There have been a number of posts lately about the profitability of the long tail.
First Guy Kawasaki posts his year in review where he mentions how little he makes from his very successful blog.
Then Chris Anderson posts called "Don't quite your day job" a reaction to Guy's blog revenue talking about the long tail and its profitability.
Then Chris makes a follow up post where he clearly explains who in the long-tail ecosystem can make money, and why those that can't, shouldn't worry anyway because direct revenue is not the main motivating force or reward.
This is how he explains it:
- Consumers. Effect: Largely cultural. People have more choice, so individual taste increasingly satisfied even if the effect is an increasingly fragmented culture.
- Aggregators. Effect: Largely economic. It's never been easier to assemble vast variety and create tools for organizing it, from search to recommendations. Increased variety plus increased demand for variety equals opportunity. Also note that just as one size doesn't fit all for products, nor does it for aggregators. I think the winner-take-all examples of eBay, Amazon, iTunes and Google are a first-inning phenomena. Specialized niche aggregators (think: vertical search, such as the real estate service Zillow) are on the rise.
- Producers. Effect: Largely non-economic. I responded to a good Nick Carr post on this last year with the following: "For producers, Long Tail benefits are not primarily about direct revenues. Sure, Google Adsense on the average blog will generate risible returns, and the average band on MySpace probably won't sell enough CDs to pay back their recording costs, much less quit their day jobs. But the ability to unitize such microcelebrity can be significant elsewhere. A blog is a great personal branding vehicle, leading to anything from job offers to consulting gigs. And most band's MySpace pages are intended to bring fans to live shows, which are the market most bands care most about. When you look at the non-monetary economy of reputation, the Long Tail looks a lot more inviting for its inhabitants."
Nik Cubrilovic still holds onto the hope that producers can indeed make money from blogging and suggests some alternatives to AdSense which should be more profitable.
But of course, each of these commentators have day jobs.
There were some posts from bloggers who do basically make a business out of their blogs. First Yaro Stark who posts "Is Professional Blogging a Sustainable Business Model" and Darren Rowse with a post called "Does AdSense Suck for Bloggers?".
This is an interesting topic to me because I have had a number of conversations with friends, partners, investors etc about 'where the money is' in this emerging marketplace.
My feeling is more closely aligned with Chris Anderson's. Participants who create long-tail content are not doing it for money. We don't write open source code, contribute to wikipedia or blog about our lives for cash. We do it because we want to contribute - both to our egos and to the world. We want to be heard.
Professional producers, however, need to pay the bills. But unfortunately they are finding it hard to monetize their 'participants'. That's why I think aggregators should give something back. But that's a post for another time.
