Tag Archives: Long Tail

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Chris Anderson on the “new industrial revolution” of bespoke manufacturing

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Wired ed-in-chief Chris Anderson emerges from the back rooms once again with a lengthy piece lauding what he calls “the next industrial revolution” – which is, in essence, the imminent explosion of small companies using modern fabrication equipment and outsourcing techniques whose agility and low overheads will enable them to sweep away the old guard of corporate giants. [image by oskay]

That’s the theory, anyway, and it should be fairly familiar to regular Futurismic readers: we’re talking consumer-price-point 3D design software; 3D printing and fabrication; outsourced manufacturing; garage-industry electronics assembly techniques; open-source designs; hardware and software hacking; crowdsourcing for ideas, designs and feedback. You should read the whole thing, but here’s a slice that captures the spirit:

Here’s the history of two decades in one sentence: If the past 10 years have been about discovering post-institutional social models on the Web, then the next 10 years will be about applying them to the real world.

This story is about the next 10 years.

Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks. The Internet democratized publishing, broadcasting, and communications, and the consequence was a massive increase in the range of both participation and participants in everything digital — the long tail of bits.

Now the same is happening to manufacturing — the long tail of things.

The tools of factory production, from electronics assembly to 3-D printing, are now available to individuals, in batches as small as a single unit. Anybody with an idea and a little expertise can set assembly lines in China into motion with nothing more than some keystrokes on their laptop. A few days later, a prototype will be at their door, and once it all checks out, they can push a few more buttons and be in full production, making hundreds, thousands, or more. They can become a virtual micro-factory, able to design and sell goods without any infrastructure or even inventory; products can be assembled and drop-shipped by contractors who serve hundreds of such customers simultaneously.

Today, micro-factories make everything from cars to bike components to bespoke furniture in any design you can imagine. The collective potential of a million garage tinkerers is about to be unleashed on the global markets, as ideas go straight into production, no financing or tooling required. “Three guys with laptops” used to describe a Web startup. Now it describes a hardware company, too.

From a globalist perspective, it’s pretty optimistic – as you might expect from the guy who came up with the concept of the Long Tail. That said, it’s not what the big corporations want to hear… and that’s probably the main stumbling block between the here and now and Anderson’s entreprenurial utopia. It’s become embarassingly obvious how much of a hold corporate America has over the engines of policy, and it probably won’t take much effort to spin Anderson’s vision into a dark and unpatriotic future where American manufacturing jobs are sent overseas (to those sneaky Chinese, no less!), garage makers are enemies of freedom (and probably a glass fiber’s breadth from becoming terrorists), and the people’s right to not be shafted by those who already hold all the aces is swept under the carpet so as to maintain a precarious economic status quo.

OK, so I’m overstating for effect, there… but you can see where I’m going with this, I hope. Given the staggering levels of obfuscation and deceit involved with the US healthcare reforms, I can’t see Anderson’s revolution happening without some serious back-room dealing and political psy-ops from those who stand to lose the most from it. And I doubt it will be a uniquely American problem, either; the government to which I pay my taxes is just as compromised, albeit in slightly different ways, and the richer countries of the Old World are all in the same boat.

What remains to be seen is whether Anderson’s maker revolution is an economic inevitability or an avoidable alternative. It’ll come as no surprise to most of you who read here regularly that I’d like nothing more than to see the bloated corporate behemoths of the world get their shoes wet while doing a King Canute impersonation, but only time will tell. This is one story where we can’t just skip to the last page to find out the ending; let’s just hope we don’t get squashed by the plot mechanics, eh? 🙂

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Amazon, ebooks and piracy – tipping points ahoy?

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Sticking with the piracy theme for a moment (yeah, I know, so out of character, right?), here’s an article at TechRadar that features an interview with one George Walkley, head of digital developments for publishers Hachette UK, talking about ways in which the publishing industry has tried to learn from the spectacular blunders and ostrich impressions of the music recording industry – the issue of file format compatibility, for instance. [image by Eirik Newth]

Says Gary Marshall the journalist:

Digital downloads weren’t cheaper than CDs, and for now at least ebooks probably won’t be cheaper than print. That’s partly because most of the costs apply whether you publish a book on paper or on an iPhone, and it’s partly because of tax: “printed matter” books are zero rated for VAT, whereas electronic ones have to charge the full 17.5%.

