The 10 rules of the short head
90
The 10 rules of the short head
description
An updated presentation of the short head theory which is kind of the opposite of the long tail theory. The update includes the short head of mobile apps and 2 new rules of the short head. The short head in general - The long tail theory from the early days of the internet (2000+) claimed that “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.” The short head proves otherwise - in the last several years we have moved towards an even smaller number of mega-hits! The present is not selling less of more - it is selling much more of much less! This is the short head - http://www.theshorthead.com/
Transcript of The 10 rules of the short head
The 10 rules of
the short head
I don’t think it’s realistic to try and topple ‘Titanic’ off its perch
I don’t think it’s realistic to try and topple ‘Titanic’ off its perch
James Cameron, Dec 2009
Few days later…
James Cameron Avatar comes out and smashes both records of Titanic
18 movies ever have reached 1 billion dollars until today.
13 of them were released in the last 6 years
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^
Also most of all times weekend opening records are from
the last several years
The #1 rule of the Short Head:
Hits are now Mega-hits
The #2 rule of the Short Head:
The long tail is dead
1906, Italy
The Pareto principal 80% of your revenues come from 20% of your
customers and from 20% of your products…
Pareto efficiency
Focus on the 20% that are
responsible to the 80%
To me, the 80-20 rule is dead Tyler Smith, Niche Retail
The long tail
challenged the
Pareto principal
To me, the 80-20 rule is dead Tyler Smith, Niche Retail
The long tail
challenged the
Pareto principal
The said that the curve has moved
Every one of the 1 million
tracks in iTunes had sold
at least once
For example they said that
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
The #3 rule of the Short Head:
Welcome to the 10/90 principle
The short head of Movies
The big 6 studios are making less films every year
14% of the movies generate 90% of the revenues
In 2002 it was 80%
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
Every Avenue is a pop
punk band from
Marysville, Michigan.
established in 2002.
228,000 likes on Facebook,
Millions of views on YouTube
One of the fastest growing artists in touring. From 11 tour dates they had in 2007, to 140 in 2010
“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”
Few months ago they decided to break up.
This is what has happened to the live music shows
revenues throughout the years …
“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.”
Prof. Alan Krueger
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 T-shirts
500,000 Designs submitted
5,000 Printed 99% long tail dead shirts
20 / 70
0.1 / 1000
“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…”
Josh Abramson, CEO
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
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? 35 million
downloads in
less than 2
months
Why? 35 million
downloads in
less than 2
months
You already know this one
What do they have in common?
Spent 17M$ on Apps
you have never
heard of t before
releasing Draw
something
Released 51 Apps
you have never
heard of before
releasing Angry
Birds
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
Or you can call it Luck
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?
You see what others are downloading
Song Pop is one of the
most fun Facebook
games I’ve played in a
while
And listen to friends
Even if we don’t listen… We hear about it from our friends
Discovery problems, huge variety
and viral elements that boost word of
mouth accelerate the short head
So why aren't we special?
2 main reasons
Reason #1: our nature But that hasn't really changed
”No problem there.
Conformity is an
obsession with me”
Social proof
We assume that the people around us know better
and therefore by imitating what they are
doing/buying/watching/wearing/listening to
we believe that we behave correctly
” Want to hear something
weird? Always.”
How funny is it without the fake laugh?
positive social influence increased the
likelihood of positive ratings by 32%
and created accumulating positive
herding that increased final ratings by
25% on average.
The science magazine, a research of Lev Muchnik, Sinan Aral and Sean J. Taylor
What does it say about the “wisdom of
the crowds” if the crowd is not really a
crowd but a small group of people
who spoke first and a big group of
people that followed and accepted
what the first group said?
2 main reasons
Reason #2: social media This is the big change!
1962, Purdue University
Diffusion of innovations Professor Everett M. Rogers
A theory that explains how innovations
(new stuff) are being spread through
the communication channels over time
and among the members of a social
system
Bass diffusion model Professor Frank Bass
The adoption as a function of external influence such as PR etc (p)
and internal influence meaning word of mouth between those who
have adopted and those who might adopt (q)
How does the diffusion work?
Through interactions between people
once we had several interactions a day
Today we have hunderds …
More interactions > more chances for adoption
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
Or become a long tail loser
How?
To be continued…
