The Long Tail

Redesign update

Thanks for the feedback on the redesign. We've now fixed the two main problems--lack of white space on the left on small screens or non-maximized browsers, and no search function. We've now got five pixels of white on the left and the search bar is reinstated in the far right sidebar. Also, note that the microblogging sidebar on the right is really just a feed from my Tumblog, so if you want to comment on any of those posts just click on the title and it will take you to the Tumblog where comments are enabled. 

My projects seem to be heading down the Long Tail

Over the past five years, I've launched project after project. I love each one and put equal effort into each. And each is successful in its own way. But I can't help but notice that my interests are getting increasingly narrow, and as a result the monthly audiences for each project are falling by an order of magnitude with each iteration.

1. Wired: tens of millions of people
2. The Long Tail (book and blog): millions of people
3. GeekDad: hundreds of thousands of people
4. DIY Drones and BookTour: tens of thousands of people

I must break this cycle lest my next project fall below Kevin Kelly's 1,000 True Fans limit.

Somehow I think FREE will do the trick ;-)

Revised: the *four* kinds of FREE

A few weeks ago, I posted a diagram grouping free business models into three categories: cross-subsidies (eg, razor-and-blades), three-party markets (ads) and "freemium" (what economists call "versioning"; in this case most people get the free version). But as I was writing through that chapter, I realized that wasn't quite right.

The problem is that they're all cross-subsidies in one way or another:

• Paid products subsidizing free products: This is a staple of business, from the popcorn that subsidizes the loss-making movie to the expensive wine subsidizing the cheap meal in a restaurant. Free just takes that further
• Paying later subsidizing free now: The free cellphone with a two-year subscription contract is a classic example of the subsidy over time. It’s just shifting phone service from a point-of-sale revenue stream to an ongoing annuity. In this case, your future self is subsidizing your present self, with the hope that you won’t think about what you’ll be paying each year for the phone service but are instead dazzled by the free phone you get today.
• Paying people subsidizing free people: From the men who pay to get into nightclubs where the women get in free, to “kids get in free”, to progressive taxation where the wealthy pay more so the less wealthy pay less (and sometimes nothing), the notion that segmenting a market into groups by their willingness to pay is a conventional part of pricing theory. Free takes that to the extreme, extending to a class of consumers who will get the product of service for free. The hope is that the free consumers will attract or bring with them paying consumers (the aforementioned women or kids) or that some fraction of the free consumers will convert to paying consumers. When you walk through the amazing interiors of Las Vegas attractions, you get the view for free on the hope that some people will stop and gamble or shop.

So here I'll try another pass at getting this taxonomy right. The below has four kinds of free, with "gift economy" as the forth. That's still a form of cross subsidy, but it's so diffuse--threading from the reputation and attention economies back to money through some long process that's often impossible to quantify (like the way I'm going to financially benefit from this post)--that I don't include money in its diagram at all.

I've also modified the first to describe it as a direct cross-subsidy, which is to say that's typically you subsidizing yourself. The others are all other people subsidizing you, or you subsidizing other people. Finally, for economic purists out there, note that what I'm calling three-party markets (FREE 2) is what economists call "two-sided markets".

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The future of business is avoiding cliched subtitles

The Long Tail's subtitle was "Why selling less of more is the future of business". Shamelessly, the subtitle of my Wired FREE article was "Why $0.00 is the future of business".

But now comes my colleague Jeff Howe's new book, "Crowdsourcing: Why the power of the crowd is driving the future of business", and the forthcoming hardcover by David Edery and Ethan Mollick, "Changing the Game: How video games are transforming the future of business."

I've had a lot of good suggestions on subtitles in this post, so I'll dig through those. But I think I can say with certainty that the book won't have the same subtitle as the Wired article.

BTW, in book industry lore, there's a big difference between "Why" books and "How" books. The first is considered a bit intellectual, while the second is considered more practical. So assuming I'm going to use one of those two constructions, I'll have to decide between smart or servicey. 

What is the connection between inflation and peas?

As a magazine editor, I understand how hard it is to turn amorphous subjects into punchy covers. But can anyone explain the cover of the August 11th issue of Newsweek International? (I have a piece in that issue, so they sent it to me. It's not the same as the US edition's cover of that week, thankfully).

The Three Prices--more than zero, zero, and less than zero

My book is mostly about two prices--something and nothing--but at dinner in NYC with Jay Walker this week, he convinced me to include a discussion of a third price: less than nothing. That's right, a negative price: you get paid to use a product or service, rather than the other way around.

