Tail-less DVDs?
Chris Anderson rushes to defend the validity of the long tail model for the DVD market in face of seemingly opposing evidence. While Anderson's instinct to defend his theory is natural, the question of whether it is indeed valid for DVDs is not trivial.
It wasn't that long ago that DVDs were a niche market product, for those rich enough to build private screening rooms and equip them with the newest and best hi-fi systems. Then things started changing, the sharp drop in the price of basic DVD players (as well as the appearance of some mid-price alternatives to the monstrous plasma screens and 5 speaker sets) had some part in this transformation. But the most important factor in the great DVD boom was the fact that it created a new product. At some point DVDs ceased to be about superb sound and picture quality and started being about the extra features, deleted scenes, commentary, the-making-of clips etc. And a whole new market was born. I for example, never considered buying a video cassette (with the sole exception of the remastered Star Wars trilogy), but am now the proud owner of a respectable DVD collection.
At first glance there shouldn't be too much of a difference between the DVD market and the music or books market, which are the most important examples of long tails. And yet, there is a great difference. The DVD market can be broken into two major submarkets. First there is the "gift worthy" submarket, consisting mostly of limited editions or beautifully packed sets, these products will usually enjoy a long shelf life at the retailers, but also, and more important, in the consumers' mind. A collection of the Dirty Harry movies is a great gift today, and will remain one in a year, or in ten years (provided the DVD format will not be obsolete by then). This submarket should be adequately described by a long tail model, and I believe it is. But then there's another submarket, and a much broader one, that of the simple one movie DVD, with some extra features and a standard package. When first published, usually a few months after the theatrical release these DVDs are attractive, and for a short while even "gift worthy". But that's only for a very short while. With the presence of TiVo and other smart alternatives, as well as of stupid DVD-recorders, there is almost no attraction to buy a DVD of, let's say, "The Pursuit of Happyness" once it's available for grabbing on TV (and I'm intentionally ignoring illegal downloads here even if they do play some part).
I am not sure how the American DVD market behaves but in Israel it is common to see a freshly released DVD priced at approximately 100 NIS (that's around 20$), only to drop down to a third of this price after a year. Such sharp drops, needless to say, are unheard of for books and music CDs. If you insist on buying a year old book from a local store with limited shelf space you'd probably have to make an order from their central storage, but once the book arrives you'll still have to pay the full price typed at the back of the book.
To clarify my point, for a long tail description to be valid the products we're dealing with must retain their attraction despite the passing of time. I believe the DVD market to be a case in which the willingness to purchase a product suffers a sharp decline (and will probably be best fitted by some decreasing exponential function) after a period of a few months, whereas for books this decline is much slower (probably a power law behavior). Therefore, when the emergence of online retailers abolished the restrictions of shelf space we have seen a shift in the book market to reflect the real taste of book buyers. In the DVD market something similar happens, but the real taste of buyers does not conform to a long tail description.
It wasn't that long ago that DVDs were a niche market product, for those rich enough to build private screening rooms and equip them with the newest and best hi-fi systems. Then things started changing, the sharp drop in the price of basic DVD players (as well as the appearance of some mid-price alternatives to the monstrous plasma screens and 5 speaker sets) had some part in this transformation. But the most important factor in the great DVD boom was the fact that it created a new product. At some point DVDs ceased to be about superb sound and picture quality and started being about the extra features, deleted scenes, commentary, the-making-of clips etc. And a whole new market was born. I for example, never considered buying a video cassette (with the sole exception of the remastered Star Wars trilogy), but am now the proud owner of a respectable DVD collection.
At first glance there shouldn't be too much of a difference between the DVD market and the music or books market, which are the most important examples of long tails. And yet, there is a great difference. The DVD market can be broken into two major submarkets. First there is the "gift worthy" submarket, consisting mostly of limited editions or beautifully packed sets, these products will usually enjoy a long shelf life at the retailers, but also, and more important, in the consumers' mind. A collection of the Dirty Harry movies is a great gift today, and will remain one in a year, or in ten years (provided the DVD format will not be obsolete by then). This submarket should be adequately described by a long tail model, and I believe it is. But then there's another submarket, and a much broader one, that of the simple one movie DVD, with some extra features and a standard package. When first published, usually a few months after the theatrical release these DVDs are attractive, and for a short while even "gift worthy". But that's only for a very short while. With the presence of TiVo and other smart alternatives, as well as of stupid DVD-recorders, there is almost no attraction to buy a DVD of, let's say, "The Pursuit of Happyness" once it's available for grabbing on TV (and I'm intentionally ignoring illegal downloads here even if they do play some part).
I am not sure how the American DVD market behaves but in Israel it is common to see a freshly released DVD priced at approximately 100 NIS (that's around 20$), only to drop down to a third of this price after a year. Such sharp drops, needless to say, are unheard of for books and music CDs. If you insist on buying a year old book from a local store with limited shelf space you'd probably have to make an order from their central storage, but once the book arrives you'll still have to pay the full price typed at the back of the book.
To clarify my point, for a long tail description to be valid the products we're dealing with must retain their attraction despite the passing of time. I believe the DVD market to be a case in which the willingness to purchase a product suffers a sharp decline (and will probably be best fitted by some decreasing exponential function) after a period of a few months, whereas for books this decline is much slower (probably a power law behavior). Therefore, when the emergence of online retailers abolished the restrictions of shelf space we have seen a shift in the book market to reflect the real taste of book buyers. In the DVD market something similar happens, but the real taste of buyers does not conform to a long tail description.
posted by Shahar at 1:32 AM
0 Comments:
Post a Comment
<< Home