The fat end of the long tail

In my observation about NetFlix as a purveyer of long tail media, I hinted at all of the other ways that online marketers are prospering with this new business opportunity, made possible by word-of-mouth, suggestive selling and virtual — instead of real — merchandise inventories.

I’ve since realized that so much of marketing technology can be heaped under this category that I need to add it as a tag, along with my intentionally general tags of direct response, database marketing, etc.

True, the term long tail has more than a whiff of a meme ready for replacement, much as how push technology in the early 1990’s crystallized into RSS, and how the overworked online communities, the other buzz of the 90’s, turned into what we’re now calling online social networks.

Regardless of what the phrase long tail becomes, it certainly has legs (why am I thinking of a lizard?). This Google Trends graph shows that in terms of searches and news coverage, it also has a fat end.

The Kevin Smith DVD commentary that will change the film world forever

In a prior post I had mused that podcasts are disruptive of established business models, but not yet an economically viable alternative to them. Since then, I have watched a favorite podcast go more mainstream. But don’t get your hopes up. This move to a better neighborhood, in terms of legitimacy and distribution, in no way guarantees a huge financial payback for its producers or the podcast advertisers supporting it. With this news, which I will get to in a moment, I was still waiting for a true breakthrough — something that will spell real, hard cash for the podcaster, in a way that cannot be ignored or discounted.

Then I learned of an ingenious way that Kevin Smith, the writer, director and co-star of the cult movie hit Clerks and its soon-to-be-released sequel, Clerks II, has found to turn a podcast into heavy incremental box office sales.

First, let me tell you about that first development. It’s the move of Filmspotting (formerly Cinecast), the web’s best film review podcast, to WBEZ Chicago Public Radio. Other star programming from WBEZ, such as This American Life, has already gone from a radio broadcast to a streaming audio product, sold through and iTunes. It appears that Filmspotting will be taking a reverse path: I’m guessing it will gradually go from a free audio product to a radio broadcast and perhaps, a podcast only available by subscription through and iTunes.

Filmspotting has sponsors now, primarily the Honda Fit and Peerflix. What will happen to them as Filmspotting goes Public (with a capital P) is just another question I can’t answer. Can anyone comment with more information?

The one aspect I can speak to with a reasonable level of confidence is this. As much as I respect and enjoy the programming of Public Radio, I know it is not the path to riches, either for its producers or its sponsors. As I’ve suggested earlier, though, the big wins of mass media exposure, and the hefty rates that advertisers will pay to achieve these wins, may simply be a thing of the past.

But wait. Perhaps the riches won through podcasting will come from skillful integration with other media. Which brings me back to Kevin “Potty-mouth” Smith. Okay, that’s my nickname for him, but I introduce it with this warning: His movies can be extremely vulgar and prurient. Like John Waters before him, he pushes boundaries of taste and subject matter, and I’m sure Clerks II will be no exception.

This film, which received a strong positive reaction from the audience attending its midnight showing at this year’s Cannes Film Festival, has two big things going for it: A built-in cult following that every film franchise needs, and a creator who has proved he can still surprise and entertain. For these reasons the film is almost certainly going to do well when it opens in theaters. What’s more, I suspect many fans of the original will come back for a second or third viewing. Did I say suspect? No, I know they’ll be back, consuming even more overpriced concessions and generating even more positive buzz and cash for its distributors.

Clerks II will be helped significantly by a brilliant interactive ploy.

A commentary by Mr. Smith and others close to the production will be produced in the standard DVD audio commentary format. By that I mean, it will run as long as the film, and provide real-time, behind-the-scenes color commentary. But instead of fans waiting for the DVD to come out to enjoy this narrative, they will be able download it as a podcast from iTunes, just in time for the film’s theatrical release. I can’t imagine there will be a cost to this download, but that’s not the point.

The message to fans will be: Enjoy Clerks II the first time as you normally would, then return to the theaters with your iPod or other MP3 player, for a second viewing and a new perspective.

I love two things about this tactic. It is both measurable and viral. Theater owners will be able to visually scan their audiences, and know exactly who has come back for the commentary. White iPod earbuds are hard to miss. Those earbuds are also the main driver of the viral aspect of this tactic.

Let’s say I’m in the audience to see the film. If I see people listening to the commentary and enjoying the theatrical experience just as much – or more — as I am (and, I’m sure, laughing at things that don’t sync up with the film’s laugh lines, because of the podcast’s banter), I am going to find out how I can become a member of the initiated. Yes, I too will seriously consider coming back for a new way to enjoy the film. What’s most exciting is I’ll consider doing this even if I’m only a so-so fan, which is precisely what I am, as a matter of fact.

