Long Tail stops wagging

Google CEO Eric Schmidt says:

 although the tail is very interesting and we enable it, the vast majority of the revenue remains in the head. And this a lesson that businesses have to learn. While you can have a long tail strategy, you better have a head, because that’s where all the revenue is. 

and this prompts Long Tail author Chris Anderson to make several admissions:

But there were clearly exceptions to [Long Tail behaviour]. One of the main ones was the irony that there was a very short Head of Long Tail aggregators: Amazon, iTunes, Google and their kin dominate their markets to a blockbuster-like degree. 
I blamed this on a still-young market and assumed that even aggregators would fall victim to the flight from one-size-fits-all someday. But new research from McKinsey (free registration req'd) suggests that this sort of radical inequality is increasingly the norm as markets get more networked. 

"Powerlaws do imply wildly unequal distributions of money, power, celebrity and everything else." – so much for 'democratization'.

And it's not just companies. The Long Tail–the powerlaw created by network effects–may be creating super-celebrity, too.

As I've said many times, both in the book and … Continue reading

Link Books to Their Open Library Page

When you reference a book and want readers to be able to find more about it, it's common to link to Amazon. There are problems with Amazon being the default site for all books: by linking there you are basically recommending that your readers support Amazon and don't support your local bookstore.

So how about linking to Open Library instead whenever you mention a book, like the best novel ever? It's an evolving initiative with a fine mission: One web page for every book. It's got some quirks still – the treatment of books with many editions is a bit of an issue – but it's a great idea and it's noncommercial, which is hugely important for a common resource. You won't find much information there about most books, but you will find links to buy a book at some of the bigger online bookstores and to your local library catalogue if you're lucky.

Now if only they could link to your local bookshop, which should be possible for those who have online ordering stores like our neighbourhood one, I'd be very happy with it. 

Obviously there's more work to be done there, but one way … Continue reading

Cloudy Monopolies II:

After yesterday's bout, Tim O'Reilly responds to Nicholas Carr and Nicholas Carr responds
to Tim O'Reilly's response. There's something about the blog world that
makes referring to these two as Carr and O'Reilly seem terse, and yet
to call them Nick and Tim just looks unctuous. So I'll call them by
their initials: NC (C for Carr and Cloud) and TO (for Tim O'Reilly and
Two point O).

To bring you up to date:

  • TO claims NC
    interpreted "network effects" too narrowly ("Nick only sees first order
    network effects") while NC claims TO interpreted "network effects" too
    broadly ("today O'Reilly is expanding his definition of 'network
    effect' far beyond his original definition").
  • Meanwhile NC claims
    that TO interpreted "cloud computing" too narrowly ("O'Reilly is here
    using 'cloud computing' in the narrow sense…') while TO claims NC
    interpreted "cloud computing" too broadly (well, I can't find a
    sentence to back that up, but it's just too symmetrical to leave out).

TO
actually has a point, and I agree with him that NC is overly-narrow.
There are many … Continue reading

O’Reilly vs Carr on Cloudy Monopolies

In the offline world it is obvious that industries have different levels of concentration. The forces that shape the grocery store industry are different from those that shape the automobile industry, home furnishing stores, copper mining, the insurance industry, and so on. In contrast, there is a tendency to think as if all digital industries are governed by the same set of factors. We talk about iTunes as if it has something to say about the success of SalesForce.com; about Netflix as if it has something to do with the success of Google. The runaway success of companies like Facebook and Amazon, which provide services that get more valuable the more people use them, has led to a focus on network effects as the driving force behind industry concentration. But it's obviously true on the Internet just as it's true elsewhere that selling books is different from selling advertising. I say all this because A-list technopundits Tim O'Reilly and Nicholas Carr have competing posts about industry concentration in the world of cloud computing. And while I lean towards Carr, each oversimplifies the issues. O'Reilly coined the phrase Web 2.0 and he says the … Continue reading

All the Web’s a Stage

Timothy Lee has an excellent post at Freedom To Tinker. Here is some of it:

[T]alking about "free riding" as a problem the Wikipedia community needs to solve doesn't make any sense. The overwhelming majority of Wikipedia users "free ride," and far from being a drag on Wikipedia's growth, this large audience acts as a powerful motivator for continued contribution to the site. People like to contribute to an encyclopedia with a large readership; indeed, the enormous number of "free-riders"—a.k.a. users—is one of the most appealing things about being a Wikipedia editor.

This is more than a semantic point. Unfortunately, the "free riding" frame is one of the most common ways people discuss the economics of online content creation, and I think it has been an obstacle to clear thinking.

The idea of "free riding" is based on a couple of key 20th-century assumptions that just don't apply to the online world. The first assumption is that the production of content is a net cost that must either be borne by the producer or compensated by consumers. This is obviously true for some categories of content—no one has yet figured out how to peer-produce Hollywood-quality motion pictures, for example—but it's far from universal. Continue reading