The 8 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

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

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 #8 rule of the Short Head:

Aim for the short head

Or become a long tail loser

How?

To be continued…