There's No Money In The Long Tail of the Blogosphere
In 2004 Chris Anderson wrote an influential book called The Long Tail. In it,
he argued that the future of business is to sell less of more. The main premise is that collectively, things that are in
rather low demand can amount to quite large volumes. This is because there is a large number of people who belong to the long tail and they encompass a wide rage of tastes.
A classic example of successful long tail sales is Amazon. A substantial subset of the book sales for the largest online retailer comes from obscure books. Amazon itself could afford to stock up on rare books as well as offer these via numerous online partners. The net effect is that a lot of book sales occured in the long tail. This phenomenon is captured nicely in a quote from an Amazon employee: "We sold more books today that didn't sell at all yesterday than we sold today of all the books that did sell yesterday."
In a recent post here, we examined the reasons that people feel compelled to blog. From the post and the comments it received, it became clear that quite a few people are blogging to make money. The blogs that they started live in the long tail of the blogosphere, however, and the reality is that it is difficult to make money in the long tail - Anderson's point was that the money is to be made by selling to the long tail, not so much by existing in it. In this post we examine why that is and look at other aspects of long tail economics.
The 80/20 Rule
There is a famous proverb: 80% of the wealth of the world is in the hands of 20% of people.
While we know that the number of super wealthy is probably closer to 2% than 20%, the proverb turns a famouse rule of mathematics, known as power law, into common wisdom.
If you look at the Wikipedia page linked above, you will be blasted with daunting math formulas. Yet, the concept and the explanation of the
power law is remarkably simple - the rich get richer.
To understand this concept lets look at a familiar example - a popular news service called Digg. It is well known that there are power users on that site who are highly influential. How did that happen? Simply - they were among the first users of the service. As Digg grew and people joined, new relationships between users formed randomly. In any network, which has influx of new nodes and random formation of relationships, the nodes that were part of the beginning of the network become hubs.
So behind the seemingly complicated phenomenon, power law, one finds simple concepts of time and randomness. The reason that the long tail forms is exactly the same as why the hubs form - time. As the number of people in the network grows the chances that a new person befriends a specific member drops.
The Traffic Problem
Now imagine that the network is the blogosphere where new blogs spring into existence every day.
And as they do, these newly minted bloggers are aspiring to make money. They set up their blog, pick a unique topic, research Google ads
and affiliate programs, and they start writing content. But they are in for big disappointment, because in order to make money from blogging, they'll need more than good, original content - they need traffic.
Because of the power law, the long tail of the blogosphere is huge and so any individual blog is not easily discovered. That is, the chance that a random Internet surfer will find a blog that is part of the long tail is nearly zero.
Whatever monetization means the blogger in the long tail settled on, be it Google AdSense or Amazon affiliate codes, it can only work on large volumes of traffic. AdSense works for Google because the odds are in its favor - it is aggregating small amounts of traffic across the entire web. The math works for them because it is based on the massive scale of the web. It similarly works reasonably well for the sites with large amounts of traffic, but it fails for smaller publishers who have low visitor counts.
Making Money on the The Long Fail
You can make money on the long tail but not in the long tail. The precise point of Anderson's argument is that it is a collective of the long tail amounts to substantial dollars because the volume is there. The retail/advertising game is a game based on volume. You make money on a lot of traffic to a single popular site or the sum of smaller amounts of traffic to many less popular sites.
What about the companies that count on the long tail of the blogosphere? Since the incentives for individual bloggers are not many, betting the business on the long tail of the blogosphere is risky. This applies, for example, to widget companies that hope to gain massive adoption by enticing long tail bloggers. Perhaps it is possible, but the incentive can not be purely financial.
As long tail bloggers become disillusioned with their revenue potential, the businesses that bet on the long tail of the blogosphere are likely to pay the price. This price is very substantial, since, according to the whole scheme, there is a huge amount of money that is locked across the long tail. So if bits and pieces of the long tail begin to disintegrate and the whole thing collapses, the impact on the businesses built on it would be huge.
Conclusion
It is often forgotten that money is to be made by leveraging the collective long tail, however, making money while being part of the long tail is very difficult. Specifically, in the blogosphere, the vast majority of blogs have very few readers. It is not realistic to expect these blogs to make money. As the enthusiasm and the incentive in the long tail begin to wear off, what would be the impact on the businesses that depend on them? Likely, the impact is going to be large.
