Content - Will the Long Tail wag the Dog?

This is a rather hackneyed title but relevant all the same.

It was most amused when talking to a senior executive of a TV Channel on monetization of Content, I mentioned the importance of Long Tail and to my utter shock he had a total ‘what are you talking about look’ on his face. Not withstanding the fact that I love dogs, luckily for me the gentleman did not start talking about his dog (if he had one).

So what is a Long Tail?

Diagram on the right,  as described by Chris Anderson

Why is it important for Content Owners and Indian Content Distributors to understand the concept?

Here is the interpretation of Ankit Maheshwari is co-founder and CEO of Instablogs Network.

 Long Tail is about giving Choices to people

·         to have access to huge amounts of content

·         to access it in the way they like

·         to access it anywhere and anytime

·         to access it on any device they want

The advantages are obvious –

·         More customers will get access more content

·         Directly and indirectly benefit the content owner and distributors of content

·         Niche content owners/publishers get access to audience

Take the example of TV Channels in India. Here is how TAM describes it -

It is obvious from this chart that the tail (Choices) is growing longer. Why? Primarily due to increase in distribution capacities that let more amount of content to be made available - Digital TV which has increased the choices for the viewers to watch more channels. 25 years back we had 2 channels, 10 years back we had 25 channels and today we have over 250+ channels dished out to us via Digital TV (DTH, Digital Cable, IPTV). We now have multiple choice of channels in news, GEC, Niche, ….  And there are more coming.

It’s about shifting the power from the Content Owner to the Content Viewer.

However, many don’t know how to do it, some are scared for their IPR violation, this is in spite of the fact that billions of dollars worth of content is pirated every year.

It’s time Content Owners realize is to make piracy unaffordable by distributing content on maximum distribution channel at an affordable price. It’s time Content Owners (who by and large, do not understand technology) adopt newer distribution channels, not only to promote but even commercially distribute their content, e.g. YouTube, NetFlix …

Many believe that the big bucks are in the recent ‘hits’ which has been proveb wrong, the mega bucks are in the ‘niche’.

Netflix has made a good business out of what’s

unprofitable fare in movie theaters and video rental

shops because it can aggregate dispersed audiences

.

Music companies from the west did it in spite of initial resistance and have gained from it, e.g the classic case being music on iPod.

The Film Makers must realize that in the long run none of their movies can make huge losses eventhough the movie might have bombed on the box office if they have caught the Long Tail.

By adopting traditional as well as digital sources of distribution, the content owner generates much more revenues then he has been making with traditional/limited distribution channels.

Considering the film life is worth one or two weeks at the box office, the digital distribution opportunity comes much more in play.

While theatrical release is their main source of income, followed by satellite rights, other digital rights becomes a near perennial source of income for them.

VOD, Mobile and Downloadable Audio & Video is their biggest opportunity. Unfortunately in India we do not have the best of connectivity to do this but times are changing and opportunities are there to be taken.

In the US, approx. 80% revenues of a film comes from Home Entertainment Distribution and 20% from Theatrical release over a period time, is a great point of inspiration for the Content Owners.

It also disapproves of the notion that only new films generate revenue. Given the choice it is observed that viewers would equally prefer watching older films. Ask yourself, wouldn’t you watch a Padosan or a Madhumati or a Gladiator or Roman Holiday or your old episodes of your favorite TV Serial … as and when you want to watch it instead of being on the mercy of the Television broadcasters?

There are also implications of the Long Tail for the Channel Owners as Atul Phadnis has put it well in his blog –

Implications of Long Tails (for TV Channels):

1. Lower TV ratings for even 'Mass' Channels
2. Lesser predictability to new launches
3. Higher failure rates. Rather spectacular crashes for big, mega program launches
4. Targeted marketing is a need for channel/ program marketing
5. Higher Marketing budgets for programs that cut across different segments                      However, the biggest problem of all is -
6. Need for fatter pipeline of content innovations - especially since the failure rate is going up

Implications for the Viewers:

1.      Will make the business case for better, alternative and father pipes to enable easy distribution of content

2.      More ‘niche’ channels

3.      Pay for what you watch scenario – no ala carte’ pricing

4.      Watch, when you want to, where you want to and on the device you want to.

Implications for the Content Owners:

1.      Larger distribution of their content.

2.      As a result content becoming cheaper and more affordable by the viewers.

3.      Piracy will become unaffordable and will be less entertained.

4.      Increased Revenue Streams

The companies at the vanguard of it are showing the way with three big lessons. Call them the new rules for the new entertainment economy.

RULE 1: MAKE EVERYTHING AVAILABLE

RULE 2: CUT THE PRICE IN HALF. NOW LOWER IT.

RULE 3: HELP ME FIND IT

It’s time for Content Owners to be a bit digital savvy. Time to Wag the Tail.

Note: The phrase The Long Tail was first coined by Chris Anderson in a 2004 article in Wired magazine [1] to describe certain business and economic models such as Amazon.com or Netflix. The term long tail is also generally used in statistics, often applied in relation to wealth distributions or vocabulary use. However, we will concentrate on the Long Tail of Indian Content. While writing this post some of Chris’s Long Tail presentation has been referred and quoted only for the sake of clarity.