A Wall Street analysis of the Long Tail of media

Lex Miron, the executive director of CIBC World Markets’ Media and Entertainment practice, has an interesting two-part analysis of the Long Tail in online media. Part One is here; Part Two is here. An excerpt from his conclusion:

As we’ve seen with television viewing habits, more choice leads to increased usage. Thus, as more relevant, “bookmarkable” properties are added, it’s likely that value will be created for audiences, advertisers, and investors. To understand the importance of the tail, consider the following:

• Our defined tail’s power rating grew by 187%, while the head’s power rating grew by just 15%.
• Of the interactive-media properties in the tail, 10% rose in the rankings, and one moved to a spot in the top 50.
• Of the interactive-media properties in the tail, 23% decreased in rank, though they continue to exist in the Nielsen//NetRatings (NNR)  universe.
• Of the interactive-media properties in the tail, 67% fell out of the NNR  universe completely (falling below 1,076 in January 2007).

It's an interesting perspective, marred only by the fact that it's based on the Nielsen//NetRatings data, which only includes the top 1,076 sites on the web. Considering that there are 70 million blogs out there, one could argue that NNR's data doesn't get much beyond the Short Head.

Indeed, you can get a back-of-the-envelope sense of how much NNR is missing by analyzing the data in this post by Technorati's Dave Sifry and assuming that traffic is roughly correlated to incoming links (which has certainly been our observation at wired.com). The top 1,000 sites (a number comparable to NNR's universe) tracked by Technorati in Nov 2006 collectively had about 5 million incoming links. The bottom 1.5 million sites collectively had about 30 million links.

If, indeed, traffic is correlated to incoming links, then NNR is missing about 80% of the web "power" out there by only focusing on the top 1,076 sites. Which means it's missing most of the Long Tail.

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