How the Internet (combined with our basic human nature) turned our economy more and more into "the-winner-takes-it-all" economy instead of a long tail one – in music, film, t-shirts and mobile apps. What are the reasons and mechanism and how can we avoid becoming long tail losers and become short head winners. Now let's do some name dropping of what we will actually see in this presentation: Avatar, Italy, Steven Spielberg, Seinfeld, Steve Jobs, James Cameron, Friends, Netflix, Madonna, Busted Tees, Angry birds, Mark Zuckerberg, sneakers, Psy, 50 shades of Grey

1. The 10 rules of
the short head

2. I don’t think it’s realistic to try and topple ‘Titanic’ off its perch

4. RankTitleStudioWorldwideYear^ 1AvatarFox$2,782.32009^ 2TitanicPar.$2,186.81997^ 3Marvel's The AvengersBV$1,518.620124Harry Potter and the Deathly Hallows Part 2WB$1,341.520115Iron Man 3BV$1,215.420136Transformers: Dark of the MoonP/DW$1,123.820117The Lord of the Rings: The Return of the KingNL$1,119.92003^ 8SkyfallSony$1,108.620129The Dark Knight RisesWB$1,084.4201210FrozenBV$1,072.4201311Pirates of the Caribbean: Dead Man's ChestBV$1,066.2200612Toy Story 3BV$1,063.2201013Pirates of the Caribbean: On Stranger TidesBV$1,045.7201114Jurassic ParkUni.$1,029.21993^ 15Star Wars: Episode I - The Phantom MenaceFox$1,027.01999^ 16Alice in Wonderland (2010)BV$1,025.5201017The Hobbit: An Unexpected JourneyWB$1,017.0201218The Dark KnightWB$1,004.62008^

5. RankTitleStudioWorldwideYear^ 1AvatarFox$2,782.32009^ 2TitanicPar.$2,186.81997^ 3Marvel's The AvengersBV$1,518.620124Harry Potter and the Deathly Hallows Part 2WB$1,341.520115Iron Man 3BV$1,215.420136Transformers: Dark of the MoonP/DW$1,123.820117The Lord of the Rings: The Return of the KingNL$1,119.92003^ 8SkyfallSony$1,108.620129The Dark Knight RisesWB$1,084.4201210FrozenBV$1,072.4201311Pirates of the Caribbean: Dead Man's ChestBV$1,066.2200612Toy Story 3BV$1,063.2201013Pirates of the Caribbean: On Stranger TidesBV$1,045.7201114Jurassic ParkUni.$1,029.21993^ 15Star Wars: Episode I - The Phantom MenaceFox$1,027.01999^ 16Alice in Wonderland (2010)BV$1,025.5201017The Hobbit: An Unexpected JourneyWB$1,017.0201218The Dark KnightWB$1,004.62008^

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7. The #1 rule of the Short Head :
Hits are now Mega-hits

10. “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“

11. 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

13. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits- all containers

15. “our culture and economy is increasingly shifting towards a focus on a relatively small number of “hits” (mainstream products and markets) at the head of the demand curve and away from a huge number of niches in the tail“

16. When consumers are offered infinite choice, the true shape of demand is revealed. And it turns out to be more hit- centric than we thought. People don’t gravitate towards niches because they satisfy narrow interests better, and in one aspect of our life or another we all have some narrow interest. No we don’t!

17. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits- all containers. There still is!

19. The #2 rule of the Short Head :
The long tail is dead

20. The #2 rule of the Short Head:
The long tail is dead

22. 1906

24. Pareto efficiency

25. To me, the 80-20 rule is dead
Tyler Smith, Niche Retail

26. Tyler Smith, Niche Retail

28. Every one of the 1 million tracks in iTunes had sold at least once

29. So what?

30. the top 10% songs gets 86% of streams

31. 2.7% of Amazon’s titles produce 75% of its revenues

32. the top 20% of movies increased from 86% in 2000 to 90% in 2005

33. 10% of the product on iTunes accounts for 90% of the store’s total sales

34. 1.1% of the tracks on iTunes accounts for 86% of the store’s total sales

36. The #3 rule of the Short Head:
Welcome to the 10/90 principle

37. The short head of Movies

41. You’re at the point right now where a studio would rather invest $250 million in one film for a real shot at the brass ring, than make a whole bunch of really interesting, deeply personal — and even maybe historical — projects that may get lost in the shuffle because there’s only 24 hours”.