And what was spent for this surefire sales driver? Almost nothing. Which, not surprisingly, was exactly the production budget of the original Clerks — that audacious and obscene raspberry by Mr. Smith directed at the Hollywood status quo.

More evidence for the power of the long tail

A few days ago my wife and I were in a restaurant, commiserating with a friend about her difficulties as a film fan on a mission. She told us she has been taking in as many of the films of Woody Allen as she can rent. It hasn’t been easy. She has been forced to rely on the shrinking inventory of the neighborhood video store, Video Adventures. Not surprisingly, the store just announced it will be going out of business next month.

Alas, our friend has a lot of Woody Allen yet to cover. My wife and I almost simultaneously blurted out the obvious solution: Netflix.

Netflix has an extensive film selection, excellent search capabilities and the brilliant ability to build and share your film wish lists. It’s the perfect tool for a film completist such as our friend.

Allowing customers to rent videos from home, without the threat of late fees, is an obvious point in the favor of Netflix over the brick-and-mortar video store business model. But the other major reason Netflix has become such a marketing force, and a threat to the video store, is its ability to exploit the long tail phenomenon.

If the term long tail is new to you, I recommend you read Wired editor Chris Anderson’s article, if only to learn the origin of the name (here’s a hint: think of the slim, wedge-shaped outer region of a graphic showing gross sales numbers along the vertical axis and the amount of variety of titles along the horizontal).

The significance for marketers of the long tail is described well by Anderson below:

[The emergence of] unlimited selection is revealing truths about what consumers want and how they want to get it in service after service … People are going deep into the catalog, down the long, long list of available titles, far past what’s available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).

When I first read that article I was skeptical. After all, Hollywood has done a great job of dictating to the masses what they should be viewing. And true “video adventurers” like our friend are rare.

Are we truly willing to take a chance? When given the opportunity to scratch an itch for more movies like those that we’ve enjoyed, even if they are obscure and heretofore unknown, is the typical consumer really going to risk disappointment?

Now I have my answer.

In his latest column, New York Times technology writer David Leonhardt explains that Netflix stocks approximately “60,000 movies, television shows and how-to videos that are available on DVD (and that aren’t pornography).” He continues below:

Just as important … Netflix lets users rate movies on a one- to five-star scale and make online recommendations to their friends.

The company’s servers also sift through the one billion ratings in its system to tell you which movies that you might like, based on which ones you have already liked. [Something described in a blog entry last month.]

The result is a vast movie meritocracy that gives a film a second or third life simply because — get this — it’s good. [Here’s a]  brainteaser I have been giving my friends since I visited Netflix in Silicon Valley last month. Out of the 60,000 titles in Netflix’s inventory, I ask, how many do you think are rented at least once on a typical day?

The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?

Well, the actual answer is 35,000 to 40,000. That’s right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer.

I’ve personally experienced the long tail in music. My musical diet is more varied today than it has ever been, all thanks to access to a nearly unlimited variety of musical genres and artists in digital format. It’s exciting to read that the same exploration is taking place by consumers in the film industry, with the same predictable disruptive effects.

Although I hate to see neighborhood businesses fold, with the resulting ripple effect on local economies, in this case that is outweighed by the fact that I’m a fan of many of those films found in the outer reaches of the long tail (and not found in any video store).

So I find this latest news comforting. Less so, the news that our friend actually enjoyed Woody Allen’s Celebrity.

Monetizing podcasts

Last night I had dinner with a couple of friends, and for the first time found myself trading the names of favorite podcasts. I was surprised it took so long.

After all, they are free, they’re convenient, and the variety of types is growing by the day.

I suspect we will someday soon be discussing podcasts — what happened this week on one, when that one will be releasing new episodes, etc. — the same way we discuss television shows around the water cooler today.

But we pay for television, either indirectly, through the commercials, or directly, through our cable bill. The broadcast television model is certainly on shaky grounds, but somehow I think a visual medium is easier to monetize than an aural one. I could be all wet, but I somehow think podcasts are going to be very tough to turn profitable.

Perhaps the low production costs will allow advertisers to consider the occasional ad break, or full-blown sponsorship, too big of a bargain to pass up. But whereas other online media have very track-able ways to measure results, how will we know if a podcast is moving the needle for those advertisers that support them?

Perhaps there will someday be a podcast solution that is similar to the Brightcove streaming video player, and its ability to enrich ads with more information and relevance.