Thursday, April 17, 2008

Long Tail Gets Longer

Is there a way to monetize UGC? The YouTube reports came in and it seems that a popular show on YouTube Break a Leg, received a check for $1600 after 2 million views for an 80 cent CPM. What does this mean? It means that collectively all of our UGC might let someone eat lunch, but its not going to be the creator of that content. Just like Amazon who claims that the long tail exceeds the head of the tail in terms of revenue, the long tail of content probably does as well. But who wins there? Amazon does. By aggregating all of these pennies they are able to make a business. YouTube wins (sort of) by aggregating all of these videos. Is crossing over into traditional media the only way to earn a real living? Bloggers appear to have figured it out: Gawker, TMZ, Perez Hilton, although the latter two have crossed over into mainstream. Further, these are well trafficked blogs. The stars of Internet video (LonelyGirl guys) just got $5 million to continue to make shows. Well if you're an economist this could be a good trend. The monetization for content is creeping down the long tail toward the tail but its stalled in the middle.

Will the long tail ever become profitable for the content creator? Well by definition it means that its content serves a small niche. (sometimes a niche of one). The medical / scientific / engineering communities found a way to monetize this by charging more money for each research paper that you might want to read online. Trade journals are very expensive - $100 an issue. Not because they print on glossy paper but because they (like you) need to eat! And given this high price, most likely they have a highly targeted audience and thus, advertising will be most effective for niche products.

So going back to the long tail, will there be an effective way to monetize? I think so. But right now the Internet is all about scale. If we can cut through that and think about relevancy than I'll be able to continue to watch

No comments:

Post a Comment