Published on April 27, 2014
The 8 rules of the short head
n’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
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
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
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.” Howfunnyisitwithoutthefakelaugh?
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
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
To be continued…
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