Now it's your turn. Please tell us what you think about the long tail of the blogosphere. Is it solid? Or is it in danger of falling apart?
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I completely agree with you when you say that you can make money on the long tail but not in the long tail. We interviewed Chris a couple of weeks ago for Intruders.TV and he seemed a bit uncomfortable when we insisted on the potential pitfalls of the theory.
He said the long tail it's not just about the money you earn, but also about the reputation. Anyway here is the video interview in English with Italian subtitles, in case you want to watch it: http://tinyurl.com/3a6lm7
Consider an analogy:
Between 1980 and 1998:
- 44,000,000 people lost their jobs in the US
OOh, terrible, the US economy must have been really shakey to have that many people drop out of their employment...
But over the same period:
- 73,000,000 people found new jobs in the US
=> 29,000,000 MORE people were working at the end of the period
The long tail's of the blogosphere like that - many, possibly MOST bloggers below a certain threshold will lose enthusiasm, and drop out.
The question is whether they'll be replaced by a newer generation, willing and eager to interact in the same way.
BTW - the same analysis also disproves "The Rich Get Richer"... the ACTUAL answer implied by the Pareto principle is:
"Some of the rich get richer, some get poorer. Others, who previously weren't rich, become rich, but the overall proportion of people we call 'rich' doesn't change much."
... but that's not nearly a good enough soundbite, is it :-(
Mark
[Source for US employment figures: Tom Peters, www.tompeters.com]
I would reshape what this paper says as:
Amazon can make money from the long tail, while authors of "minor" books won't. In the same way, Google makes money from the blogosphere's long tail, but small blogs don't.
A good post - I think the point you emphasise about making money 'on' not 'in' the long tail is crucial.
A few things occur to me:
i) What may be long tail in a general audience is still relevant to a specific audience. As an educational blogger I'm largely in the long tail, but that doesn't mean my blog hasn't led to _some_ consultancy (but not enough to give up the day job), because within a specific audience I nudge up the tail a bit.
ii) Related to this, I argued recently that connections are more meaningful in the long tail (http://nogoodreason.typepad.co.uk/no_good_reason/2007/11/connections-are.html). If I find someone who reads a blockbuster blog then I probably won't have that much in common with them, but if I find someone who reads a niche blog then I will. This is significant because if you are looking within a niche market then you need to find the few connected people. If I want someone to do some consultancy on developing an elearning course for organic gardeners, then the number of people who are in both camps may be small, but I will find them easily because of the connections in the long tail.
iii) In short, you won't make money from blogging, but you might make money off the back of blogging.
I usually refer to the 80:20 rule as Pareto's Principle who observed that 80% of Italys' wealth was held by 20% of the population.
I'll take the example that you cited above about blogs about making money. Many people seem to be trying to follow the examples of Maki (Dosh Dosh), John Chow, and Darren Rowse (ProBlogger) by trying to publicize monetization, blogging, and social marketing techniques. For argument's sake, let's say that these three bloggers are the "experts", although I've probably forgotten about ten times as many other successful bloggers.
I'm guessing that there are hundreds of other bloggers attempting to provide money-making tips to their readers. Some are undoubtedly scammers, some are probably struggling entrepreneurs, some may even be altruists. Who knows?
The thing is, scammers will eventually be caught. Incompetent, though possibly well-meaning "experts" will eventually be ignored. And people with decent skills but limited audience will either transition from the trailing mass to the lead. If it's not too late. Plus, if tastes change or else someone else innovates with an effective monetization method, the little guys must adapt or die.
What concerns me is that you are making a potentially frightening description of pro-blogging as an activity painfully similar to multi-level marketing or network marketing, whereby the people at the top of the pyramid take advantage of the "rich grow richer" rule.
I'm not suggesting that the three bloggers that I mentioned above are doing MLM. In fact, they are more like mentors or examples to their audience. Plus, they have credibility: Maki writes excellent content that has a large audience while the other two gentlemen give their readers insight into how they make money.
I'm not really in a position to argue whether or not the long tail of the blogosphere is solid or unstable; I'm too new to the game. All I can suggest is that as long as people can meet the needs of the "long tail" AND make themselves known in the process, SOMEONE can earn money from it if they understand those needs, adapt as they change, and fulfill them.