It’s a weird anomaly, and if we were in the book business we’d be lobbying Alistair Darling like crazy to get electronic books treated the same as printed ones.

The challenge for publishing is to avoid being seen as greedy. In music, the debate quickly became characterised as The Man versus The Kids, where The Man was Bono, his celebrity mates and their filthy rich record companies.

In reality, most musicians are struggling to pay the rent, but that’s not what the average file sharer thinks.

This is very true… as is the article’s revelation that the book-buyer demographic and the music pirate demographic are very very different. But as a side note, I’d point out that almost all musicians (and, I suspect, the vast majority of novelists) have been struggling to pay the rent for decades, and that the exceptions to that norm – the Bonos and McCartneys and Rowlings of the world – have been enthroned on their disproportionate mountains of cash by the same business models that are now collapsing under the pressure of filesharing.

I’d even go so far as to say that the business models in question have gone some distance toward ensuring that the smaller names in music and writing can’t make a reasonable living wage at it; if there’s [x] amount of money sloshing round in the economy that people are willing to spend on entertainment, then the way that money is divided up between the entertainers is controlled by the distribution and publicity systems of the industries that publish them.

The utopian promise of The Long Tail is that the more obscure artists will have a better chance of being discovered by readers or listeners who will enjoy (and hence purchase) their work, while the megastars will wane to a more modest brightness as the monopoly control their publishers had over the formerly-limited channels of publicity and sales frontage is eroded. Whether that utopia arrives or not remains to be seen; personally, I think we’re headed in that direction, but it will take hard work from the publishers to avoid creating the black-market demand that buried the big record labels. I want to see the artists I enjoy get paid, and I’m happy to pay them… but the price has to be right, as does the share that goes to the creator. Walkley is wise to this, it seems:

“Copyright infringement cannot be prevented altogether, only reduced,” he says. Speaking personally, he says he’d like to see action against the most egregious offenders – but he also says that the key is to give consumers what they want.

“One of the most important things we can do is to make the purchase of legitimate ebooks as easy and as convenient as possible and produce a broad range of titles in digital formats,” Walkley says. It’s a lesson that took the music industry more than a decade to learn.

Amen. And right on the tail of that article comes an announcement from Amazon, wherein they try to sweeten the deal on Kindle-based ebook pricing for publishers:

Amazon.com […] today announced details of a new program that will enable authors and publishers who use the Kindle Digital Text Platform (DTP) to earn a larger share of revenue from each Kindle book they sell. For each Kindle book sold, authors and publishers who choose the new 70 percent royalty option will receive 70 percent of list price, net of delivery costs. This new option will be in addition to and will not replace the existing DTP standard royalty option. This new 70 percent royalty option will become available on June 30, 2010.

Delivery costs will be based on file size and pricing will be $0.15/MB. At today’s median DTP file size of 368KB, delivery costs would be less than $0.06 per unit sold. This new program can thus enable authors and publishers to make more money on every sale. For example, on an $8.99 book an author would make $3.15 with the standard option, and $6.25 with the new 70 percent option.

It’s a generous offer, but it looks to me like Amazon wants to be the iTunes of books – which is an understandable business goal, certainly, but hinges on locking publishers and consumers alike into one proprietary and intrinsically limited hardware platform. I suspect that once Steve Jobs has delivered his next sermon to the Fapple faithful, and the much-vaunted Tablet paves the way for cheaper and more open equivalent hardware, the range of affordable and open devices upon which ebooks can be read comfortably will mushroom.

Will the publishers be ready with the right formats at the right price? Will the book-buying demographic be more willing to compromise than the BitTorrent kids? I guess we’ll just have to wait and see.

