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^

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2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991

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:


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


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.”


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

“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…


Consumers are not unique and they all want the same hits!


Even unique consumers

have limited time


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? 35 million

downloads in

less than 2

months

You already know this one


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 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

” Want to hear something

weird? Always.”

https://www.youtube.com/watch?v=oLvB_ybcKt0

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

We no longer choose

– we pick Barry Schwartz , Author

The Paradox of Choice

Somebody is making

money of the long tail

#2 Social media

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


Aim for the short head

To be continued…

the 10 rules of the short head / dld tel-aviv 2014

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