The Long Tail

Another Harvard professor helpfully suggests that we make hits

What is it about Harvard Business School professors and their embrace of the grindingly conventional pitched as fresh contrarianism? The latest is HBS marketing professor John Quelch, who bravely argues for, well, successful products:  Long-Tail Economics? Give Me Blockbusters!

Unlike these HBS professors, I’m actually in the blockbuster industry (Conde Nast editor), and I can confirm that blockbusters are indeed great when you happen to have one. The problem is that neither we nor anyone else can predict what will be a blockbuster or how to create them with any regularity.

So we can’t do much to improve our blockbuster batting average. But what we can do is become less dependent on them. And that’s the point of the Long Tail.

But Quelch thinks we've got it all wrong. Forget spreading your bets and embracing niches. Instead, make blockbusters! Okay. How? Well, he doesn't quite get to that. Instead, Quelch helpfully identifies the "five defining characteristics of blockbusters", all coincidentally starting with "S": [My comments are in brackets]

1. Sheer size. A blockbuster has a transformational impact on a company and an industry, often opening up new markets worldwide. Blockbusters break sales records and exceed expectations. Around 100 pharmaceutical brands exceed $1 billion in annual sales. Procter & Gamble has 23 such brands. [A bit of a tautology, which says blockbusters are, well, blockbusters, but let's move on...]  
2. Speed. It's not just the sales volume; it's the speed of the sales trajectory. Remember that the original blockbuster was a bomb that could destroy an entire city block. Blockbuster brands address pressing consumer needs so well that they often enjoy vertical sales liftoff. Think Viagra. [Huh? Did blockbuster bombs explode faster than other bombs? Can Viagra destroy an entire city block? I'm confused.]
3. Scarcity. A blockbuster brand is often in such high demand that stock-outs and shortages occur in the market. Remember the consumer lines to buy the new iPhone? As imitation is the sincerest form of flattery, the speedy availability of counterfeits is another indicator of popularity. [Except for all the blockbusters that don't exhibit this unusual scarcity behavior, such as Hollywood blockbusters, music blockbusters, drug blockbusters and indeed virtually all blockbusters except for the aforementioned iPhone and a few toys around Christmas. Also, isn't widespread piracy the opposite of scarcity?]
4. Sustainability. A blockbuster brand is not a one hit wonder. It is a gift that keeps on giving. Remember Intel's Pentium chip. Or look at the seven Harry Potter books and five companion movies. Adding DVD and merchandise sales, theme parks, etc., Advertising Age valued the Potter economy at $15 billion. [Except for all the blockbusters that are one-hit wonders, from pop music to the aforementioned drugs. Furthermore, including Intel's Pentium chip in this list is risible: it was the fifth generation of a chip architecture that began with the first personal computers and grew along with the industry. It sold more than the processors before it and less than the processors after it. Does that make every component in a PC a blockbuster, simply because a lot of PCs are sold?] 
5. Sizzle. A blockbuster does not just address an important need. It does so in an exciting and accessible way. Pfizer's Lipitor was not the first cholesterol reducer but superior marketing and sales made Lipitor number one. And in the movie world, think of the magical and memorable special effects in the Star Wars series. [Comparing Lipitor to Star Wars special effects? Priceless. This is what it takes to become a Harvard Business School professor, folks]

It’s like the "Give Peace a Chance" bumper stickers on the old Volvos here in Berkeley. Good advice. If only it were so easy.

[thanks to Robin Koskinen for the tip]

Putting a price on the Cricket Diaspora

One of my more theoretical Long Tail examples was sports which are hits in their place of origin but niches elsewhere, something that applies as well to most college football as it does to the example I chose, cricket. The "Cricket Diaspora", which is millions of people, mostly from current and former Commonwealth countries who now live elsewhere, was a perfect example of how Long Tail tactics of reaching distributed demand could tap new markets.

Now, a couple years later, this is actually turning into a big business. From PaidContent:

"Reliance ADA Group, the Indian telecom and media conglomerate, has bought a 70 percent stake in Willow.tv, the Cricket webcasting site based in Sunnyvale, CA. The price was undisclosed, but according to Rajesh Sawhney, president of Reliance Entertainment, the company will spend about $60 million to $70 million in this acquisition and expansion together, quoted in WSJ.

Willow TV has been around for about five years, and named after the tree from which Cricket bats are made. It was among the first to start live webcasting cricket matches for expatriate audience worldwide, though a big part of its audience is South Asians in U.S. (including me). It charges anywhere from between $10 for a short series to $150 a full cricket tournament, depending on the countries and number of games involved. In 2007-08, the site has streamed most of the major tournaments live, including the Indian Premier League, Australian, South African and English cricket."