Whoa! The changes all around us! – The new ‘economy of abundance.’

This one needs a subtitle: Response to reading The Long Tail by Chris Anderson, editor of Wired.

My hiatus from my personal ‘My take on what is going on‘ will have to continue a little while. I have been floored by Chris Anderson’s work in The Long Tail, Why the Future of Business Is Selling Less of More.

An understated title if I ever saw one. You come in expecting an effective book on how digital technology is enabling the rapid expansion of lots of small businesses – niche markets – entrepreneurial opportunities (right up my alley) – and within the first two pages see instead how it is our entire culture that is being upended by seismic shifts.

The book is not just about business – it is about the overturning of our entire pop idol, blockbuster’s-are-it, winning-is-everything-second-place-is-for-losers culture.

If I was cheering with the Cluetrain people, I was doing cartwheels in the stands with Anderson. The things he says that are ending in this ‘end of an era’ are things a lot of us hate and have hated for years.

Our culture being a massive popularity contest. Pre-manufactured ‘hits.’ Hollywood-created ‘celebrities.’ The … compliant… mass market.’ The ‘economics of scarcity’ (scarce in that it was hard to get any attention to the little guy). The media being ‘obsessed with what’s hot and what’s not.’

Look at these blazing quotes from the book:

No surprise that hits have become the lens through which we observe our own culture…We define our age by our celebrities and mass-market products…

Each year network TV loses more of its audience to hundreds of niche cable channels.

What we thought was the rising tide of common culture actually turned out to be less about the triumph of Hollywood talent and more to do with the sheepherding effect of broadcast distribution.

The hits now compete with an infinite number of niche markets, of any size. And consumers are increasingly favoring the one with the most choice.

The era of one-size-fits-all is ending, and in its place is something new, a market of multitudes.

The shattering of the mainstream into a zillion different cultural shards is something that upsets traditional media and entertainment to no end…. the audience is shifting to something else, a muddy and indistinct proliferation of … Well, we don’t have a good term for such non-hits.

The new niche market is not replacing the traditional market of hits, just sharing the stage with it for the first time.

The article (from which the book later came – my comment) originated as an analysis of the new economics of the entertainment and media industries… what people intuitively grasped was that new efficiencies in distribution, manufacturing, and marketing were changing the definition of what was commercially viable across the board…

…it’s clear that the story of the Long Tail is really about the economics of abundance – what happens when the bottlenecks that stand been supply and demand in our culture start to disappear…

And the above earth-shaking observations were just in the introduction!

Anderson goes on through the book to prove his point in amazing detail and with the analytical precision expected from a Harvard Business School prof or a cultural anthropologist with 5 advanced degrees. It is extremely thorough, detailed and tested.

It is no wonder the book gets gushing reviews from the CEO’s of Google, Netflix, RealNetworks, Yahoo, and a host of new culture authors as well.

I will be posting more than once on this book because I feel it is so revolutionary. It puts the finger so well on things going on that many of us have seen as revolutionary for some time – but could not quantify as well as Anderson does.

Let me just comment on a few areas first and the rest can come in successive posts on later days.

First of all, I am in the newspaper business. I grew up with newspapers and believe in them – as a huge force for popular good and for gaining a sense of direction in daily life. I am especially a fan of local daily newspapers, and work for one now.

Newspapers, however, as Anderson says, have to reinvent themselves quickly. The older ways of disseminating information, daily wisdom and the news of a local marketplace do not work nearly as well as they used to. Anderson tells why. It has to do with the 80/20 rule (80 percent of the people are most interested in only 20% of the content you could put out). So you go for the numbers. The ‘hits’.

Truth be told, if you get 30,000 people, they are not just interested in 100 things each day. Not even 100,000 things. The aggregate of their interests would be in the millions or even hundreds of millions. They want access to more than the 20%.

There is no way you can get that all into newsprint and all would read it. You couldn’t even carry it. And if you could, you couldn’t find anything in it.

But digitally, you can do all those things. That is exactly the philosophy of a Google or a Yahoo. Index it all. Search it all. Deliver a million millions of permutations of user information sets to a billion people.

And it is working. That is what is so earth-shaking. The result – people are so busy gulping up all this long-awaited information (according to Anderson) that many simply do not have the time to go back to the older, filtered information sets of the traditional media.

As an entrepreneur, I love that. It gives wings to the little guy, the entrepreneur who wants to reach a special market with a very special product. In previous days it would have been very hard, because it was expensive and difficult to broadcast a message for a very select market (part of the long tail statistically).

For example, if you had been working hard on a new breed of miniature apple trees, how would you find a place to sell them? Sure, you could go to distributors, but most of them have their own brands of trees.

You have to go direct to the public to compete. How many people out there in suburbia are interested in mini-orchards in their back yards? Very few. Is the idea viable? Absolutely – in fact the benefits of growing your own apples to health, happiness and quality of life can be tremendous. But who would ever hear of it with traditional media?

Because of the need for massive interest scale, most traditional media, especially television and magazines, could only effectively promote the big ‘hits’ in our culture. The message that would go out would not be: grow apples in your own back yard and here is how; but rather: get in the car and go to XYZ fast food restaurant and get their apple dessert in seconds – piping hot and soooo good!

So not only does the product get lost, but the idea behind it never gets shared. The notion – terrific as it is – of growing your own apples (and of teaching your kids how to prune, nurture and cultivate a fruit-bearing orchard) would not get much play. Our society, as a result, would end up with a mass-culture idea of: “If you want piping hot apple dessert – here is how to get it. Get in the car and …”

Sound like anything you might noticed about modern America?

Now here is where I have always loved the daily papers. A good local paper WOULD write a feature story – or several – about the guy who comes out with the new strain of miniature fruit trees. He or she would be a local hero to readers. He would receive local attention and all twenty local back-yard orchard people would buy from him. The article might even help convert another half dozen families to the idea. At least the VALUES of the idea would get coverage in that one locality.

Hurrah for the local paper. However, that still does not give the entrepreneur enough business, by a long shot, to survive and keep doing what he needs to do. And the saddest part: there are hundreds, thousands of great ideas in the smallest of local communities. Most of them never get beyond the pipe dream stage because those people who would otherwise go after them know they can’t market them to a mass market and give up before they ever try.

I believe that local newspaper companies have a tremendous opportunity to combine their ability to champion the local entrepreneur (in the long tail world) with an ability to help him or her get to market – even a wider one. But it is something that has to be done in a new way – something not seen much before in the newspaper world.

I’ll write more about that in the next post.

I have so much more to say and my thoughts are still converging.

As far as the ‘hit’ and manufactured celebrity culture goes, I for one will be glad to see it go.

Don’t let the door hit ya.

4 thoughts on “Whoa! The changes all around us! – The new ‘economy of abundance.’

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Chris Tackett

  2. Can’t wait to read more Alan. I’ll confess, the Anderson book was a bit underwhelming for me. At some point, I felt like he was repeatedly stating the obvious, and was it really a new viewpoint?

    I look forward to being convinced.

  3. Pingback: Newspaper of the Future « The Business of Life - a blog by Alan Eason

Leave a Reply