The long tail form of distribution explained.

Chris Anderson is the editor of Wired Magazine and author of business bestseller, "The Long Tail: Why the Future of Business is Selling Less For More." The phrase The Long Tail itself reflects a graphical image. When plotted on a graph, where the horizontal axis is labeled "volume" and the vertical axis represents "popularity," a small number of high revenue generating, bestselling items resemble a head (they shoot straight up in popularity, but are small in quantity). On the other hand, when lower revenue generating, niche products are plotted on a graph (next to the bestsellers) they resemble a long tail, remaining low in popularity (close to the bottom of the y-axis) but continuing on indefinitely. In the book, Anderson argues that cumulatively, all of the non-hits and specialized offerings in the Long Tail represent a large market share on the Internet. VideaAge spoke with Anderson prior to his keynote address at NATPE to find out more about his theory.

VideoAge: In 1953, the biggest hit on TV was I Love Lucy, with 70 percent of TV households. Today, the number one show on Monday nights during November sweeps was Deal of No Deal, with six million viewers. Is the hit dead?

CA: The hit will never die. What has changed is the extent of choice. For 50 years, distribution scarcity drove behavior rather than genuine consumer preferences. Now that viewers have a real choice, they clearly don't necessarily want their programming in 30-minute content blocks. So the hit will survive, but the Long Tail can also thrive.

VA: Who will be the winners in a world where the Long Tail is a viable economic model?

CA: The Internet diminishes the scarcity of access to distribution. Once upon a time, the only programs I could watch were the shows using the spectrum on the three [U.S.] national networks. In the present environment, small-and medium-sized content owners have a great chance of reaching niche audiences. We coined the term "slivercasting" to describe the opportunity for monetizing niche micro audiences.

VA: What exactly is "slivercasting"?

CA: Slivercasting is leveraging lower distribution costs to reach a specific niche and audience. Even these niches can have millions of people, like immigrant or expatriate communities. There are thousands of producers whose programming would never make it into primetime but have highly dedicated small audiences. It is a phenomenon that could be called slivercasting. One example is the clip "Evolution of Dance," which was viewed over 35 million times on YouTube. The Long Tail starts with a million niches, but it isn't meaningful until those niches are populated with people who want them.

VA: Is there a Long Tail opportunity for the big guys, too?

CA: After a hit show airs, it immediately moves further down the Long Tail. We are already seeing hits like Lost being viewed by smaller audiences on platforms other than television, such as video iPods, ABC.com and VCast [mobile phones].

VA: Does the Long Tail theory only apply to the Internet?

CA: The Internet is important because it has reduced the scarcity of distribution to a point where viewers now have inventory on demand. However, this is really about pent-up consumer demand that was too costly to meet. The real opportunity television programming [offers is] unleashing the power of serving people's special interests.

Besides video-sharing sites like Grouper, Guba, iFilm, Metacafe, Revver, Veoh, etc., there are now profitable, specialized video services serving specialties like poker, bicycling, fine wine, horror films, obscure sitcoms and Japanese anime.

VA: Is the Long Tail bringing people together (virtually)?

CA: Instead of the office water cooler, which crosses cultural boundaries, we're increasingly forming our own tribes, groups bound together by affinity and shared interests. These days the water coolers are virtual and the people who gather around them are self-selected.

VA: What does the Long Tail mean for incumbent content creators?

CA: Infinite choice and convenience means we will inevitably watch more television, just as the average amount of time spent watching TV increased with the transition from broadcast to cable to digital. Hit shows will endure but will be smaller in an environment of unlimited choice. We have already seen branded content redistributed to other formats and platforms, such as Saturday Night Live's "Lazy Sunday" sketch, which was seen by exponentially more viewers on YouTube than [on the network on which it aired,] NBC. Niche, user-generated content will have an audience because, in some forro of another, everybody's tastes diverge from the mainstream.

VA: Who will be the winners and losers in a world of unlimited choice?

C.A.: The real winner is the consumer, who finally has a market structure that reflects an abundance of choice, rather than a scarcity of distribution. The value of aggregation, whether through YouTube of Yahoo! or something else, will increase as consumers seek content that appeals to their specific interests. The smaller content producers will also benefit as they finally have access to distribution.