By Jim McCarthy Jul 13, 2009 0 comments

“Long Tail” Meet “New Rules”

Kevin Kelly is a super-smart guy who wrote a book in 1998 called “New Rules for the New Economy.”  The basic premise of the book is that the network-effect has become part of the reality of many more businesses because of the Internet.  And the result is some new rules of thumb about how business is.  Or to put it another way, the Internet has altered the laws of physics for business.

He is unequivocally right about that.

So anyway, he’s been re-posting his book in blog form for the last several months, and his recent post was, quite rightly, identified by commenters as a kind of refutation of the “Long Tail” hypothesis we’ve been talking about.

Here’s the post (“It’s a hits game for everyone”) and here’s the key tidbit:

“You try a whole bunch of ideas with no foreknowledge of which ones will work. Your only certainty is that each idea will either soar or flop, with little in between. A few high-scoring hits have to pay for all the many flops. This lotterylike economic model is an anathema to industrialists, but that’s how network economies work.”

The point being that when you win, you win big.  Theoretically, this idea can co-exist with the Long Tail because from the point of view of the aggregator (like iTunes), it doesn’t matter how little volume there is in the long tail.  It’s non-zero, so it all adds up.

But my point is that I suspect the money is still in the ‘head’ of the curve.  The lower 50th percentile is probably a nice little add-on, even for iTunes, but if they had to choose between their top 2 percent of titles and their bottom 50 percent, I’m guessing the numbers say the top 2 percent is the way to go.

That’s what a “hits game” would suggest.

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