Thursday, May 15, 2008

Exciting economics?

At the sound of the word "economics", I used to be immediately bored. Talking about supply, demand, scarcity, margins, value, distribution, goods, services, and management didn't move my excitement meter.

That all changed once I dug into The Long Tail Why the Future of Business is Selling Less of More by Chris Anderson.

This isn't a blook review blog, but more of - if you are into marketing, online marketing, economics, but haven't checked this book out - you should.

This is a book I've heard about for a few years from various people through work. It focuses on the media trends of supply & demand in the digital age and niche marketing.

For example, 25% of iTunes revenue is generated from that one song that is downloaded from that one album once in a month or quarter (I forget). All those one hard to find, rarely bought songs add up to a chunk of revenue.

The Head: Popular music
The Tail: Hard to find downloaded once in a while songs

From the site: The Long Tail, in a nutshell
"The theory of the Long Tail is 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. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare."
What also sparked my attention in this book was how everyday people can publish through blogs and self-publishing and anyone with the talent and a video camera, can put a film on the internet to be viewed. At work, we are trying to figure how to tap the social area that seems to be the trend when it comes to marketing. Word of mouth through online social media sites seems to add credibility. In other words, how electronic media/internet is reshaping supply & demand economics.

LongTail.com

No comments: