The 10 rules of the short head / DLD Tel-Aviv 2014
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Transcript of The 10 rules of the short head / DLD Tel-Aviv 2014
The 10 rules of
the short head
I don’t think it’s realistic to try and topple ‘Titanic’ off its perch
Rank Title Studio Worldwide Year^
1 Avatar Fox $2,782.3 2009^
2 Titanic Par. $2,186.8 1997^
3 Marvel's The Avengers BV $1,518.6 2012
4 Harry Potter and the Deathly Hallows Part 2 WB $1,341.5 2011
5 Iron Man 3 BV $1,215.4 2013
6 Transformers: Dark of the Moon P/DW $1,123.8 2011
7 The Lord of the Rings: The Return of the King NL $1,119.9 2003^
8 Skyfall Sony $1,108.6 2012
9 The Dark Knight Rises WB $1,084.4 2012
10 Frozen BV $1,072.4 2013
11 Pirates of the Caribbean: Dead Man's Chest BV $1,066.2 2006
12 Toy Story 3 BV $1,063.2 2010
13 Pirates of the Caribbean: On Stranger Tides BV $1,045.7 2011
14 Jurassic Park Uni. $1,029.2 1993^
15 Star Wars: Episode I - The Phantom Menace Fox $1,027.0 1999^
16 Alice in Wonderland (2010) BV $1,025.5 2010
17 The Hobbit: An Unexpected Journey WB $1,017.0 2012
18 The Dark Knight WB $1,004.6 2008^
Rank Title Studio Worldwide Year^
1 Avatar Fox $2,782.3 2009^
2 Titanic Par. $2,186.8 1997^
3 Marvel's The Avengers BV $1,518.6 2012
4 Harry Potter and the Deathly Hallows Part 2 WB $1,341.5 2011
5 Iron Man 3 BV $1,215.4 2013
6 Transformers: Dark of the Moon P/DW $1,123.8 2011
7 The Lord of the Rings: The Return of the King NL $1,119.9 2003^
8 Skyfall Sony $1,108.6 2012
9 The Dark Knight Rises WB $1,084.4 2012
10 Frozen BV $1,072.4 2013
11 Pirates of the Caribbean: Dead Man's Chest BV $1,066.2 2006
12 Toy Story 3 BV $1,063.2 2010
13 Pirates of the Caribbean: On Stranger Tides BV $1,045.7 2011
14 Jurassic Park Uni. $1,029.2 1993^
15 Star Wars: Episode I - The Phantom Menace Fox $1,027.0 1999^
16 Alice in Wonderland (2010) BV $1,025.5 2010
17 The Hobbit: An Unexpected Journey WB $1,017.0 2012
18 The Dark Knight WB $1,004.6 2008^
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The #1 rule of the Short Head :
Hits are now Mega-hits
“our culture and economy is
increasingly shifting away from
a focus on a relatively small
number of “hits” (mainstream
products and markets) at the
head of the demand curve
and toward a huge number of
niches in the tail“
When consumers are offered
infinite choice, the true shape
of demand is revealed. And it
turns out to be less hit-centric
than we thought. People
gravitate towards niches
because they satisfy narrow
interests better, and in one
aspect of our life or another
we all have some narrow
interest
As the costs of production and
distribution fall, especially
online, there is now less need
to lump products and
consumers into one-size-fits-
all containers
“our culture and economy is
increasingly shifting towards
a focus on a relatively small
number of “hits” (mainstream
products and markets) at the
head of the demand curve
and away from a huge
number of niches in the tail“
When consumers are offered
infinite choice, the true shape
of demand is revealed. And it
turns out to be more hit-
centric than we thought.
People don’t gravitate towards
niches because they satisfy
narrow interests better, and in
one aspect of our life or
another we all have some
narrow interest. No we don’t!
As the costs of production and
distribution fall, especially
online, there is now less need
to lump products and
consumers into one-size-fits-
all containers. There still is!