42. The short head of Music

45. Industry has a lot to do with things… The industry is tough, especially for a band like us, a rock band right now. We’re not bitter about it or anything like, “Fuck the music industry”, that’s the last thing we’re thinking. We’re all continuing to do music

48. “The music industry is a microcosm of what is happening in the U.S. economy at large. We are increasingly becoming a “winner-take-all economy,” a phenomenon that the music industry has long experienced.... The lucky and the talented – and it is often hard to tell the difference – have been doing better and better, while the vast majority has struggled to keep up. These same forces are affecting the music industry. Indeed, the music industry is an extreme example of a “super star economy,” in which a small number of artists take home the lion’s share of income.”

49. The #4 rule of the Short Head:
If there is a long tail we might find it… but that is about it

51. The short head of Fashion

53. 500,000 Designs submitted

54. 5,000 Printed

55. 99%

59. “For t-shirts I think we’re probably still close to that 20% of the shirt produces 80% of the revenue... Our business is certainly driven by hits… That being said, we still have a nice benefit from having a big catalog to take advantage of the long tail as well…

60. Why?

61. The #5 rule of the Short Head:
Consumers are not unique and they all want the same hits!

62. The #6 rule of the Short Head:
Even unique consumers have limited time

63. The #7 rule of the Short Head:
For retailers, dealing with thousands of designers does require a lot of resources

64. To me, the 80-20 rule is dead
Tyler Smith, Niche Retail

66. The short head of mobile Apps

67. More than 1M Apps,
300K developers,
revenues of 10B$ a year on App-store alone

68. Apps downloads distribution
Most Apps (~750,000) don’t reach 1,000 downloads!

69. Apps downloads distribution
4.5% of the Apps generate 86% of the revenues
0.1% generate more than 50% of the revenues

70. “Apple App Store: Overpopulated with Apps Nobody Uses”
, Jun 2009

71. 40% of Apps earned less than 100$ per month from ads, another 30% earned more than 100$ but less than 500$ per month. 2% earned more than 20,000$
, Sep 2012

72. Less than 0.01 Percent of Consumer Mobile Apps Will Be Considered a Financial Success by Their Developers
, Sep 2012

73. But these lucky ones will rock!

74. Why?

75. Why?
35 million downloads in less than 2 months
You already know this one

76. Why?

77. The #8 rule of the Short Head:
Everybody can become short head winners.
Not just the big studios or those who have done it before
But…

78. Six weeks ago, we released this game and it has been an incredible and wild ride since
Dan Porter, OMGPOP (Draw something)

79. The ride got wilder…

80. The #9 rule of the Short Head:
the short head usually doesn’t last long…
enjoy it while it is there

82. Why doesn’t the long tail work for Apps?

84. The average person installs 25 apps (including a flashlight) . How do you choose 25 out of a million?

86. Song Pop is one of the most fun Facebook games I’ve played in a while

88. Discovery problems, huge variety and viral elements that boost word of mouth accelerate the short head

89. So why aren't we special?

90. 2.5 main reasons
Reason #1: US!
Reason #2: social media

91. ”No problem there. Conformity is an obsession with me”

92. Social proof

93. ” Want to hear something weird? Always.”

96. positive social influence increased the likelihood of positive ratings by 32% and created accumulating positive herding that increased final ratings by 25% on average

100. #1.5 the long tail itself

101. The #2 rule of the Short Head:
The long tail is dead

102. We no longer choose – we pick
Barry Schwartz , Author
The Paradox of Choice

104. Somebody is making money of the long tail

108. #2 Social media

109. 1962

110. Diffusion of innovations

118. The result

119. We see the same movies

120. Buy the same t-shirts

121. The same gadgets

122. Read the same books

123. Watch the same clips

124. This is how long it took them to reach 50 million users
We adopt faster
Much faster

126. The #10 rule of the Short Head:
Aim for the short head

127. To be continued…