Another excellent post, Alex!
A vast majority of the people that are blogging in the long tail don't want to make money using this tool. Or do not see it as a revenue source.
Also, I really take umbrage at the assumption that all blogging is for money. There's a great deal that can be accomplished with a blog beyond making money that can trigger other outcomes.
I think the long tail of the blogosphere is really solid, because people know that it is really hard to make money from blogging, and they are doing it only to express themselves, to be popular, to create trends and to share information.
The big winner is the regular blog reader, who has more options, and can choose reading blogs that offers him the information that he needs. And the other winners, this time in a financial way, are those who take advantage of the long tail, and offer services for the bloggers (widgets, or blog publishing systems), or for the readers (by helping them to find interesting blogs).
Regarding: 80% of the wealth of the world is in the hands of 20% of people, I think 5% is the top of the society whereby they hold most of the cash.
In Donald Trump's book, in the future, there would be only the rich or poor whereby the middle class would shrink into extinction.. while the present rich people would get even richer! Perhaps there would be a trillionaire in the future?
Thanks for the great post about the long tail. All of those who are not in the top 2% need to somehow create a new formula to gain wealth by manipulating the wants and needs of the top 2% and take their money.
Dear Alex
Sure, I'm just your average lawyer entrepreneur real estate investor web2 evangelist bankruptcy blogger with a Mac, but I long before people were calling it the 'long tail' I had to find niches-within-niches to level the playing field against better funded rivals competing for limited resources. Is that the long tail or just the result of relentless competition? Or are they the same thing?
Thanks for your input.
This is more about business models and power. If a business model focuses on supplying services of limited value to a huge number of customers, it would have a chance making money from a long-tail focus. However, this business would need a significant amount of clout to get this off the ground. The long tail, depending on where you slice it, is heavier than the head, and requires a larger amount of power to shift it.
Imagine it like inertia: to get the thing moving, you need enough energy to shift its initial state. What this means for the business is that only a model or platform with enough clout can really enter the field at this stage.
Startups seeking to expand into the long tail would need to be building on existing revenues, just like Amazon did.
Alex,
One point you fail to mention is that profitability on the long tail only works if distribution costs are low.
That is way retailers like eBay,Google and Amazon all really benefit from the long tail.
The long tail will not work for Barnes and Noble or Wall-Mart for instance due to physical nature of the distribution medium and cost to transport these low volume goods to the stores.
Regards.
Augustus
Curation rather than creation is a method of building a business within the long tail - for example a network of blogs aggregating content on Eco Travel or Dance Music. As a collaborative network you are better able to sell advertising across it than as an individual.
Surely the next iteration of web commerce must be aggregation and filtering? When anyone can create a shop and sell goods, how do they get discovered?
Despite the blog network example I'm not an advocate of ad based business models, when did we all expect everything for free? Would I pay $1 per week to have access to a filtered 'Best of Web on Travel etc', where the content creator shares in the revenue alongside the person who discovered the content? Yes, in an increasingly spam heavy world, the return of the subscription model has validity. When everyone can publish how do we know what is worth reading in a world where time and attention span are under constant assault?
The focus of the conclusion is on blogs. But a blog is just a type of website isn't it? Nowadays many blogs function as what used to be called "a homepage". Will the number of websites decline? I don't think so.
People will always seek information and stuff to read. If the source is found in blogs or in media called something else there will always be ways to monetize. I think the number of people in the long tail to make money on will always grow, as long as the population of the planet does.
Thanks for a good read!
I think your article is a good wake up call to the thousands of bloggers who thought they would get rich in a sea of blogs. I can only imagine the late-night infomercials and weekend sales pitch meeting in hotels focused on people desperate to strike it rich – where 99% of the sell is really snake oil.
Indeed, the only way you can make money from the long-tail is to not be a part of the long-tail. Making money from the long-tail simply takes frequency, quality and good search marketing (link building). I actively run SEO campaigns and use tools like Raven http://ravenseo.com to help me keep track of my link building and how my blogs are doing in search engines.
The longtail of the blogosphere will collapse for these reasons:
1. Many bloggers are in it for the money. A huge wave rushed in when people like Rowse, Pavlina, etc. started writing about the hundreds of thousands of dollars they make blogging.
This was realistic for early entrants, but with the influx of competition it is becoming less likely by the day. The tail is so skewed toward the short end, that even sites with several thousand RSS subscribers don't make much money.
Most bloggers never have a chance. Blogging is a bad way to make money and people will soon realize this and quit.
2. The people that do it for reasons besides money are presented with new opportunities every day that give them the same benefit without the hassle. Twitter, Facebook, etc. are all allowing people to share the same things they would blogging, except they are already linked into a network.
It's so nice to read a blog of substance for a change!
I think that Alex has a valid point about the trouble of making money in the long tail, but Adam's concept sounds like a new business opportunity within the long tail of blogs: If the individual running a blog cannot capitalize on the individual blog, an ad-broker cultivating an eco system of thousands of blogs could. The broker signs contracts with the advertiser, and maintains the ads across the eco system. Bloggers could get a fixed income from the broker, who spreads the risk (of paying a fixed income) across the entire eco system. Does that make sense? Any VCs willing to invest? ;-)
Depends, if you are blogging for money, you have to understand this is not a get rich quick scheme, which means the disillusionment phase is particularly harsh, and leads to an abandoned blog. I make maybe 500 dollars a month from blogging, I would like it to be more, so that I could be independent, but I also know that this is a matter of the long haul, not necessarily the long tail.
I think a lot of folks get sucked into blogging because they think it is a get rich quick scheme. Not that they are really interested in exploring some niche, or want to contribute to the community.
Most of the long tail depends on what the real reasons you blog are. Most "labour of love" blogs do ok, most get rich quick blogs, well they peter out. The continual churn can be difficult to manage, but being persistent pays off. That is probably the message that more "get rich quick from blogging" schemes need to make people more aware of.
I think any blog making money qualifies as a "long tail" success (not online publishing, but a blog in the more traditional sense of the word). I think people who get into blogging to make money from the long tail (a) don't understand the long tail and (b) are blogging for all the wrong reasons.
The long tail is still about volume and cost. If you can find enough volume, with low distribution costs, there is the potential to be successful. The entire point is that the web enables you to reach consumers that would be impossible to get to otherwise because the cost/return would not be worthwhile in a brick and mortar world. Because the additional costs are relatively low, or there is enough volume in one or more segments away from the head, there can be good business reasons to build a business there.
Just my very watered down $.02
I agree with the comments above who point out that the way to make money in the Long Tail is to aggregate volume, exactly as Amazon does.
For instance, a blogging network, like B5Media, can make money from a long tail of blogs.
But one individual blog in the long tail will make very little money. The incentive is to either rise up the tail to become a prominent blogger, or to benefit from the interaction and networks you can now reach.
One issue is that monetising 20,000 or 200,000 or 2,000,000 or 20,000,000 hits per month are different techniques. Niche rents can be high if the niche reader is high value.
Great post. This is great insight and analysis. Thanks for a post with original thought. It's very refreshing.
Chris
People blog expecting to make money? How dumb is that? Blogging is about ideas - rip, remix, feed forward. I don't make money off my blog, nor do I expect to.
so what you're saying is, the blogoshpere will eventually collapse after dissilusioned bloggers like me realise that there is no money to be made in blogging afterall? i totally disagree with your theory its justa "long tail".
I think a lot of what you say here is true. However, I do believe some of the most successful and fun blogs are those from people who are passionate about what they blog about. The money, while never a lot, follows.
Three words: Networks and revenue-share.
Alternately known as "strings woven together are stronger than the sum of their parts". Twenty blogs on a variety of topics that get 10k unique visitors/day each aren't worth as much as a blog network on a variety of topics that gets 200k unique visitors/day total. Managing a network to create a circle of different but related blogging topics allows you to use blogs with topics that are interesting but don't have companies paying high-value ad prices to drive more traffic to blogs in your network that do.
For instance, a cooking blog offers great tips on recipes, techniques, grocery savings, etc. But let's say there are few ads for cooking topics. So the blog network that invites the cooking blog also invites a parenting blog and a productivity(Lifehacker-like) blog. Now, mothers brought in by the cooking blog are more likely to visit the parenting blog if they're a nuclear family mom, or the productivity blog if they're a single working mom, both of whose topics have plenty of ads available.
Thanks to the network's revenue-share, the cooking blog gets a good chunk of the change it couldn't have gotten from selling ads about its own topic, as well as the fact that being part of a network makes it more likely for the cooking blog to be discovered by someone that wants to make them a cooking TV show or book offer.
Alternatively, skip ads and sell memberships to the network that gets you premium content, like video podcasts. A blog that produces 1 video/week on a topic won't make much selling memberships. A blog network that produces 20 videos/week on a variety of closely-related topics has a much better chance.
I also disagree that there are wild hords of people thinking they are going to get rich by blogging.
1. Many blogs carry no adds whatsoever
2. There are other ways to make money from a blog other than Google adwords
3. If I am in the long tail as a book author on Amazon.com, I might not be getting rich, but I am making *more* money than I would without Amazon.com
4. If you are using ads, one good post and consistently decent content can have a long term impact. Not enough to retire on, but enough to break even on hosting costs.
5. The old adage of the "Internet routes around stupidity" has a flip side: It routes to brilliance (even if brilliance is occasionally found in the extremities of stupidity) sometimes that takes a while, but it does happen.
Did you write Long Fail on purpose? It was kinda funny.
My take: The value that a blog creates for the individual is rarely monetary. It is more likely to be in the network of trust it engages the writer in, in the introduction to new ideas this process enables, in the discovery of the power of the network the blogger learns - and what he or she subsequently does with this new knowledge.
There is (potentially) a lot more value in a new idea, a new association, a new connection, than there is in a few google adsense clicks.
I don't carry ads on my blog - not out of snobbery, but because I'm not aiming for a mass audience, so realise the weakness of the model.
I do aim to connect with the right people through what I blog. And in this it has been immensely successful.
We must stop thinking about the value of blogging in simple ad dollar terms.
Those of us who take this view aren't about the quit blogging any time soon. The long tail will continue to grow.
Since the long tail / pareto / power law distribution is so universal it is valid for many domains like open source projects, email communication, the blogosphere and amazon.com.
If marketing people will start to understand this and technology provider will make use of small-world networks there will be a profitable long tail in less obvious networks. I'm quite sure that the reading ratio for readwriteweb blog entries somehow follows a power law.
The future challenge will be to predict which nodes in which networks will move in which direction, upwards to the head or downwards in the tail? And where are the tipping points?
Fun is the key to marketing and breaking into the long tail, plain and simple.
More here:
http://www.jimkukral.com/fun-is-the-key-to-marketing-to-the-long-tail/
The long tail will remain. But the moneymaking part of it from ads is another question. Maybe those in the long tail will find other moneymaking techniques than just the ads?
The long tail has many things going for it-- it's extremely flexible, negligible cost and negligible competition, and for most it's the only entry point, whether their goal is to rise up to the front of the curve or stay in the tail.
The possibility of success is a huge driving factor. Think about rock stars, movie stars and professional athletes. Horrible professions unless you're successful, but it doesn't stop a ton of people from trying for a while. If time and randomness are factors, well we can't control randomness but we can control time but sticking around in the long tail for a long time.
Being in it for the reputation is equivalent with being in it for the money. If you don't see actual money transferring hands it could be happening more obliquely, or it could be that someone hasn't figured out how to monetize it yet-- it does require different strategies in the long tail, and there's nobody around to throw more money at the problem. But there are a lot of bright individuals coming up with personal solutions.
Reading through the comments it looks like the Tail has spoken. We blog for our own reasons. It's not about the money.
That is strange because I do make money, and its almost enough to pay my house off, a little more work and I will be there. So some bloggers actually do make money.
Alex, for the first time, you have got it wrong. The longtail aspect in blogosphere comes not from the money but from the knowledge point of view. The longtail of blogosphere offers more knowledge than the knowledge available in the "hit" area. Talking about money in the longtail will make sense only if every blogger is there to make money. You got it wrong buddy :-)
I'm not sure whether I should agree strongly or disagree strongly.
On the one hand it's very had for an individual blogger in the mid-thick/long tail to make money. On the other hand, that's where we make 80% of our money, and see 90% of our growth.
