Because of the Long-Tail Influence of the Internet, We’ve Suddenly Found Ourselves at Brain Technologies Busier Than We Ever Dreamed We’d Be Running the Bookstore We’ve Always Wanted to Own

I’ve just spent a week analyzing the digital entertainment revolution for a client who is planning the launch of yet another Internet video delivery service. What I concluded about his product prospects is, of course, proprietary. But I can share some thoughts about the “Internet tv” and similar phenomena and what I suspect some of the most important outcomes might be.

If you’ve been busy doing other things—like attempting to live a normal life and forgoing the temptation to buy another electronic widget or subscribe to another miracle 42-services-in-one combo offer from your friendly telco, cable or satellite broadband digital signal delivery service—you may not be all that clear about what I’m talking about. But I doubt that you’ve escaped its influence.

I’m talking about the latest dot.com phenomenon.

This one has taken hold largely in the past two years. It centers on the burgeoning abilities of all the great data-carrying networks being put in place to accommodate a bandwidth hog called video and deliver it cheaply and with increasing reliability to the PC, the TV, the portable digital media player, the personal digital assistant and, for all I know, the back of your own eyeballs. (Just kidding. Not really, not yet).

What is so exciting and inviting to the entrepreneur like my client is what has been called “the long tail” aspect of the Internet.

Chris Anderson, the editor-in-chief of Wired Magazine, coined that term (or, more correctly, borrowed it from statisticians), less than two years ago. In an article in the October, 2004, issue of the magazine (see below), he forecast the emergence of a new digital entertainment and information economy much different from the mass media marketplace that dominated for the entire 20th Century. The dot.com-2 movement (that’s my term for it, not his), he predicted, was going to make unlimited selection more the norm than an exception. Even if only a relative few of the world’s billions wanted something bad enough to pay for it and went looking for it on the Internet, or didn’t go looking for it but were hunted down and told it could be delivered on the Internet, then control of entertainment content would be wrestled away from the mass media giants and put in the hands of a myriad of new entrepreneurs looking to service niche markets that only the Internet can turn up.

And that kind of activity has been happening, with a vengeance. To cite a mere handful of examples:
—YouTube.com allows anyone to post videos for free. It is already claiming 35 million views daily, with 35,000 new videos added by users every day.
—MySpace.com allows its users to set up a free “profile page” for themselves allowing access to, among other things, videos. At first, the service was used mainly by youngsters. Already, trafficking on the “long tail” of the Internet, MySpace is increasingly favored by businesses seeking free publicity.
—blinkx TV can take a subject from a user, research a million hours of video and TV and create a unique channel that can be viewed by this single user in an uninterrupted stream.
—Brightcove Inc. allows any video producer to distribute his/her wares to any other Web site that is willing to market them. Then the producer and the selling Web site and Brightcover all share in advertising revenues or sales generated.

My-oh-my. And it’s not just video that is being trafficked on the Internet’s long tail. Take books, for example. Regular readers of this blog are already aware that one of the things we do in here at Brain Technologies is sell books, new and used. At first, we were just dabbling, largely out of our love for books. But the enterprise has just grown and grown.

There are a gazillion used books in America, many of them headed for a landfill. But if you know where to look for them and how to buy them and how to use the Internet to sell them, you can work the long tail of the Net to establish a thriving business.

Just this past weekend, among dozens of sales, our BTC Brain Books To Go and supplementary services sold a $38.50 book published in 1964 to a buyer in Ohio, a $26.50 book published in 1991 to a buyer in Pennsylvania, a $72.95 book published in 1993 to a buyer in New York, a $19.95 book published in 1972 to a buyer in Italy and a $93.95 book published in 1973 to a buyer in Brazil. Nearly all these books were library discards; most of them purchased (by us) for a dollar or less, often much less. What makes all this profitable (and great fun!) is the long tail reach of the Internet. Otherwise we’d never have know there was, for example, a potential buyer for our book, Mechanics of solids: with applications to thin bodies, in Sao Jose dos Campos, SP, Brazil, much less have known how to connect with and then do a successful transaction with him.

So both as an analyst of the long tail phenomenon’s entrepreneurial possibilities and as one of those entrepreneurs, what are some of my suspicions about this unruly Wild West environment that is making the sale and delivery of entertainment and informational products and services a whole new ballgame? Here’s a few thoughts:

• This new phenomenon isn’t the threat to make dinosaurs of the major mass media companies that some observers have forecast. The longstanding media giants are working as hard as anyone to take advantage of the Net’s long-tail revolution of their industries.
• Many of the hopeful new entries into the broadband next-generation, at-home entertainment revolution aren’t going to succeed. There is likely to be more digitalized video available on the Net than there is going to be viewers willing to look at it, much less pay something for it.
• The lengthy periods of relatively unchanged technologies like those that created the “pitcher show” industry will never be experienced again. Planned obsolescence is being surmounted by runaway unplanned obsolescence.
• The winners long-term are likely to be those who do the best job of managing the phenomenon once they identify salable content and services, not the whizbangs who were first to discover a market for old Cisco Kid movies or sailing videos or, to cite a market closer to home, library book discards. Since getting into the used book sales business using Amazon.com’s prepackaged programs, at Brain Technologies, we’ve felt the need to commission our own proprietary book selling management software. Why? One reason is that the price on nearly every one of the thousands of books in our inventory needs to be changed every two weeks at minimum. In the turbulent, long-tailed environment of the Net, the amount of change to be managed is infinitely varied. Of course, that’s what creates the long tail effect to begin with.

To read Chris Anderson’s article in Wired, go here: The Long Tail

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