing to Google Docs as a PPT. We like embedding click-through tutorials from Google Presentation. We would guess that many people have different export preferences, so it would be nice to see those options expanded even further. See below for some other examples of presentation type services you might also find useful.

Other Services to Check Out

Last weekend Corvida wrote here about a number of online presentation tools, and readers offered even more suggestions in comments.

A few services that could be of interest that weren't mentioned include:

  • Screenflow is the hottest new screencast video capturing tool on the market. It's Mac (Leopard) only but tough luck Windows users, you've had all the good screencasting software for years.

  • JingProject is a free, quick and dirty screencasting service from the makers of Camtasia. It's Mac and Windows friendly. We've had it crash a lot and direct access to the files is not as simple as it should be, but when it works it's really easy to use.

  • There are probably hundreds of other services that combine powerpoint, video, audio and other media types to let you create presentations. What are your favorites?

The two mentioned above capture moving images, which can sometimes take way too long to get right. We think that ScreenSteps looks like a very intelligent entry into this field as it only captures screenshots and is really easy to use. If you'd like to learn more about the application, check out the interview with its developers posted today at The Unofficial Apple Weblog. Thanks to Jason Glaspey for bringing ScreenSteps to our attention.


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DOJ sinks another EliteTorrent admin

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World safe again

Another ex-administrator of former BitTorrent tracker Elitetorrents is facing prison time for his part in the site's peer-to-peer sharing of copyright material.…

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AT&T Moves to Dallas, But Is That an Improvement?

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AT&T is moving its headquarters from San Antonio to Dallas. Remember the Alamo!
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Solar power to set sail in space

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NASA will launch its first solar sail as early as July 29, potentially changing the way space is explored.
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Google data-sharing gets authentication option

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Programmers now can use the OAuth standard to tap into information through Google's data-sharing interface. Also, Google Data comes to Google Finance.
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Google data-sharing gets authentication option

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Google now supports the open OAuth standard for sharing data through its Google Data interface, a move that could make it easier to tap into information stored at Google property.

Google headquarters in Mountain View, Calif.

Google headquarters in Mountain View, Calif.

(Credit: Stephen Shankland/CNET News.com)

The Google Data API (application programming interface)--GData for short--provides a conduit whereby other Web sites can slurp out data stored at Google. For personal information, such as photos at Picasa or contacts at Gmail, access to that information requires authentication. OAuth provides a standard way to perform that authentication, which means programmers at least theoretically should have an easier time writing code.

Google announced the OAuth support Thursday on its Data API blog.

Also Thursday, Google announced that Google Finance is now supported in the Google Data API. That means data could be retrieved to build, for example, a gadget with a live chart showing changing portfolio value.

And since the API permits two-way communications, it also means an outside service could update a user's information at Google Finance, for example with recent stock trades.

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Patent Battles Make It That Much More Difficult To Keep People Healthy

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The problem with the view that patents should be given out for every little improvement (most of which would have come about naturally thanks to market demand) is that you end up with "patent thickets" where a ton of different companies all claim patents on some small part of a larger offering. This isn't just an argument about "ownership" or "rights" in some cases. It can also have direct impact on keeping people alive.

For example, just witness the patent battle going on in the medical device market concerning Boston Scientific, Johnson & Johnson, Medtronic and... famed patent hoarder Acacia. Boston Scientific, Johnson & Johnson and Medtronic have all been suing each other concerning various patents used in stent and catheter technology. Acacia has now jumped into the fray by acquiring patents from Datascope and setting up yet another shell company called Cardio Access.

In all of these cases, everyone is claiming ownership over some piece of the technology used in stents and catheters, basically suggesting that others can't use that part of the technology without paying them. The end result is that we're all put at greater risk. Either stents and catheters won't be able to be as useful as they should be because they can't use the best possible technology -- or if they do use that technology, they get priced much higher to pay for all of these licenses from everyone else. And, of course, with all of these patent lawsuits (and rewards -- since Boston Scientific has already had to pay out the two largest patent fines this year, totaling $750 million), money that could have been spent on making a better product is instead going into lawsuits.

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Google plugs YouTube into Playstation 3

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Go go Gadget video

To the surprise of no one, Google is now offering software that streams video, photos, and music from your PC to your television.…

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