[10:43] Rodica Millionsofus: ok, Chris is here [10:43] Rodica Millionsofus: welcome Chris :) [10:43] Spin Martin: just another day in new york city [10:43] Rik Riel: I saw lots of geeks panting aganist the glass [10:43] Reuben Millionsofus: Hello everyone [10:43] Jane Calvert: hehe Rik [10:44] Persimmon Gjellerup: No more Zombie Chris?? [10:44] Reuben Millionsofus: I think we're ready to get going [10:44] Reuben Millionsofus: Chris is that the real you? [10:44] LongtailChris Anderson: Yes, it'sthe real me. [10:44] Sue Stonebender: ~grins~ [10:44] Reuben Millionsofus: wonderful [10:44] Hamlet Au: He breathes! [10:44] Persimmon Gjellerup: welcome Chris [10:44] You: do something to prove it. [10:44] epredator Potato: WOOHOO!!! [10:44] Rodica Millionsofus: haha [10:44] Reuben Millionsofus: Well, thank you to everyone for coming to join us here [10:45] Rik Riel: WOOT!!!!! [10:45] Reuben Millionsofus: Our guest today is not only the editor of Wired [10:45] Icon Serpentine claps. [10:45] Jane Calvert: woot! [10:45] LongtailChris Anderson: Thanks, nice to be here. It's an odd keyboard, so my typing is going to suck. [10:45] Reuben Millionsofus: (whose office in SL we'll be unvieling in the next couple days) [10:45] Reuben Millionsofus: but also the author of "The Long Tail' [10:45] Korayama Savard claps [10:45] Reuben Millionsofus: a bookthat grew out of a blog [10:45] Spin Martin claps for teh blogs. [10:46] Koz Farina: mmm blogs [10:46] Reuben Millionsofus: about the odd effects hat digital distrbution is having on the way in which w view economics of content [10:46] Rik Riel: blogs are just a fad [10:46] Multi Gadget v1.49.3 by Timeless Prototype [10:46] Reuben Millionsofus: it's a huge honor to have him here today [10:46] Spin Martin: heh [10:46] Korayama Savard nods [10:46] Reuben Millionsofus: and with that, i'll turn the stage over to Chris Anderson [10:46] Reuben Millionsofus: and the fammous Hamlet Au [10:46] epredator Potato: this interweb thing might catch on you know :-) [10:46] Spin Martin: 7 years later, still waiting for the fad to end [10:46] Spin Martin: and 640k is all you need [10:47] Reuben Millionsofus: Chris, right click the seat t sit down [10:47] Hamlet Au: Thanks! Welcome Chris, please have a seat. [10:47] Icon Serpentine: spin: exactly. [10:47] Hamlet Au: Thanks for coming all, let me start with my own introduction. [10:47] Hamlet Au: If "The Wisdom Crowds" was the cocktail buzzword of the last few years, then "The Long Tail" is the term for today. [10:47] Hamlet Au: When Chris Anderson coined it, he was describing an Internet-driven economic phenomenon, but since then it's been applied to various pursuits, from foreign policy to education. Sign of a book here to stay. [10:48] Hamlet Au: Unsurprisingly, *The Long Tail* was a New York Times bestseller on its July release, and still maintains a very healthy position on Amazon's chart. (The long tail of *The Long Tail*) right there. [10:48] Hamlet Au: His book on the aggregation and acquisition of stuff via the Net is particularly apt to discuss here. Because if there's one thing Second Life has, it's stuff. [10:48] Hamlet Au: Terrabytes of user-created content from more than 3 years of this world's existence, sitting in thousands of Residents' inventory. [10:48] Hamlet Au: So hopefully he's able to help us understand the Long Tail of the metaverse, too. [10:48] Hamlet Au: :) [10:48] Hamlet Au: Formerly an editor at The Economist, Chris Anderson has been editor-in-chief of Wired Magazine for the last five years. [10:48] Hamlet Au: He stewarded it through the post-dot com crash to maintain and grow the magazine's relevance. [10:48] Hamlet Au: And not just as the standard-bearer of digital culture, but as an indispensable resource for understanding the post-9/11 era, too. [10:48] Hamlet Au: Last year, to no one's shock, Wired won a National Magazine Award for general excellence. And this month, I'm happy to say, they finally featured Second Life on the cover. [10:48] Hallucinations Badge: worn, voices off [10:48] Hallucinations Badge: loading 0/31 [10:48] Hamlet Au: So it's a double pleasure to welcome Chris to SL, to speak about *The Long Tail* and related topics, and if we're lucky, to autograph some books, too. [10:48] Rik Riel: WOOT!!!!! [10:48] Hallucinations Badge: loading 5/31 [10:49] Hamlet Au: And with that, ladies and gentlemen and aliens, mythical creatures, and furries of indeterminate gender, please join me in welcoming Chris Anderson's avatar! [10:49] Hallucinations Badge: loading 10/31 [10:49] Rodica Millionsofus: yay! go wired! [10:49] Hallucinations Badge: loading 15/31 [10:49] Gwyneth Llewelyn: Welcome, Chris :) [10:49] Persimmon Gjellerup: Woot [10:49] Hallucinations Badge: loading 20/31 [10:49] Yossarian Seattle: Woo [10:49] Ute Hicks claps [10:49] Hamlet Au: If you have questions for Chris, please IM them to Rodica Millionsofus. Though let's start off with a few of my own. [10:49] Hallucinations Badge: loading 25/31 [10:49] Hallucinations Badge: loading 30/31 [10:49] Hallucinations Badge: load complete [10:49] Hamlet Au: Thanks again for coming, Chris. [10:49] epredator Potato: WOOHOO!!! [10:49] LongtailChris Anderson: This is the coolest thing I've done all morning [10:49] Hamlet Au: :) [10:49] Korayama Savard: Smiles [10:49] Hamlet Au: To start off, give us the "elevator pitch" for *The Long Tail*. [10:50] LongtailChris Anderson: The Long Tail describes the world beyond the blockbuster. Our economy and culture is shifting from mass markets to millions of niches. [10:50] LongtailChris Anderson: The rise of distribution methods with unlimited capacity or “infinite shelf space”, of which the Internet is the foremost (but not only) example, [10:51] LongtailChris Anderson: have made it finally possible to offer consumers an incredible variety of products and other goods that were previously suppressed by the economic and physical limits of traditional retail and broadcast. [10:51] LongtailChris Anderson: The Long Tail refers specifically to the “long tail” of the familiar fast-falling demand curve in economics—we’ve usually looked just at the high part of the curve on the left, where the hits are. [10:51] LongtailChris Anderson: But the tail of smaller-sellers is incredibly long, and when you can offer everything all those niche product can add up to a market that rivals the “head”. [10:52] LongtailChris Anderson: Phew...now on to the fun stuff. Ask away... [10:52] Hamlet Au: Excellent. [10:52] Hamlet Au: Walk us through one of the most potent examples of the Long Tail phenomenon from your book, and tell us a bit about the factors at play. [10:52] LongtailChris Anderson: Well. the most dramatic--but by no means only--examples are in the media and entertainment businesses... [10:53] LongtailChris Anderson: That's where there is a huge amount of variety and cultural diversity that has been obscured by the very narrow focus on blockbusters in traditional distribution channels, from retail shelves to radio stations. [10:53] LongtailChris Anderson: For example, today, around 40% of the music downloaded on digital music services such as Rhapsody are tracks not available at Wal-Mart, America's leading music retailer. [10:53] LongtailChris Anderson: For Netflix (DVDs) and Amazon (books), about a quarter of their sales are for titles not available in the largest bricks-and-mortar retailers in their industry. [10:53] LongtailChris Anderson: Products that aren't for everyone--but may really suit some people--typically don't pass the economic test for traditional retail. [10:54] LongtailChris Anderson: But because each of us has some niche interest somewhere and we now have distribution methods with "infinite shelf space" and near-zero marginal costs, we can now aggregate all these minority tastes. [10:54] LongtailChris Anderson: This new market of a million niches is adding up to a big new opportunity and the fastest-growing one around. [10:54] LongtailChris Anderson: [end] [10:55] Hamlet Au: As you say, much of *The Long Tail* dwells on media content-- books, movies, and so on. But that's only a small part of the overall economy. [10:55] Hamlet Au: Does the Long Tail apply to the fundamental material or perishable industries of modern society? In other words, is there a Long Tail for, say, raw steel, or bushels of mache? [10:55] LongtailChris Anderson: Mache? But to answer your question, yes. To greater or lesser degrees, it applies almost everywhere that digital economics are lowering the cost of distribiution. [10:56] LongtailChris Anderson: That includes hard goods (think eBay) and services (think Google ad words, which are the Long Tail of advertising). [10:56] LongtailChris Anderson: To give an example that shows just how far you can take this, Anheiser [sp?] Busch recently started a new division called "Long Tail Libations". [10:56] Hamlet Au: ! [10:56] Sue Stonebender: ~laughs~ [10:56] Korayama Savard laughs [10:56] LongtailChris Anderson: What's the Long Tail of beer? Microbrews! [10:56] Rodica