Is This the Era of the Short Head ?

Rhino

Rhino, courtesy wildlife-pictures-online.com

Have you noticed how winners seem to win ever bigger these days. That one book/film/app/search engine etc. takes a mega-portion of the market, leaving all the rest fighting over a tiny slice of the cake?

Well, there’s a theory for this: the short head.

In the 10 rules of the short head, Dan Chen provides some persuasive statistics:

  • The top 10% of songs on iTunes get 86% of streams, and account for 90% of the store’s total sales
  • 2.7% of Amazon’s titles produce 75% of its revenues
  • 4.5% of apps generate 86% of the revenues, 0.1% generate more than 50%
  • 14% of movies generate 90% of revenues
  • Even in live performance the top 5% of artists get 84% of concert ticket revenues (56% of revenues going to the top 1%)

In January 2014 Oxfam claimed a similar type of concentration in terms of the world’s wealth – that the 85 richest people are as wealthy as the poorest half of the world.

So what about the long tail ?

All this is in stark contrast to the long tail, the theory developed by Chris Anderson in the early 2000s, that the future lay in selling less of more, that “our culture and economy is increasingly shifting away from a focus on a relatively small number of ‘hits’ (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail.”

The short head is essentially the opposite of the long tail, and appears to be prevailing: the present reality of business is selling more of less. But why?

Ring Tailed Lemur

Ring Tailed Lemur, creative commons

Choice and social media

One of the reasons lies in the sheer quantity of choice available. Who has the time to go through all the options, check out all the new games, listen to all the new bands?

Instead our attention is drawn to the  apps/songs/games etc. that get featured on iTunes, Amazon etc., the ones that are most popular, have sold most, have the best/most reviews.

And this effect is multiplied by social media. Here’s Dan Chen again: ‘New stuff spreads through social interaction and, thanks to social media, we now have hundreds a day, where before we might have had just a few. Thus we adopt much faster.’

It took the telephone about 75 years to reach 50 million users. The app Draw Something achieved the same milestone in something like 35 days.

Instead of broadening our horizons and nurturing our unique, niche interests – it turns out we all want the same stuff.

Is the news all bad ?

I don’t think it’s time to throw in the towel just yet. To some degree at least, there are a huge number of niches in the tail, and the internet has enabled huge numbers of small businesses and solopreneurs to find a market.

We may not be making fortunes but, in many cases, we are making a living.

And there’s always hope: The developers of Angry Birds released 51 apps that failed to make an impact before hitting the jackpot.

Furthermore – though this cuts both ways – there’s no clear map to hitsville for big business or micro business (see this post on Seth’s blog).

Gartner’s January 2014 report says that less than 0.01 Percent of Consumer Mobile Apps Will Be Considered a Financial Success by Their Developers Through 2018.

“The vast number of mobile apps may imply that mobile is a new revenue stream that will bring riches to many,” said Ken Dulaney, VP and analyst at Gartner. “However, our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun. Application designers who do not recognize this may find profits elusive.”

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