• Revisiting The Long Tail and Broadband Video

    Way back in the dark ages of March, 2005, I wrote a newsletter entitled, "The Long Tail of Video is About to Get Longer - What Role Will Cable Play?" I thought of it yesterday when I read an article in Multichannel News "Cable Bests Broadcast - Basic Networks Steamroll Into Summer with Lion's Share of Audience." I continue to believe that cable TV provides a lot of lessons for those thinking about broadband video's future.

    First, a quick refresher on the idea of The Long Tail. In October, 2004, Chris Anderson, editor of Wired magazine, wrote an article which later turned into a book, asserting that once physical limitations (e.g. manufacturing, distribution, inventory, etc.) are removed - thereby allowing all products with niche appeal to be readily available to consumers - it turns out that the aggregate sales of these niche products are greater than the few "mass" products which were always available in traditional distribution channels. When this effect is plotted on an XY graph, the line depicting the tiny sales per niche unit extends indefinitely, forming a "long tail."

    The Long Tail was an important contribution in understanding how the world of digital economics works. Anderson cited multiple examples where the Long Tail was evident (e.g. Amazon, Rhapsody, etc.). In my March '05 piece I explained that the Long Tail concept was familiar to anyone in the cable TV business: the traditional "head" content was the broadcasters, the long tail was the constellation of niche-oriented cable TV channels.

    When I wrote the piece, as a group, basic cable TV's total audience had just nudged past the collective audience of the broadcasters for the first time (i.e. The Long Tail effect was becoming evident). While each cable channel's audience was small relative to each broadcaster's, cable's total audience was now greater. It had taken 30+ years for cable audience to reach this point.

    Flash forward 3+ years to the Multichannel article revealing that in May sweeps period, cable's audience share had surged to 60%, compared with 40% for the broadcasters. And it's interesting to note that a key part of cable's May win is due to cable co-opting traditional broadcast programming: in May TNT's airing of NBA playoff games accounted for 12 of the month's top 20 most-watched programs.

    What does all this have to do with broadband video? As I explained back in '05, in reality, broadband distribution is essentially extending the long tail of programming. Broadband allows startups and established players (including cable and broadcast networks!) to utilize newly available broadband infrastructure to reach their audiences. The result is a massive proliferation of new programming and new viewer behaviors, further fragmenting audiences to ever-smaller niches.

    Today's cable channels will eventually be seen as the "mid-tail" with broadband as the hyper-niche long tail. Given their own first-hand experience of the last 30 years, cable operators, cable networks and broadcast networks should all have a pretty clear view of the challenges and opportunities that broadband creates. How well they respond will determine who will be the winners and losers of the next 30 years.