October 4, 2013 MUSIC INDUSTRY TO INDIES: "LET THEM EAT CAKE"
Yes, we will be comparing big music and media to the French aristocracy who lost their heads in the French Revolution. No, I do not believe it to be a literal comparison, but figuratively, it’s pretty darn close.
Google’s Eric Schmidt: “I would like to tell you that the internet has created such a level playing field that the Long Tail is absolutely the place to be — that there’s so much differentiation, there’s so much diversity, so many new voices. Unfortunately, that’s not the case. What really happens is something called a power law, with the property that a small number of things are very highly concentrated and most other things have relatively little volume. Virtually all of the new network markets follow this law. So, while the tail is very interesting, the vast majority of revenue remains in the head. And this is a lesson that businesses have to learn. While you can have a Long Tail strategy, you better have a head, because that’s where all the revenue is. But when you get everybody together they still like to have one superstar. So, we love the Long Tail, but we make most of our revenue in the head, because of the math of the power law. And you need both, by the way. You need the head and the tail to make the model work.”