It is undeniable that business organizations today operate in a dynamic and volatile business environment. Firstly, the rise of emerging markets spear headed by the BRIC economies which, while providing learning opportunities and new resources, comes along with the threats of new competitors and a rapidly changing business environment that puts a business’ flexibility and adaption to test. Secondly, the dot-com boom has turned the tables for producers and businesses. Traditional business models are being threatened by new business models, such as the Long Tail. Every consumer can now be a producer. There is no longer gate keeping to content production and circulation. For traditional media producers especially, the internet represents an on-going threat to their business model.
For a long time, big media firms, such as the TNMCs, have enjoyed a monopoly over consumers’ taste. Due to limited physical shelf space and airtime, consumers’ choices are limited to the ones chosen by TNMCS to produce and market. The Twilight Saga: Eclipse is ranked 37th in top 100 box office hits, despite the extensive criticism it has received in the reviews. Why? Because consumers do not have a choice. You check the movie listing in your local theater and you only have a few movies to choose from. You look at the movie timings and there’s a Twilight movie being screened every other hour. You listen to the radio and your local DJs are talking about the movie and the twilight cast. You walk past a mall and the trailer is showing. You’re at the bus stop, and a bus with the movie poster blown up drives past you. The movie becomes ingrained into you – you’ll end up watching it, even if you have completely no interest in vampires. This is TNMCs and their push demand strategy and manipulation of consumer tastes.
But enter the internet. Along with Amazon.com, a thousand websites are digging deeper into the long tail. And consumers are buying it. We know how the long tail works for the internet (there is infinite space, demand is not limited to geographical standards) but why does it work best for the internet? I am reminded of the Blue Ocean Strategy (by W. Chan Kim and Renée Mauborgne) concept, whereby businesses should look to create uncontested market space, make the competition irrelevant, and create and capture new demand. Firstly, TNMCs are very powerful. They are able to exercise synergies over various industries and media channels, but the internet is a space that has not been dominated by them. Secondly, companies like Amazon and Rhapsody are not looking to compete with TNMCs by selling more of what they sell, they are looking to sell what TNMCs do not sell. This creates an entirely new market space and makes the competition irrelevant. Lastly, they are not looking to meet current demands, they use the Long Tail to increase supply – and somewhere – the supply curve intersects with cosumer’s unmet demands, or demands that they have but are unknown to them.
What does this mean to TNMCs? To me, the effect of the Long Tail is disruptive innovation (by Clayton Christensen) to traditional business models. Media products are available to consumers on a much wider scale at a much lower cost. But the bigger problem for TNMCs, is that they will no longer enjoy a monopoly over consumer’s taste. An independent musician may produce a music that was not picked up by a major recording label, release on the internet, and end up as a music phenomenon because internet consumers listened to his music, liked it, and recommended it. One of the benefits for products on the long tail is that, despite how long the long tail is, every product has a fair chance. If your music is appealing enough, consumer recommendations can go viral and you can move up the tail, from a top 40,000 hit to a top 1000 hit.
TNMCs have to come to terms that their consumers are now exposed to a much larger variety of media products, and their taste may develop from mainstream to indie/obscure overtime. What TNMCs can do to benefit from the long tail is to collaborate with businesses which operate on the long tail model, and stay vigilant to consumer’s preferences, and adopt their media products to it. When a top 40,000 hit becomes a top 1000 hit, that’s where the TNMC comes in. While TNMCs will probably not be able to enjoy the profits of “misses”, they can continue to strive by being vigilant to media products that move up the long tail.
Lastly, social media has an interesting relationship with the long tail. Social media represents user generated content and the removal of barriers to entry. As I mentioned in class, Youtube is an example of user generated content, whereby anyone can be a content producer, and while the tail never ends, content that appeals to enough people gets a breakthrough. Examples would be Justin Bieber and David Choi, which are renowned musicians which started off by posting their music on youtube. Lastly, social media represents power to the consumers – power in terms of being free to choose what you want to see, what content you want to create, and honest reviews. Social media should strive to be independent in order for the long tail to continue. Out of the 6 big TNMCS, 4 have already tried to buy over Facebook. What if one day, our social media platforms are owned by TNMCs? Would that put an end to this power shift that we’re finally enjoying?
