This is going to be fun

From the blog of Shelly Palmer, chairman of the national Advanced Media Technology Emmy Awards Committee, a strong reaction to my NATPE speech.

"The Long Tail is a brilliantly written, very compelling description of a power law. It is not an economic reality and it has almost no relevance to the economics of the television business. Although I personally think Chris is brilliant, the conclusions he drew from the historical television data points he presented during his keynote are incorrect. The deck illustrated a profound lack of understanding about television production, distribution and the advertising and subscription revenue that drive the business. (Author's note: We will be publishing a paper that deconstructs the Long Tail for the online video business in a few weeks.)"

I can't wait. In the meantime, Shelly, a few thoughts:

1. How you apply the Long Tail to television depends entirely on how you define "television". If you define it as "video delivered primarily via broadcast channels" (ie, "commercial television" made and distributed by the people who make up the NATPE audience), I'm entirely with you--the LT is not yet a strong driver there and may never be, mostly because the economics of broadcast delivery aren't changing much.
2. If, however, you define it as "video from any source, delivered any way the consumer wants it", then I really hope your analysis gives the YouTube effect the weight it deserves. The fact that it's not coming primarily from the NATPE crowd shouldn't stop you--viewers increasingly don't care about the provenance of what they watch.
3. You say "Content that follows its viewers around is not television." Okay, you're at least clear in your definitions. But is that really a useful distinction anymore?
4. Broadcast television has largely been a free-to-air, advertising-supported medium. As you know, that doesn't necessarily mean that on-demand, "slivercast" television will be, too. I'd love to see you explore the lesson that television can learn from the music industry, which is now being forced to adopt a range of revenue models (from subscription to advertising) to compensate for the decline of the old pay-for-product business.

Shelly asks: "Can the big six television distribution organizations that literally are the television businesses transition or metamorphose into 21st Century content distribution companies?" Maybe not. But that doesn't mean that others won't create a Long Tail market for video all the same.

He's one of the smartest analysts in the TV business, so I have every confidence that he will produce a report that shows he's equally good on the emerging anything-anywhere video business. Just so long as he recognizes that this is another animal altogether.

Comments

[Matt Mayers]

I think you'd begin to see an LT effect in television if, as an example, Comcast started letting the Average Joe make their content available OnDemand. As long as there was quality content provided, you'd likely see viewers watching more niche content on such a service and less of the corporate approved content that you get on network television.

That said, I seriously doubt the above scenario will ever be reality.

[Kevin Alexander]

Shelly Palmer should read his opening line "no relevance to the economics of the television business". That is why Google paid so much for YouTube, they understand the economics of the Long Tail. The thing that Shelly and his kind don't understand is the money is flowing out of the Television industry and into other mediums. I guess he is missing the stats like these http://www.imediaconnection.com/content/6759.asp

[Dean Hedges]

i like this blog ... thanks for allowing us to comment and to read up on some fascinating theories that are developing out of the new economy ... i like to think of the LT effect ... in the past when i have thought about it i referred to it as an open system ... like ... a closed system{early tv} eventually descends to the lowest common denominator {sex&violence} while an open system creates choice which always leads to quality ... in a rather fascinating statement "Who is Writing the Future" the following statements are made ... "It is apparent that the decades immediately ahead will see the integration of telephone, television, and computer technologies into a single, unified system of communication and information, whose inexpensive appliances will be available on a mass scale." ... it goes on to state "It would be difficult to exaggerate the psychological and social impact of the anticipated replacement of the jumble of existing monetary systems--for many, the ultimate fortress of nationalist pride--by a single world currency operating largely through electronic impulses." ... so ... i guess open systems can become closed and closed systems can become open and if one looks closely enough one can see the LT in most anything ... oneness,dh

[Philip Hodgetts]

The irony of this is that I keynoted the Academy of TV Arts and Sciences' NEXT TV seminar in November 2 and Long Tail theory, and how it might apply, was part of my keynote (available online now at http://www.digitalproductionbuzz.com/philip/Go_For_the_Gold_s.mp4 fwiw). There is another way of defining "Television" that I rather like and it has two parts, somewhat inter-related. Television is produced as a business (1) with the intent of making money by people who have the craft skills and professional desire to apply those craft skills to making high quality production (2).

in the context of "Television" I see a serious migration to the "fat belly" - the area between the "hit" and the very thin Long Tail. In "Television" audiences of 120,000 to, say, 1 million. (Aggregated worldwide, of course.)

