The Long Tail and the Economics of Abundance

Chris Anderson’s best-selling book, The Long Tail, is predicated in large part on the assumption that as inventory and delivery costs approach zero, and with highly sophisticated search able to help people find what people want, choice becomes practically unlimited and niche content becomes economically viable.

He goes into this concept in more depth in a new post on his blog entitled “The Economics of Abundance,” in which he reviews (and links to reviews of) a presentation he made on the topic. The review by David Hornik has a particularly appropriate paragraph:

The same businesses that are the poster children for the Long Tail, are the poster children for the Economy of Abundance. And the same businesses that are the victims of the Long Tail are the poster children for the Economy of Scarcity. With bandwidth and storage approaching free, iTunes can offer three million songs (P2P offers nine million). In contrast, with limited shelf space, Tower Records can only offer fifty- or sixty-thousand tracks. The end result, consumer choose abundance over scarcity (something for everyone) — Tower Records gets liquidated while iTunes grows dramatically. Television is undergoing a similar transformation, from scarcity to abundance. TV initially consisted of only the major networks. Consumers were limited to 3 choices in any given time slot. With cable the number of channels was dramatically increased and a broader range of content became available (Food Channel, Discovery Channel, ESPN, CNN, etc.). To many, 250 channels may constitute sufficient abundance as to approach infinite choice in their minds. But the true television of abundance is YouTube. With unlimited bandwidth and unlimited storage, television is subject to microprogramming — millions of shows, viewable on demand at any time. Now not only should NBC be worried, so too should be Comcast.

I highly recommend both the post by Chris and those to which he links. I also would add that there is a point at which content creation costs (not just storage and distribution) approach zero. When content is being created for TV, for instance, putting it on YouTube, or creating a video Podcast, is almost free. And instead of being time-bound and limited to scarce airwaves and cable channels, it can be available as long as you want it to be…and as long as potential viewers want to see it.

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My Ragan Conference Presentation

Jeremiah Owyang, a social media/web strategist from the Bay Area, attended the Ragan Strategic PR conference in Chicago where I presented in September, and blogged about the conference here. His site looks to be a good resource for learning about social media, and his is one of the feeds I’ll be reading.

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Non-Annoying Web Video Ad

An oxymoron like congressional ethics, pretty ugly, criminal justice, only choice, original copy or jumbo shrimp?

No, I discovered it when I was reading Janet Johnson’s article on “type-ins.” I clicked through to the CNNMoney article she referenced, and up came the story, complete with one of the Apple computer personification ads with the sound turned off. It gives the opportunity to click to hear the sound, but otherwise it’s just another graphic on the page.

I’ve seen reports that video advertising is going to be big, but I didn’t know how it could work and not do more damage than good. Rule #1 is not to annoy your potential customers. I’ve seen some sites where the video launches automatically, and it can be jarring and annoying when the car dealer’s commercial comes blaring through.

If the ads are visually distinctive as this one is, I can see this might be a way to have a successful and non-annoying web video advertising campaign that isn’t purely viral.

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‘Type-Ins’ Tipping Point?

Janet Johnson, formerly of Marqui, is back in the blogosphere with a newly designed site and an interesting post on the phenomenon of direct navigation, in which users guess at a URL instead of using Google, Yahoo, Ask or another search engine.

Her advice is that if you are using Google’s AdWords service to buy pay-per-click ads on a term like, for example, Rochester MN jeweler, you should consider buying the domain name rochestermnjeweler.com. That is, if the search term you are buying in AdWords isn’t too obscure.

You can read Janet’s thoughtful analysis here.

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T-Mobile Wi-Fi/Cell Phones: A “Threat” to Telcos, VoIP

The New York Times reports this morning that wireless carrier T-Mobile has launched a trial in Seattle of phones that use both cellular and wireless internet connections, which could improve reception in areas of weak cellular signals while enabling users to stretch their cellular minutes.

The first phones, which are available to consumers in Seattle on a trial basis, link to T-Mobile’s cellular network outdoors and to Wi-Fi routers at homes, in offices and in other locations like airports and hotels. This lets customers avoid using some of their cellular minutes and increases coverage in places where signals are typically weak, like basements and rooms without windows.

To gain access to the service, called T-Mobile HotSpot @Home, customers must buy a phone that works on both networks. T-Mobile is selling a choice of two handsets that cost $49.99 for customers who sign up for a two-year rate plan for at least $39.99 a month. Subscribers are charged $19.99 a month in addition to their regular cellular plan fees.

The dual-use phone service may appeal most to younger consumers who do not have a traditional phone line and rely solely on cellular phones and broadband lines.

“For the below-30 age segment, it’s a no-brainer,” said Roger Entner, a wireless industry analyst at Ovum, a consulting firm. “This is also a threat for other wireless carriers because it fixes the problem of poor coverage inside homes.”

When my two oldest children went away to college last year, cell phone reception in their dorm rooms was spotty, to put it charitably. Even though we had free in-network mobile-to-mobile minutes, we found ourselves needing to call their land line to get a clear connection.

Vonage’s advertising has been creative and memorable, particularly spot in which the circling dorsal fins near the beach lead the young lady to exclaim: “The dolphins! Let’s go play with the dolphins!” It’s also led to some creative spoofs:

[youtube=http://www.youtube.com/watch?v=t2B4jjt6Tvk]

A phone that uses wi-fi wherever you find it (not just at home) and can use cellular signals when necessary looks even more like “a smart decision in a sea of stupid ones.” I can’t imagine how this trial won’t be popular and successful, particularly since it may reduce T-Mobile’s need to invest in more cellular towers.

Mobile VoIP is one more reason to get rid of the land line, as our family did last year. Some people will opt for DSL, while others will use cable. In the not-too-distant future, there will be no need for anyone to have both.

And with some communities going to city-wide Wi-Fi, it all comes down to lots more competition for the telcos. The Times says Sprint is working to develop a similar service. If this experiment works in Seattle, imagine how well it will go over in a Wi-Fi city like Philly.

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