Why Hits Have Less Value in A Networked World

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Information about Why Hits Have Less Value in A Networked World

Published on June 26, 2008

Author: davidcushman

Source: slideshare.net

Description

Understanding why 'hits' - from music to best-selling books, magazines and anything else have less value in the emerging networked world - and where that value has shifted to.

Why hits are worth less in a networked world David Cushman FasterFuture.blogspot.com

Three laws describe how value grows and is distributed in networks David Cushman FasterFuture.blogspot.com

Sarnoff’s Law – the red line The value of a broadcast network is proportional to the number of viewers/listeners: Eg TV, Radio, Cinema David Cushman FasterFuture.blogspot.com

The value of a broadcast network is proportional to the number of viewers/listeners: Eg TV, Radio, Cinema

Metcalfe’s Law: the yellow line The value of a network is proportional to the square of the number of users of the system ( n² growth): Fax machines, telephones, one-to-one communications. David Cushman FasterFuture.blogspot.com

The value of a network is proportional to the square of the number of users of the system ( n² growth): Fax machines, telephones, one-to-one communications.

Reed’s Law: the green line The value of large networks , particularly social networks , grows exponentially with the size of the network.(2n) Because: The number of possible sub-groups of network participants grows much more rapidly than either the number of participants, ‘ N’ (Sarnoff’s Law) , or the number of possible pair connections ( Metcalfe's law ) (N squared) David Cushman FasterFuture.blogspot.com

The value of large networks , particularly social networks , grows exponentially with the size of the network.(2n)

Because: The number of possible sub-groups of network participants grows much more rapidly than either the number of participants, ‘ N’ (Sarnoff’s Law) , or the number of possible pair connections ( Metcalfe's law ) (N squared)

How does this reveal the value of hits in the networked world? David Cushman FasterFuture.blogspot.com

Flip the graphs to find the demand curve … and we discover why the long tail succeeds in the group forming ( Reed’s Law ) world of social networks that IS the internet. David Cushman FasterFuture.blogspot.com

Hits take more of the available value in a broadcast world David Cushman FasterFuture.blogspot.com

Hits worth more in broadcast world Shaded area shows hits account for a greater proportion of the available demand and total value in Sarnoff’s broadcast world and in Metcalfe’s world of one-to-one communications. David Cushman FasterFuture.blogspot.com

Shaded area shows hits account for a greater proportion of the available demand and total value in Sarnoff’s broadcast world and in Metcalfe’s world of one-to-one communications.

Hits are still worth having… but They have less proportional value compared to the overall economics of the networked world. In a broadcast world the hit was where MOST of the value resided The opposite is true in a networked world. Seeking ways to create value in the long tail therefore offers the bigger opportunity David Cushman FasterFuture.blogspot.com

They have less proportional value compared to the overall economics of the networked world.

In a broadcast world the hit was where MOST of the value resided

The opposite is true in a networked world.

Seeking ways to create value in the long tail therefore offers the bigger opportunity

Let me point you at? My Blog: http://fasterfuture.blogspot.com Reed’s Law on Wikipedia http://en.wikipedia.org/wiki/Reed%27s_law White Paper: Reed’s Law and How Multiple Digital Identities Make the Long Tail a Little Longer . http://fasterfuture.blogspot.com/2007/08/reeds-law-and-how-multiple-identities.html My poorly executed graphs were derived from those originally used by David Reed at: http://www.reed.com/gfn/docs/reedslaw.html Inspired by David Reed, Alan Moore, Clay Shirky and anyone who ever joins the conversation David Cushman FasterFuture.blogspot.com

My Blog: http://fasterfuture.blogspot.com

Reed’s Law on Wikipedia http://en.wikipedia.org/wiki/Reed%27s_law

White Paper: Reed’s Law and How Multiple Digital Identities Make the Long Tail a Little Longer . http://fasterfuture.blogspot.com/2007/08/reeds-law-and-how-multiple-identities.html

My poorly executed graphs were derived from those originally used by David Reed at: http://www.reed.com/gfn/docs/reedslaw.html

Inspired by David Reed, Alan Moore, Clay Shirky and anyone who ever joins the conversation

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