Chris Anderson on YouTube

Chris Anderson Explains the Long Tail

We are fortunate to live in these times and to be able to look at our culture from our databases., says Anderson. He goes on to explain his long tail theory with the 80/20. There are infrequent events that have high impact. These are low frequency, high amplitude events like earthquakes.

Another example is of most of the population being concentrated in cities. This 80/20 rule is true in human economies,  human affairs and nature itself.

If plotted on the linear curve  it would show a large concentration on the left. If we plot if log-log we would get a sloping line.

In the box office, the #1 film made a lot of money. then there are many over time that did not fare successfully. The vast majority do not make it to megaplexes as there are not enough screens for them. This means that our belief about Hollywood taste is shaped by the distribution channel. These bottlenecks distort the market and our perception.

In our era, we have Internet distribution channels that do not have much of the bottlenecks like storage area or shelf space. We now have access to the latent market, which we could not reach with traditional distribution.

Rhapsody carries niches from this domain in music. These are tracks that Walmart does not carry. Rhapsody carries far more inventory than Walmart. The same difference is seen between Netflix and Blockbuster and between Amazon on Borders.

The low sellers were not significant in earlier markets and are beginning to count toward sales online. We are moving toward a trend where half the market is sold via the old model and the other half through the new distribution models.

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My Web 2.0 surfings for 10-15-2008

TED: Chris Anderson (Wired): Technology's Long Tail
I did not hear anything about the long tail in this speech.

• In business, one needs to forecast interests, and also build a product.
• Answer why and when about about the product
• The unified theory on technology trends states that there are four stages for a technology to get.
  
• Each Stage is a collision.
  
• These stages are:

1. The technology must fall below a critical price.
2. It's users must rise above a critical mass.
3. It must displace another technology
4. The technology must then commoditize

• WIFI has reached the 1st two stages.
• The DVD has gone through all the four above stages.
  
• Netflix could capitalize on the DVD model as DVDs was smaller in size to VHS tapes.As DVDs get cheaper, the premium brands like Sony loose out.
• Gene sequencing is falling in price to 40 million from billions a few years ago.At the same time, more genes are being found
• Another example is the generic drug. The effectof the generic drug is is dramatic. The cost of these is typicallyis now 50c a day. More people can be treated cheaply.
• Linux has now switched to critical mass.
• The hybrid car is another technology. Electric motors are now being introduced. This can lead to new era of automobiles
• VOIP is another example. Skype has 4M users.
• Harddrive space is being made almost free these days. This is an example of commoditization
• Fiber Optics: Calls to India costed $2 per minute in 1990. The prices are now about 7c a minute.
  

See the presentation here

Eric Schmidt's short take on 3.0

• Web 2.0 is mostly Ajax.
• Web 3.0 is about applications in the 'cloud' which are fast and customizable. They are distributed virally: Social Networks, email.
• This is dramatically different from the mainframe and the PC era.

See the presentation here.

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