Of robbing banks and broadcasting

Chris Anderson talks about his concept of “scaling down” in a provocative post this morning. He rightly states (he’s always right) that digital businesses can be efficient enough to deal at very small levels, and he adds, “a small percentage of a very large number can still be a big number.”

I call this “scaling down”, and it’s a core Long Tail competency. Traditional businesses target the top end of the market–the biggest hits and the richest customers–for the same reason that Willie Sutton robbed banks: because they think that’s where the money is. If you have only so many salespeople and only so many marketing dollars, such a discriminating approach makes sense. But the lesson of the Long Tail is that, as Nobel physicist Richard Feynman predicted, “there’s a lot of room at the bottom.”
This is why all this “web stuff” is so counterintuitive to broadcasters and other forms of mass media. They’re Willie Suttons all! The web’s a very different marketplace, and he who gets this will find business success downstream.

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