Another example of the long tail in action

When looking at the DVD rental industry, a company such as blockbuster usually holds around 3000 titles whereas a company such as netflix, which does not has bricks and morter limitations has around 40,000.

Refering back to blockbuster the top 600 titles make up 80% of the sales with the tale making up the other 20% due to each title only selling either once or twice a month, but if the tail is extended to say 40,000 like Netflix, then the really sales figure generated by the long tail is around 50%.

 Therefore for a company such as Netflix, which doesnt have the limitations that Blockbuster do, there is a great amount of revenue to be made out of the long tail.

Video formats

In todays ession we talked about the rise in use of videos on the internet and the differant formats which they come in as well as the differant ways in which we view them.

 In 1999 before the dot com crash, there was a huge interest in the use of videos on the internet, in 1999 in Los Angeles, there was an online film festivial which involves a number of new online movie/video sites, either seeking investment or that had recently aquired investment to push their new site. However only a handful of these sites survive to this day.

 We were asked to think about the sites in which we use and the way in which we view videos over the net, the first website which popped into my head was ‘youtube’, and the technology used on this site is the flash technology which is new to web2.0, before this shockwave was used which i also remember utilising to play online games in boring IT lessons during my younger years in school.

 There are two differant types of ways which we download content, these being either progressive download or true streaming, so what is the differance between the two?

 Well true streaming is what is utilised by ‘youtube’ its when a small buffer of the video is sent to the user to view while the rest of the file is streaming into place, a downside to this is that the user will not recieve the file and have to connect again in order to view again, also the download and connection speed can have an effect on the quality of the video.

 Progressive download is when the user actually downloads the file and it is stored on their hardrive, this format also gives a buffer of the file to watch while the rest is downloading, but the major advantage to this is that the user can set the video downloading, go away and come back and watch the file whenever suits them.

 A main reason that the use of online video has become wide spread is due to the fact that the content is searchable, the provides use META data, much the same as i-tunes do, in order to make their archieves searchable and more accessible to the consumer.

Web 2.0 and the music industry

I have decided to write my second piece about the music industry and the developments and enhancements of technology within it. I will talk about the way in which this has affected the industry and the ways in which the record labels are trying to retain control o the market.

 The digital enhancements within the industry have affected the way in which music is recorded, whith the majority of it being done through the use of digital media applications such as Protools and CakeWalk. But the real problem for the industry have been through the digialization of the distribution and reproduction of music via file shareing networks such as Kazza and Napster. According to sources withn the industry, this has obviuosly greatly decreased the revenue made from Album and single sales. Although people expect a further decline of power by record labels due to the ease of recording and distribution, but record labels will always have the power when it come to A&R (artists and repertorie) and marketing, the job of the A&R department is to find new talent, and this is an aspect that the file sharing networks fall short of, although they did used to claim that they did offer this which was clearly a smoke screen as a user would have to know the artists name of song title in order to search for the product.

The digitalization has not completely destroyed the model of the industry, but the recored labels have had to addapt there strategy, for example the company Zavvi.co.uk, which recently took over from Vigin records, now has plans to install stations within its outlets which allow consumers to come into store and download music straight to there I-pods or music player. For example it cant just be ingorned that digtial delivery of music is far more conveniant and cheaper for the consumer, and the implication of i-tunes, which currently has a t least a 70% share of the PC-based download market according to www.news.com, has proved that the consumer is increasing interested in cheaper ways of aquiring music.

 a news article of the BBC’s website clearly shows that the music industry is worried about the implication of new techonlogy, to begin with they tried to close down the file sharing networks but as fast as they closed one, two new ones opened, now they have shifted their focus towards consumers themselves, with one consumer being ordered to pay in excess of $100,000 recently. But according to some people this is down to the music industries slow reaction to new technology and not being able to meet the needs of consumers, but according to one news article, this is because the business doesnt want to abandon its business practices which have brought it such good success in the past.

 According to Gerd Leonhard, founder and former chief executive officer of licensemusic.com and founder of digmarketing.com, the music industry is clinging onto the past and a strategy that has worked for the past 50 years, but music sales are drtically dropping year on year, this year alown has seen a 6% drop in album sales.

