Harvard and the long tail
In Will the ‘Long Tail’ Work for Hollywood? Harvard Business School discusses some strategies retailers can use to adjust to the changing long tail entertainment economy. Admirably, they are trying to find recommendations for big business.
Unfortunately these recommendations aren’t very good. One recommendation was to look at sales of items in the long tail and adjust shelved stock accordingly. That’s a hit-driven strategy. If that is your strategy, it is a better idea to just stock the hits. They, by definition, sell the best. As a retailer you’re simply not a long tail aggregator. The only way to capitalize on the long tail would be to directly compete, or acquire, such companies. If you had a retail video outlet, and you offered shoppers the ability to search from the catalog of the NetFlix-style wing business you would be profiting off the long-tail.
Also, another thing that didn’t ring true was the comments on the book Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us. “Why would you watch some average-quality film, these authors asked, if your favorite titles are always available, for instance via video-on-demand?” Here we assume that the hits are of better quality than the niche titles. It is so hard to find a copy of Baraka in a regular video rental place, but there are plenty of copies of the new Dukes of Hazard flick. Baraka is a far superior film - most easily found online.
Film and music executives, currently challenged with the question “How can I prevent loss of market share?” are no different than Ford Motor Company execs asking themselves “In a global market how can I make more money than my Korean counterparts while paying my workers 5 times as much?” You can’t. Large entertainment monopolies are naturally going to lose market share when consumers are exposed to 100 times more selection. The only solution is to decrease your operating costs - downsize - do the Gen X thing. Or acquire Amazon.
