January 28, 2008
The high-end of the long tail

You wouldn't think that the story of a million-copy selling DVD is a long tail story - but it is. Straight to DVD releaseas are selling better than ever. Typically B-movie sequels to previous A-movie theatrical releases, according to the article.
The reason we have the old bestseller system in the first place is opportunity cost - bigger hits don't waste seats in theaters or shelves in bookstores. They are simply, per copy, much cheaper to sell. Nowhere is this more pronounced than in movie theaters. Take a look at a randomly picked box office chart and notice that once you go below the top 50 films you start seeing a lot of single digit theater numbers. So the vast american movie market is only able to market 50-100 films at any given time. To 300 million people*. The reason of course is that that the opportunity cost here is higher than anywhere else**. DVDs move the threshold into the thousands of marketable releases. Online DVD sales/rentals move it even further down.
One of the interesting things about the iTunes rental launch was the low number of movies being made available. 1000 movies? Makes no sense if you're digitally distributing to not up that catalog to include everything - but of course if the movie business is used to thinking of 50 movies as a high number, 1000 seems positively astronomical.

* Of course - distances being what they are - it's more like a few hundred small markets than one big market.

** It's interesting by the way, that live performance seems to work on a different system. Perhaps the scarcity of the actual living flesh performers give the also rans a better chance in live performance. The Rolling Stones can't be in town every thursday.

Posted by Claus at January 28, 2008 12:04 PM | TrackBack (0)
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