 An interesting statemnet made by Leonhard was that the music industry is not makeing the most of its back catalogue and appealing to the over 35 year olds, this can be related back to the long tail theroy. He states that only 10% of over 35′s still buy music.

To be continued .  .  .  .  .  .  .

The long tail in action

A story which i read on the web, illustrated the use of the long tail theory.

 Universal, one of the worlds leading music companies in the world decided to contuct an experiment into the idea, what it did was to put 3000 of its out-of-date music tracks back into circulation on download sites across europe. the result of the experiment saw over 250000 downloads of these tracks.

Not only is this a major advantge for universal, but also for the artists which helps them stay in the public eye and also for consumer choice, if the long tail theory is gettingg utillised alot more then it means consumers will have a hell of a lot more choice of products when it comes to purchasing ovr the web.

 What this proves is that money can be made from obscure and un-mainstream items provideing the storage costs are low enough, and in the music industry the cost of storing a music track on a server is virtually nothing.  some people expect the sales from the long tail repertoire can, in time, outweight the sales of hits.

Beacon and social advertising!

Beacon is the new project which is proposed by facebook which is proposed to work with third parties and allow access to very specific user data. The proposal will enable users to apposiate themselves with a brand or a company and for their social newtork to be notified of everytime they purchase something from this brand or partner company.

Some people could think this as being a possible further invassion of privacy, due to the nature of the information included. The feed will display what this person did (bought something), what it was they bought, when and where the purchase was made. To me this has a very big bother feel to it. But obviuosly this is very appealing to advertisiers.

 The aspect of tapping into social networks by advertisers can have huge advantages to a business , this is a mass market medium, and if a suitable advertising model can be designed then it can be utilized with devasting affect.

 Some experts predict a massive backlash for facebook and also for any partner company that will affilate itself with facebook under the new scheme, this is due to people thinking that facebook will know too much about its users. My personel feelings on the matter is that however much people will critise the plans, it will go ahead although it is pushing the boundaries of privacy a little to much for my liking, whether are not people will use it is another matter. What is a fact is that these plans are essentially doing is turning facebook into a mass marketing tool for brands and businesses, which i think is very good business sense, the future is in advertising!!!!

The long tail and blogging

Through more research, i have discovered that we can relate the long tail theory to the world of blogging itself. The is a good diagram on the website listed which illustrates what i am going to talk about. http://nymag.com/news/media/15970/.

 Many people have the conception that only a small amount of the blogs which are present on the web have an audience, these being the A-list bloggers which have the majority of the audience. But according to the long tail theory, this is not the case.

 Due to the ‘tail’ of B and C list bloggers is infinite, on average then the amount of people reading these blogs, although the numbers being smaller for each blog, usually outweighs the amount which are viewing the small line of the A-list bloggers. Here we already have a vast amount of niche markets already divided up which can be taregted by advertisers and marketing strategies of businesses.

The long tail

After reading an article about the long tail theory written by Chris Anderson my perception of who its possible to make money on the internet somewhat changed. My belief was that business would be successful if they were offering products or services that were the most popular, i.e. the mainstream, but this seems not to be the case.

So What is the Long Tail Theory??

Well basically the theory is about how our economy and culture is shifting for mass markets to millions of niches, which the satisfaction of such new markets has been helped by the development of new technologies and concepts such as the ‘infinite shelf space effect’.

Statistics in an article from Tom Storey clearly shows that we are turning into a more digital and technology based age, with more and more products and services looking to the internet for wider distribution and target audience. An example of one industry that is has been changed greatly by the utilisation of the internet is the music industry.

An example of this in action is in the music industry, where online download companies have started to expand there product databases because they have realised that theses can also make a steady profit because no matter how obscure the material is, this is a market for it somewhere, as started in Armstrongs article one download company has seen that not only his op 50000 tracks are getting hits but the top 100,000, top 200,000 and the top 300,000 are all still generating steady income. The companies can do this because of the concept of unlimited shelf space, these obscure tracks can just sit on some server somewhere waiting to be downloaded and it doesn’t really matter if they are hit once a day or just once a month.

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