Millionsofus: lol! [10:56] LongtailChris Anderson: Supply chain efficiencies in supermarket distribution now mean that you can efficiently stock twice as many products as just 15 years ago, so there's room for minority beer tastes. [10:57] LongtailChris Anderson: sorry for being such a newbie, but how do I signify that I'm finsihed answering? [10:57] Hamlet Au: That's one way. :) [10:57] Hamlet Au: Or a nod, or whatever should suffice. [10:57] Hamlet Au: (Mache are those leafy greens you put on salads. Trader Joes has them, they're hard to manufacture, but they rock.) [10:58] Hamlet Au: So to my next question... [10:58] Hamlet Au: Don't the realities of corporate management make the Long Tail fairly irrelevant? Take the film industry. When a big budget movie is a huge hit, the parent corporation's stock goes up, and the executives get rich. [10:58] Hamlet Au: So executives have incentive to finance out-the-gate hits, but do they really have an immediate, next quarter incentive to foster the long tail of their back catalog, where profits are slow to come? [10:58] LongtailChris Anderson: But hits are unpredictable. Why risk your career on the toss of a dice when you can spread the risk over a larger portfolio of smaller investments? [10:59] LongtailChris Anderson: The profits in the back catalog (which is just one form of the LT) aren't slow--they're *steady*! [10:59] Hamlet Au: OK. Onward? [11:00] LongtailChris Anderson: whoops-yes, still trying to figure out how to nod [11:00] Hamlet Au: A textual nod is probably easiest. [11:00] Hamlet Au: A lot of people worry about how the Long Tail effect might fracture society. To that concern, you've said, "We may be more fragmented, but we'll also be richer as a culture." But let's consider a specific example. [11:00] Koz Farina: slash me nods [11:00] Hamlet Au: If thanks to the Long Tail, all the conservatives are only reading Bill O'Reilley and his kind, and all the liberals are only reading Al Franken and his kind, how can this possibly make our political culture richer? [11:00] LongtailChris Anderson: nod [11:01] Chris Calliope nods [11:01] LongtailChris Anderson: Yeah, I get that a lot. Clearly the political climate at this moment isn't helping. Broadly, I think that this is just a case of a pendulum overswing. We've been so hungry for fresh, authentic voices in politics [11:02] LongtailChris Anderson: that we're rushing for the blogs, even though they're often shrill. I suspect over time we'll get better at compiling a more balanced view from many source rather than just counting on the NYT to do it for us. [11:02] Page_Left: Owner changed. [11:02] LongtailChris Anderson: [end] [11:02] Hamlet Au: Again, all, if you have follow-ups for Chris, please IM them to Rodica Millionsofus. She'll relay some or all of them for him. Just a couple more from me... [11:02] Hamlet Au: Wired.com just reported about a Second Life project that can take in-world objects and fabricate them in the real world. [11:03] Hamlet Au: Assuming this 3D printing becomes a widespread and affordable procedure, what Long Tail applications do you see coming out of it? [11:03] LongtailChris Anderson: I saw a great quote the other day that 3D printing "makes complexity free". [11:04] LongtailChris Anderson: Moore's Law made transitors free, which is why we can "waste" computing as extravagently as we're doing right now. [11:04] LongtailChris Anderson: 3D printing makes complicated objects as cheap as simple ones. So the question is what's the physical version of something like the Mac UI? [11:05] LongtailChris Anderson: I suspect that it will be things that are "unncesessarily" detailed and beutiful--becuase we can. [11:05] LongtailChris Anderson: That would be cool. [end] [11:05] Hamlet Au: Obviously the purchase of YouTube by Google is the big Internet news this week. Reflect on it for us. What's it say about the Long Tail phenomenon? [11:05] LongtailChris Anderson: It's a huge vote of confidence. [11:06] LongtailChris Anderson: Media learned how to compete with the LT in the 90s, because the bandwidth of the time made text work online [11:07] LongtailChris Anderson: Then the music industry learned to compete with the LT around 2000, when the bandwidth made sense for MP3s [11:07] LongtailChris Anderson: Now TV is going to have to compete with web video. [11:07] LongtailChris Anderson: They thought we wanted 30 min and 1 hr dramas and high production content that only they could created. The truth is that we