The Economy of Niches

An interesting thought from The Long Tail by Chris Anderson:

The sales data and trends from [services like Netflix, iTunes, Rhapsody] and others like them show that the emerging digital entertainment economy is going to be radically different from today’s mass market. If the twentieth-century entertainment industry was about hits, the twenty-first will be equally about niches.

For too long we’ve been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching—a market response to inefficient distribution.

The main problem, if that’s the word, is that we live in the physical world, and until recently, most of our entertainment media did, too. That world puts dramatic limitations on our entertainment.

[…] Now, with online distribution and retail, we are entering the world of abundance. The differences are profound.

Even though I’ve just begun reading The Long Tail: Why the Future of Business Is Selling Less of More, it looks awesome. The term ”Long Tail” refers not so much to entertainment, but to”the concept of using the efficient economics of online retail to aggregate a large inventory of relatively low sellers.”