As you said, it all depends on how you define "Television".

Philip

[Dean Hedges]

Internet to revolutionize TV in 5 years: Gates
Sat Jan 27, 2007 10:59am ET
http://today.reuters.com/news/articlenews.aspx?type=technologyNews&storyid=2007-01-27T155908Z_01_L27910975_RTRUKOC_0_US-DAVOS-INTERNET-TV.xml&src=rss

By Ben Hirschler

DAVOS, Switzerland (Reuters) - The Internet is set to revolutionize television within five years, due to an explosion of online video content and the merging of PCs and TV sets, Microsoft (MSFT.O: Quote, Profile , Research) chairman Bill Gates said on Saturday.

"I'm stunned how people aren't seeing that with TV, in five years from now, people will laugh at what we've had," he told business leaders and politicians at the World Economic Forum.

The rise of high-speed Internet and the popularity of video sites ...

[Deva Rajan]

When you have 500 TV channels, there is already an effective
"long tail" phenomenon even in broadcast TV, albeit in a scaled down
version.
Most of the channels in these lineups, other than the few popular ones,
are niche and have low, but highly segmented viewership. Shelley should
very well know this, since such highly targeted demographics are what
those niche TV channels sell to their advertisers. Just check out
Golf Channel, Food Network, SOAP, etc. It is common knowledge that
viewership for the main broadcast channels [ABC, NBC, CBS, FOX] and major
cable channels are dwindling annually, and are being subject to a
winner-takes-all phenomenon whereby only a few highly promoted "hits"
get large viewerships and other programs in such channels have steadily
lower audiences.
Take each TV channel, determine its popularity [= average daily viewership],
sort them in descending order of popularity, then plot a graph where X axis is
popularity-sorted channel, and Y axis is its popularity. Viola, you would get your
classic long-tailed curve.
Shelley clearly doesn't understand his own business.

[John I.]

I agree with Chris Anderson. I prefer to spent my time on YouTube watching whatever I like, anytime, without being interrupted by commercials every now and then. I am also very curious about Shelly Palmer's answer. The one I red so far doesn't satisfy me......the wheels of infinite choice are in motion, and their motion cannot be undone!!

[David H. Deans]

As an industry analyst, I review Shelly's newsletter every week. Frankly, he is one of the more open-minded people in the legacy Television sector. That said, I wrote to Shelly regarding his perspective of the LT threat to traditional TV.

I compared it to the legacy Western Union response to the evolution of data networking over telephone networks -- they assumed, if it isn't just like Telegraphy, then it can't be a serious threat. Western Union and their peer group were myopic, because they didn't comprehend that they were really in the 'communications' business.

Clearly, it's difficult for some folks to unlearn a limited legacy perspective that's validated by decades of proven experience. Moreover, the apparent disconnect with 'young viewers' is the greatest indication that linear broadcast TV is in deep trouble. Fewer young American's consider themselves part of the 'captive audience' that the broadcast media execs like to refer to when they ask marketer's to open their wallet to pay for expensive un-targeted advertising on TV.

TV advertising's 'dirty little secret' of perpetual irrelevance and poor results can't be ignored by those who have to justify their marketing budgets to better informed CEOs who couldn't care less about the conventional wisdom of ad agency executives that hold on dearly to their opinions that were formed in a bygone era of mass-media dominance.

[Anand Narayanan]

Chris,

Why doesnt LT apply to Broadcast television?.....what is syndicated content, if not LT in the broadcast world....the fact that I can reruns of Friends and Seinfeld years after they have gone 'off air'?...I think LT is very relevant to the digital/web world of broadcast as well...In2TV is the internet LT of the Broadcast world.....

Regards,
Anand

[Amelia Torode]

Agree with Anand's post - the other thing to look at are the current VOD services in the UK. You can watch old episodes of Friends, Little Britain etc. Isn't that a long tail?

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[Polin Armsley]

agree with Chris Anderson. I prefer to spent my time on YouTube watching whatever I like, anytime, without being interrupted by commercials every now and then. I am also very curious about Shelly Palmer's answer. The one I red so far doesn't satisfy me......the wheels of infinite choice are in motion, and their motion cannot be undone!!