do, but we also want more [11:08] LongtailChris Anderson: YouTube offers us more, and what's great about it is that's it's unbounded in supply, diversity and source. [end] [11:08] Hamlet Au: Fascinating. Rodica, there were some questions from the audience? [11:09] epredator Potato: yes [11:09] Rodica Millionsofus: yes, Gwyneth Llewelyn want to know Wired has been at the forefront of the Net culture — always was and always will. Some Wired editors and columnists are regular residents of SL now. Do you wish to reveal now the plans that Wired has for SL? :) [11:09] Rodica Millionsofus: i have a cue, everyone, dont worry...your questions will get asked [11:10] LongtailChris Anderson: Fortunately, I've got Chris Baker, my SL master, sitting next to me here. Rodica has built us an amazing environment and there will be an open house there tomorrow at 4:00-7:00 pst [11:10] LongtailChris Anderson: more to come [end] [11:10] Gwyneth Llewelyn: thank you ;) [11:10] Hamlet Au: Never miss a Wired party, they throw the best! [11:10] Rodica Millionsofus: Ariel and Csven both have economics related questions :) [11:10] Rodica Millionsofus: Ariel: If long-tail revenues of any significance are spread over time, what are the short term incentives to producers who can often get a higher short-term return on investment? [11:10] Page_Left: Owner changed. [11:10] Rodica Millionsofus: Csven: How's the time-based work coming on the data? [11:11] LongtailChris Anderson: Yikes. Okay, I'll try to answer that one. There are two LTs in content. One is broad appeal down to narrow appeal [11:12] LongtailChris Anderson: The other is new vs old [11:12] LongtailChris Anderson: So the LT revenues that you describe as being slow to mostly refer to the second, the monitization of archives over time [11:13] LongtailChris Anderson: The other big point to make is the we're not just talking about a monetary economy. [11:13] LongtailChris Anderson: Most of the content created in the LT these days --from blogs to web video -- is done for free, with no expectation of financial return. [11:14] LongtailChris Anderson: There are plenty of business opportunities in *aggregating* that conent, but the money doesn't necessarily accrue to the creators. [11:14] LongtailChris Anderson: Now for the second question. Csven, could you elborate? [11:14] German Guru: i believe the work-for-free is going to change (and should) if more RL companies come here, and want to hire local SL talent. [11:14] Ariel Spoonhammer: thank you, chris [11:15] You: Some time back you posted a couple of images showing some time-based data [11:15] You: Just wondering if you've continued that analysis [11:16] LongtailChris Anderson: Ah. Yes, I did a project on the LT of Time (for a Long Now lecture). We quantified the decay function of content (mostly music) over time, thanks to a cool service called InfoFilter. [11:16] Multi Gadget v1.49.3 by Timeless Prototype [11:16] LongtailChris Anderson: It, unsurprisingly, turned out to follow a powerlaw curve as well, although it was hard to make many predictions on the exponents because music is so diverse. [11:17] Multi Gadget v1.49.3 by Timeless Prototype [11:17] LongtailChris Anderson: What we're mostly focusing on right now is estimating the latent value in archives by looking at where sales fall off the predicted powerlaw curve. [end [11:18] Hamlet Au: Chris, let us know when you need to leave in 5-10 minutes, so we have time for you to autograph some books. [11:18] Falk Bergman: ya [11:18] Hamlet Au: But next question, Rodica? [11:18] Rodica Millionsofus: speaking of new vs old, epredator wants to know "is web video going to have compete with particpation in the metaverse?" [11:18] David Tengu has to go, sometimes i hate RL [11:18] LongtailChris Anderson: I've can do another ten mins of qs before we sign [11:19] Meursault Camus: thanks chirs [11:19] Koz Farina: lets put web video IN the metaverse and pump machinima out to the web ;) [11:19] Rodica Millionsofus: he continues that question with "do you think the long tail applies to the number of envrinemts like Second Life, i.e. lots of metaverses?" [11:19] LongtailChris Anderson: I think the question is what YouTube competes with. DOes it compete with TV, the Web, RL, or SL. [11:20] LongtailChris Anderson: I suspect the answer is that it mostly competes with TV and the Web, and less with interctive and communal activities such as games and SL. [11:20] epredator Potato: it competes with people time though? [11:20] Rodica