[ Full disclosure: I have done freelance work for Hachette UK, and George Walkley is an acquaintance of mine. ]

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Manufacturing popularity: cultural groupthink and the lottery of art

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Wired‘s Clive Thompson has an article about some intriguing research into the effects of the “self-fulfilling prophecy” on popularity in art. [image by vagawi]

It’s been known since the 1940s that we base our opinions on the opinions of others at a subconscious level, but modern web applications and social network technology have enabled researchers to quantify and assess the power of the phenomenon with much greater precision. If you’ve ever harboured a suspicion that the runaway success of certain musicians, bands, writers and artists was more down to luck and advertising budgets than any objective measure of quality, it turns out that you may have been at least partially right.

[Watts and Salganik] created a music-downloading Web site. They uploaded 48 songs by unknown bands and got people to log in to the site, listen to the songs, then rate and download them. Users could see one another’s rankings, and they were influenced in roughly the same way self-fulfilling prophecies are supposed to work. That meant some tunes could become hits — and others duds — partly because of social pressure.

Watts and Salganik ran the experiment over and over — each time with a new group of people — until they’d gotten 12,900 participants. In essence, they rewound history each time: Every new group started fresh, listened to the same 48 songs, and made up their collective mind.

The result? Different songs were hits with different groups. A few songs frequently — but not always — hovered near the top, and a few at the bottom. But for most of the tracks, success — or failure — seemed random.

Next, fake the peer feedback and see what happens:

They took the song ratings of one group and inverted them so bottom-ranked music was now at the top. Then they gave these rankings to a fresh set of listeners. In essence, they lied to the new group: They told them that songs that weren’t popular with previous listeners actually were.

The new listeners dutifully took their social cues from the bogus popularity rankings — they ranked the fake-high ones high, even downloading them, while snubbing the fake-low ones. Apparently, flat-out lying works.

But only sometimes. Eventually, some of the previously top-ranked songs began to creep back up, and previously bottom-ranked ones slid down. And people in the upside-down world downloaded fewer songs overall.

So quality matters, but so does luck and public opinion… and the effect of public opinion is magnified as it accumulates. Looking at the pop music charts at the moment, I think we can see the same results being reflected on a much bigger scale: the hegemonic power of restricted channels (radio, MTV) has been eroded by the multiplex narrowcasts of the internet, meaning adventurous listeners are more able and likely to encounter more marginal works. Meanwhile, the body of listeners still following the old channels are left with a selection of product that is increasingly groomed and engineered to appeal to those who bought whatever was selling well last week. End result: a flourishing of small-beer independent artists, and a diminishing market for increasingly predictable (and in some cases desperate) manufactured pop.

But how does this reflect on the seemingly inexplicable runaway successes of the book world – the Dan Browns and Stephenie Meyers? Might more marginal authors have replicated their success if they’d had the same degree of initial exposure, publicity and luck? If so, will the levelling of the artistic playing field promised by the Long Tail eventually start throwing more literary curveballs into the bestseller lists? Or will the same old lottery of chance and recommendation rebuild itself on top of the new networks, leaving objective quality (if any such thing really exists) forever playing diminuendo second fiddle to popularity?

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Yanking on the Long Tail

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Ring-tailed lemurChris Anderson’s ‘Long Tail‘ theory of online economics gained traction with great rapidity, but gathered its fair share of detractors along the way. Hence when a group of economists examined some different data and found a different distribution, there was much snarking:

This really isn’t the upbeat fairy tale message Anderson has spent four years selling on the conference circuit. However, as he took his “message” to Davos and beyond, the Long Tail has gradually developed into a ‘Policy Based Evidence Making’.

Ouch. Anderson’s not giving up just yet, though:

Unfortunately, Page didn’t send me the data or reveal its source, so we may not be able to answer these questions. He’s a good economist, so I’m sure his analysis is excellent. But without knowing where the data came from, we really have no way of knowing whether he’s discovered anything about music demand broadly, or has just been reminded once again that some music markets, such as mobile, don’t work very well.

Anderson also points to a post at Hitwise which suggests that – in the business of search, at least – the Long Tail is alive and well.

So, is the future of business in “selling less of more”? Who knows – as with most predictions about the future, those of us who aren’t economists will just have to wait and see. [image by benoutram]