The #2 rule of the Short Head :
The long tail is dead
The #2 rule of the Short Head:
The long tail is dead
1906
Pareto efficiency
To me, the 80-20 rule is dead Tyler Smith, Niche Retail
Tyler Smith, Niche Retail
Every one of the 1 million
tracks in iTunes had sold
at least once
So what?
the top 10% songs gets 86% of streams
2.7% of Amazon’s titles produce 75% of its revenues
the top 20% of movies increased from 86% in 2000 to 90% in 2005
10% of the product on iTunes accounts for 90% of the store’s total sales
1.1% of the tracks on iTunes accounts for 86% of the store’s total sales
The #3 rule of the Short Head:
Welcome to the 10/90 principle
The short head of Movies
You’re at the point
right now where a
studio would rather
invest $250 million in
one film for a real shot
at the brass ring, than
make a whole bunch
of really interesting,
deeply personal —
and even maybe
historical — projects
that may get lost in the
shuffle because there’s
only 24 hours”.
The short head of Music
Industry has a lot to do with
things… The industry is tough,
especially for a band like us, a
rock band right now. We’re not
bitter about it or anything like,
“Fuck the music industry”,
that’s the last thing we’re
thinking. We’re all continuing
to do music
“The music industry is a microcosm of what is happening
in the U.S. economy at large. We are increasingly
becoming a “winner-take-all economy,” a phenomenon
that the music industry has long experienced.... The
lucky and the talented – and it is often hard to tell the
difference – have been doing better and better, while the
vast majority has struggled to keep up.
These same forces are affecting the music industry.
Indeed, the music industry is an extreme
example of a “super star economy,” in
which a small number of artists take
home the lion’s share of income.”
The #4 rule of the Short Head:
If there is a long tail we might find
it… but that is about it
The short head of Fashion
500,000 Designs submitted
5,000 Printed
99%
“For t-shirts I think we’re probably still
close to that 20% of the shirt produces
80% of the revenue... Our business
is certainly driven by hits…
That being said, we still have a nice
benefit from having a big catalog to
take advantage of the long tail as well…
Why?
The #5 rule of the Short Head:
Consumers are not unique and they all want the same hits!
The #6 rule of the Short Head:
Even unique consumers
have limited time
The #7 rule of the Short Head:
For retailers, dealing
with thousands of
designers does require a
lot of resources
To me, the 80-20 rule is dead Tyler Smith, Niche Retail
The short head of mobile Apps
More than 1M Apps,
300K developers, revenues of 10B$ a year on App-store alone
Apps downloads distribution
Most Apps (~750,000) don’t reach 1,000 downloads!
Apps downloads distribution
4.5% of the Apps generate 86% of the revenues
0.1% generate more than 50% of the revenues
“Apple App Store:
Overpopulated with Apps
Nobody Uses”
, Jun 2009
40% of Apps earned less than 100$ per
month from ads, another 30% earned
more than 100$ but less than 500$ per
month. 2% earned more than 20,000$
, Sep 2012
Less than 0.01 Percent of
Consumer Mobile Apps Will Be
Considered a Financial Success
by Their Developers
, Sep 2012
But these lucky ones will rock!
Why?
Why? 35 million
downloads in
less than 2
months
You already know this one
Why?
The #8 rule of the Short Head:
Everybody can become
short head winners. Not just the big studios or those
who have done it before
But…
Six weeks ago, we
released this game
and it has been an
incredible and wild
ride since
Dan Porter, OMGPOP (Draw something)
The ride got wilder…
The #9 rule of the Short Head:
the short head usually
doesn’t last long…
enjoy it while it is there
Why doesn’t the long
tail work for Apps?
The average person installs 25 apps
(including a flashlight) . How do you
choose 25 out of a million?
Song Pop is one of the
most fun Facebook
games I’ve played in a
while
Discovery problems, huge variety
and viral elements that boost word of
mouth accelerate the short head
So why aren't we special?
2.5 main reasons
Reason #1: US!
Reason #2: social media
”No problem there.
Conformity is an
obsession with me”
Social proof
positive social influence increased the
likelihood of positive ratings by 32%
and created accumulating positive
herding that increased final ratings by
25% on average
#1.5 the long tail itself
The #2 rule of the Short Head:
The long tail is dead
We no longer choose
– we pick Barry Schwartz , Author
The Paradox of Choice
Somebody is making
money of the long tail
#2 Social media
1962
Diffusion of innovations
The result
We see the same movies
Buy the same
t-shirts
The same
gadgets
Read the
same books
Watch the same clips
This is how long it took them to reach 50 million users
We adopt faster
Much faster
The #10 rule of the Short Head:
Aim for the short head
To be continued…