Economics of New Media, 2008

Monday, November 3, 2008

Catch(in) the long tail

I doubt how many people buy something that was recommended by someone. I’ll stick with books here, but how long has it been since you went to a bookstore to buy a book?

When my friends recommended books to me, I just go to the bookstore and picked up the specific book. Without a car, I find it hard to get around, so I prefer just buying it online. I get deals and I also get it delivered to my doorstep. But the best thing about shopping online is that the sites also recommend similar books I might like; ‘might’ being the operative word. So far, I have liked the books that I was recommended. But what gets to me is that it feels like someone is watching me and that a random software decides what I should like or want.

Sure, this creates a market where the cost of production and distribution becomes practically zero. With this in mind, it won’t be long till there are more ways to sell obscure material online. But there is a catch. In the article, Anita Elberse says that sales of well-known material are blockbusters to marketing and obscure content could be bad for effective sales because cost per sale of every transaction actually goes up.

Sunday, November 2, 2008

Human + machine = best search results

I love tools that give good recommendations! As both in “The Long Tail” and in “From Niches to Riches” when more products are available, it is hard for consumers to locate the product they are interested in. I wish I could find some other examples rather than books (cause they talked about amazon.com so much already), but I was playing with UT library site the other day and under a book I searched for, I saw tags (labels) showing up. It is supported by Library Thing.

I went to Library Thing website. It is a website that you can search for books. Each book is tagged by website members and you can see there are “members” of the book. I haven’t registered yet, but am guessing anyone can become a member of a book? You can see the list of members and each member has a profile and his/her own library. Pretty interesting site.

The problem is google is probably not enough (I like delicious.com, but it is still not enough). Googlezon in epic2014 is probably ideal for consumers. When you find a web page, there’s gonna be a recommendation says: people who like this page also like……

If someone can beat google on that part and use that search engine on every website, is google gonna die? (or become the second yahoo?)

one customer who buys can be better than 100,000 site visitor who doesn't

I thought this tied interestingly in with a point that I mentioned in my presentation Wednesday. With the advent of the web, people who launch web sites don't need to be seen my millions or billions of people. If their site is visited by just a handful of people (thousands, hundreds or maybe even dozens) who turn around and buy from them (or click the ads, or whatever), they can still be wildly successful.

The Washington Post reposted an article from the technology blog TechCrunch.com entitled "Blogger And Podcaster Media Network Looks To Turn Long Tail Blogging Into A Full-Time Job", which ties into the long tail concept as well as others we've been talking about this semester.

The founder of Blogger and Podcaster Magazine (who and which I personally had never heard of) has started the Blogger and Podcaster Media Network, which will help blogs with smaller audiences become financially lucrative. Enrolled blogs will get packages from communications and public relations service PR NewsWire. There will be an affiliate program and the group will help secure more advanced ads with combined purchasing power.

Saturday, November 1, 2008

YouTube Citizennews

Has anyone seen this? Citizen journalism on YouTube. Publishing the best "news" content on YouTube.

http://www.youtube.com/citizennews

Historical Trends and Patterns in Media Economics

Picard brought up an excellent observation when he stated that most in our field have backgrounds in psychology, sociology and other scholarly fields that comprise of very different understanding of research compared to the economics field. And before, according to Picard, it did not matter because the media was not the commercial giant it is today. Right under our noses, scholars in our field have suddenly (at least to it seems sudden to me) awoken to these giant conglomorates and are now scrambling to understand why the city's newspaper has shrunk to only one newspaper and even then is laying off staff that have worked there for decades.
Should our field revamp the structure and alter the thinking and teaching methods to include the new wave of our media field? And if so, how can we do that?

The Long Tail…

Besides the idea of targeting the “niche markets”, another important condition for a long tail business to survive is to effectively guide consumers in the sea of products by “following the contours of their likes and dislikes”. I think that is the key element for the success of Netflix and Amazon, which is to keep on providing information related to people’s purchasing interest and that keep people continue to stay on their site (even they may not be buying things instantly…). I don’t think the online news providers have done a good job in this area, just by looking at the time people spent on the news site.

And before we get too excited about the long tail theory, there are some critics to look at: There is an article published on Harvard Business Review analyzing market datasets to show that

First, the tail is long but extremely flat--and, as online retailers expand their assortments, increasingly so. Second, compared with heavy users, light users have a disproportionately strong preference for the more popular offerings, while both groups appreciate hit products more than they like those in the tail.