This is more common that you might think. Online, you see this in things like Microsoft paying you to use their search, but it actually has a long tradition in traditional marketing. You find it instant rebates and cash back marketing, and in the cash rewards, frequent flyer miles and other payments you get for using credit or loyalty cards.

Jay pointed out that a cashback rebate invokes a very different psychology than simply saving the money in the first place. For instance, he says that studies of how people spend the $1,000 (or whatever amount) check they get when they buy a new truck (or, more to the point, finance it), show that they tend to spend it like a lottery winning--an unexpected windfall. Guys would buy golf clubs that their wife would never normally let them purchase, and their wives wouldn't stand in their way. This despite the fact, which they must know, that they'll be paying that money back over the years to come, just like a credit card debt.

FWIW, TechCrunch says the Microsoft search cashback program has not been very effective. And, as it happens, such cashback schemes may run afoul of the anti-interest provision of Islamic law.

Redesign--finally!

After four years of a Typepad template I threw together one Sunday night and never revisited, this blog has a redesign, thanks to the team at wired.com.

Aesthetically, you'll notice that it's part of the Wired Blog Network, which means that there will be one ad at the top. I've now got a proper logo, which actually is inspired by the Thai version of The Long Tail book:

 

Although I'm now migrating to more research and writing on FREE, my forthcoming (Q2) book, I've kept the name and domain of this blog the same, mostly because it's still a theme that pervades everything I do. (It's also hard to throw away that much Googlejuice--the curse of network effects.)

Functionally, the main difference is that the old sidebar, which was based on a Typelist that was hard to maintain and didn't have timestamps and comments, has been replaced with a Tumblr microblogging feed. To comment on any of those microposts, just click on the headline and you'll be taken to my new Tumblog.

My fave passionate amateur example: GeekDad

I try not to write much about my day job here, but in the context of my last post about the virtues of passionate amateurs, I have to brag about the team at our Wired parenting blog, GeekDad. They are 17 amateurs, led by Ken Denmead (manga avatar shown), who by day is a civil engineer working in San Jose. Last month they did 1.4 million page views, making them #6 out of the 12 Wired blogs, and beating out several that are written by professional journalists.

As many have pointed out in the comments, there is a third group that beats both passionate amateurs and bored professionals, and that's passionate professionals. And it's worth noting that the top Wired blogs, which include our defense, science, gadget and car blogs are written by exactly that ideal, epitomized by DangerRoom's Noah Shachtman, who is perhaps the best defense tech writer in the world. 

But it's amazing to watch the GeekDad crew go. They're just dads who volunteered for the job when I put out the call a year or so ago. They are incentivezed by all the usual non-monetary things: expression, attention, reputation, etc. But more importantly they're well-led by Ken, who's constantly suggesting ideas, encouraging participation, recognizing accomplishment and otherwise coaching like a rockstar editor. But he's not a professional editor, he's a passionate amateur. And as a professional editor, I stand in awe.

A passionate amateur almost always beats a bored professional

In the endless debate about the relative merits of amateurs vs. professionals in a world the two have equal access to the tools of production, I think people miss a key point:

Amateurs self-select for the job. Professionals are selected. For most jobs, volunteers beat draftees.

No matter how much you love your job, you will eventually end up doing something that feels like work--something that you have to do because your boss asked you to or because the market requires it. At that point, your professional skills may be negated by your lack of authentic interest.

But amateurs are by definition volunteers. They choose to spend their time on what they do, and they go exactly where their passions, interests, knowledge and personality takes them--no further. If they lose interest they move on and are replaced by someone bursting with fresh energy. Self-selection ensures engagement.

To me that's the difference between amateur and professional content: the first may not be polished, but it's driven by the sort of intense interest that cannot be faked. The second may be better written, spelled more correctly and otherwise competently produced, but all too often it has the arms-length perspective of a drive-by.

This is one of the problems with professional journalism: journalists go where the story is, and every day brings a new story. Journalistic skills are portable, but deep domain skills are not. Meanwhile, the amateur lives one story, their own. They make lack journalistic skills, but if you're interested in their world, there's no better guide than a native.

These days I find that more and more of what I read is created by amateurs (or at least amateur writers) talking about what they're most interested in, whether it's Spore walkthroughs or robotics tutorials.

I'll take a passionate amateur over a bored professional any day.

Barnes & Noble's Steve Riggio on Blockbusters

From a terrific New York Magazine feature on the future of the book industry, this tidbit from Barnes & Noble CEO Steve Riggio: “We buy every title published—our business is a long-tail business—less than 5 percent is from bestsellers.”