Micro-Targeting & The hit book, the buzz, ‘The Long Tail ... · ‘The Long Tail’ principle 2...

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MEVIT 4300/3300

Gunn Sara Enli, Associate professor

Department of Media and Communication [email protected]

Micro-Targeting &

‘The Long Tail’ principle

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Today’s topics •  ‘The Long Tail’ theory -  The hit book, the buzz,

-  The criticism, the moderation.

•  The ‘20/80’ theory -  The Pareto Principle,

-  Hollywood and box office

Institutt for medier og kommunikasjon (IMK)

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‘The Long Tail’ as a bestselling book ü  A bestseller paperback – an academic airport novel

ü  Why did it become a bestseller?

- Author: Editor-in-Chief of Wired magazine

- Storyline: One main argument. Good examples.

- Product: A marketing concept and future prospects.

- Concept: Based on a visual graph and a catchy phrase.

Institutt for medier og kommunikasjon (IMK) 4 >

‘The Long Tail’ Concept


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The definition

ü 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.

ü When consumers are offered infinite choice, the true shape of demand is revealed. And it turns out to be less hit-centric than we thought. People gravitate towards niches because they satisfy narrow interests better, and in one aspect of our life or another we all have some narrow interest.


The Three Forces of ‘The Long Tail’

q Democratize Production (e.g. Wikipedia, blogs)

q Democratize distribution (e.g. Amazon, eBay, iTunes)

q Connect supply & demand (filters; Google, recommendations)

q  The long tail is a power-law that isn’t cut off by bottlenecks in distribution such as limited shelf place and available channels (Anderson 2009: 126).


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The Rise and Fall of the Hit

The mass culture era

ü Analogue (70s & 80s)

ü Radio-hits, MTV-hits

ü World of Scarcity

ü Expensive advertising

ü National markets

The era of niches

ü Digital (95/00s)

ü iTunes, YouTube

ü World of Abundance

ü Word-of-Mouth

ü Global markets


Euphoric optimism

“Choice is simply what we want, and

apparently what we always wanted”

(Anderson 2009:200)

“The cultural shift toward minority

culture is already bringing a richer,

more vibrant culture”

(Anderson 2009:254)


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…..but is it true?

q Brief discussion (3-5 min.)

q  ‘The Long Tail’ theory claims that digital technology changes the relation between supply and demand to a degree that customers will be served as niches, and even individuals, rather than as masses.

q Compare one 80s media product with a 00s product. E.g. the 1982s hit movie E.T with the contemporary pop artist Justin Beaver

Institutt for medier og kommunikasjon (IMK) 10 > Institutt for medier og kommunikasjon (IMK)

Ground Zero: The Music Industry

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The TV-Industry


The book market


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Scale + Scope = Hits?

Economics of Scale

Ø Initial costs / Marginal costs

Ø Marginal reproduction costs

Ø 100 viewers = 1 mill viewers.

Ø More profit in large markets.

Ø Media hits:

Economics of Scope

Ø Modify media products to various markets.

Ø Multi-product production.

Ø Profit from various markets.

Ø  = Media hits:


The 20/80 Rule: The Pareto Principle ü  Italian economist

observed that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.

ü  The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent).

ü  Publishers make 80 % through bestsellers, and 20 % by ‘non-sellers’


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...but why don’t just go for the 20%?


ü  Gaussian distribution ü  The 20/80 rule

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The Film Market Product: •  Access to movie (direct/indirect) is the product.

•  ”Film is like no other product. It only goes around once” (de Vany 2006). Markets: •  Theaters revenues: only about 25%.

•  DVD sales revenues: about 40%.

•  Television revenues: 28%.

•  Secondary revenues (spin-off products etc.): 7%. (source: 2007/2008). Ø  The Winner-Take-All:

•  Only 2 in 10 make profit.

•  Less than 5 % earn about 85 % of the profit in the business!

•  Top 4: 20.5 % of total box office revenue

•  Low 4: 0,0036 % of total box office revenue (de Vany 2006)

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The movie market: How to make a box office success?

q Quality of the movie. Reviews, Awards (Oscars etc.)

q  Film genre. (action, drama, comedy, science fiction etc.)

q  Film stars. Casting celebrity actors (with track record)

q High budget. Special effects, high production value.

q Heavy marketing (trailers, boards, press conferences etc.)

q  The opening (First week will determine hit/non-hit)

q  The X-factor (unknown success criteria, unpredictable)


Designed to be a blockbuster?


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The success formula?

Industry approval adds app. $7 million to box office revenue.

Academy Award nomination: $6 million dollars per nomination.

Reference: http://www.ser.tcu.edu/2005/SER2005%20Terry%20Butler%20DeArmond%20137-148.pdf


“There is no formula”

Ø  “The probabilities of the past may not be those of the future. No amount of

confirmation makes a theory about the movies right. There are black swans out there. There is no formula. Nobody knows anything” (de Vany 2006).

Ø  “Titanic” is a rare event, - outside the sample and beyond experience. Past successes gives executives an illusion of control”.


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Long tail and Micro targeting ü  Hits are not dead. What’s dead is the monopoly of a hit.

ü  Hits are a gold mine, but unpredictable and hard-to-get.

ü  Niches are more predictable, but less of a gold mine.

ü  Micro-targeting is based on advanced customer-knowledge.


Next week: Gillian Doyle

ü  One week. One professor. 5 lectures.

ü  Starts Monday at the Theatre near you (205)

ü  Read: Doyle, Anderson, + Suggested reading


Micro-Targeting & The hit book, the buzz, ‘The Long Tail ... · ‘The Long Tail’ principle 2...

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