Millionsofus: easy on the follow up questions, please :) [11:20] Page_Left: Owner changed. [11:21] epredator Potato: :-) [11:21] Hamlet Au: Next Q, Rod? [11:21] LongtailChris Anderson: As for the second part, I see lots of LTs here. Yes, lots of niche communities, both within places like SL and in other metaverses. Also the content created in-game, of course. And finally the different useage modes, from casual to intense, which are... [11:21] LongtailChris Anderson: not as widely spread in traditional gaming. [11:21] epredator Potato: thanks :-) [11:21] Rodica Millionsofus: computer columinst for CBC Radio and Television Canada asks: "Do you see an economic tipping point in 3rd-world countries near term? [11:21] Rodica Millionsofus: For instance, do you imagine micro-finance led/Grameen Bank style projects such as groups of women artisans in the Sudan becoming a signicant part of LT?" [11:22] epredator Potato: /nod [11:22] Sue Stonebender: that would by my question, I'm the columnist asking ... ~laughs~ [11:22] Rodica Millionsofus: indeed she is : [11:22] Rodica Millionsofus: :) [11:23] LongtailChris Anderson: Yikes. That's a bit outside my area of experise. I did run the Economist bureau in Southern China in the 90s, but that's not 3rd world anymore. But to try to answer your question... [11:24] LongtailChris Anderson: Many people have noted that there's a similarity between the LT and CK Prahalad's "bottom of the pyramid" theory, which is also about the big market *below* the traditional markets. [11:24] Korayama Savard: phew [11:24] LongtailChris Anderson: I spent a while in India trying to match the two, and I came to the conclusion that they're about different effects. CK's theory is about *commoditization*--making products so cheap that anyone can afford them. [11:25] LongtailChris Anderson: My theory is about *nichefication*--making product variety so wide that all tastes are served, regardless of price. [11:25] LongtailChris Anderson: [end] [11:25] Sue Stonebender: Thanks, Chris. [11:25] Hamlet Au: One or two more, Rod? [11:25] Rodica Millionsofus: Icon Serpentine wants to know :"how does the long tail affect small business and independent artists?" [11:26] LongtailChris Anderson: Well, it's a very good thing, but I wouldn't expect the rewards to be loads of money. Basically, the democratization of the tools of production and distribition mean that it's easier to make... [11:27] LongtailChris Anderson: and distributed products, which means that there's more variety out there and that it's easier to tap *distributed* demand and not just the ususal geographically concentrated demand. [11:28] LongtailChris Anderson: That means larger audiences, for a starte. How to turn that into money isn't always clear, although in music at least there's a clear shift from selling music as a product to using free music as [11:29] LongtailChris Anderson: an advertisement for the live show, which is an experience that can't be replicated well online (SL aside!). For other small businesses outside of entertatingment, the opportunities lie.. [11:29] LongtailChris Anderson: in being more effeciently aggregated in global makets. Like the eBay effect, but in more markets and for more goods. [11:29] LongtailChris Anderson: [end] [11:30] Icon Serpentine: /nods. [11:30] Icon Serpentine: thanks. [11:30] Rodica Millionsofus: and one last question from Zenigma...he asks What are some of the ways to convert a business that has been "head" focused to LT? For example, print music where quite a lot of it is out of print and unavailable. [11:31] LongtailChris Anderson: The big issues in those business lie in the conversion of the products to digital and clearing the rights. Each industry is different, but in general those transaction costs are still really high. [11:31] Multi Gadget v1.49.3 by Timeless Prototype [11:31] Hamlet Au: SOrry about that, self-pwned. [11:32] LongtailChris Anderson: I call that the "elephant in the room" of the LT and it's the biggest barrier remaining. The costs of releasing archival material have to be so low that you can afford to have much of it not sell at all. [11:32] LongtailChris Anderson: You just can't predict what will sell and what won't so you have to find methods to get it all out there and let the marketplace sort it out. [end] [11:32] Zenigma Suntzu: Thank you Chris. [11:33] Rodica Millionsofus: Thanks Chris! [11:33] Hamlet Au: So Falk, are we ready to set Chris up for autographs? [11:33] Falk Bergman: yes it should be