Considering make 2M/year largely off the thick-mid tail, you'd think I'd strongly disagree... I think the reason I agree is that because we own so many "thick-mid" blogs, in aggregate we're much farther towards the head of the tail than the blogs would be on their own - so we benefit enormously from ad deals that evade 99.999% of bloggers.
Oops. replace knowledge with information in the above comment.
Just as with all generalizations, they are all useless.
Long tail value is all about the quality of the long tail network, and the site aggregators generating a compelling offering, not blanket long tail content activation.
There are many many good blogs out there in the long tail with dedicated useful followers. Aggregate them together, rate their traffic, and then compare them to the fat belly properties. Just because a blog has few readers, doesn't make it insignificant or un-actionable. Better knowledge collection and activated targeting will make this long tail compelling. Just because we don't have this yet today, doesn't mean the long tail of blogs are forever useless.
I am happy with my 90-200 readers over the month that read my specialist content. There has never been a better self publishing medium that encompasses the written, audio, video, etc. for the self publisher in the business of providing expert services.
Think what it was like before: Printed materials, Web Sites that needed cumbersome updates for a serialized format, and horrendous media wrangling.
We have come a long way. The are models beyond advert monetization, and if your traffic build to such a point, go have at it.
In my mind, the Long Tail of the blogosphere is a pretty egalitarian place. It's where the people live, and it's a pretty robust loosely knit community. I think it's cohesive, and I don't think it's about finances despite the responses of your previous post. Services like Livejournal/Vox and Flickr are populated with people with interests other than financial, most of which centers around community.
Seems to me there is a huge opportunity for creating services that strengthen the Long Tail's cohesion in financial terms.
I think #11 had a good point about it being difficult to start a business on the long tail. Amazon didn't really start off making most of it's money from the long tail, it worked into it using money from selling the most popular books for less.
However, it seems that AdWords (not AdSense) from Google was a long tail success from the beginning; basically any small business could buy any search result.
Sturgeon's Law
Talebs book 'the black swan' gives some great insight
to the 'long tail' situation. its the "understanding
media" of our time.
Great post here, though traffic and blogging are new enough and dynamic so I'd suggest we don't really have enough data to know how it all will shake out over time.
You note this likelihood:
the enthusiasm and the incentive in the long tail begin to wear off
But this opens an opportunity for those who stick it out. If persistent long tail bloggers become the most authoritative in their niches, their content will have high value to advertisers. Bloggers who blog without much hope of profit often are *better* and more authoritative. As the money-focused folks drop off in favor of "passionate experts", highly focused expert content streams develop in the long tail, and are likely to create substantial advertising value.
... but I don't recommend bloggers hold their breath while they type and wait for this to happen ...
I'm finding this out the *hard* way. I've just launched a blog to try and get in on this "long tail" action and am finding out that everyone is like me when it comes to clicking on ads: Ewww! I'm not clicking on that!
I guess I may have to rely on some Internet trickery to get in on the money making path. AdWords seems to be a way to do it but I think I want to get some cash flow in place before I experiment with this gamble of words.
I don't think that the long tail of blogs really have that much of an impact on business, so I don't agree that their demise would really hurt anyone. Most are making money by way of ad networks, and really, ad networks will find properties anywhere. It is and will continue to be very hard to make money for everybody online, not just the blogs, and that's in part because traffic can and is gamed, and metrics are not accurate, and advertisers are reluctant. On top of this, there is enormous ignorance about what constitutes good traffic, size, etc. - advertisers and everybody else are a long way from grasping this kind of stuff.
There's been a ton of reports about this kind of stuff - I'm surprised that people are only just starting to realize how hard it is and will be to make money. Maybe covering the every breath and move of Facebook has everybody looking at the wrong stuff :)
Blogs that want to be businesses should see themselves as - and operate like - media companies. It's the only chance, in my personal opinion, for real survival in the market. That means smart structure, good management, the right kind of writers that fit the audience, caution in practices, etc. I've never ran my company StyleDiary like a blog, even though it started as that, and I would say it's been pretty successful :)
A new blog can become successful in one of two ways. 1. It hits a social media site like Digg big time and becomes an overnight success, or 2. Spend a great deal on ad networks like BlogAds and verticals reaching the audience appropriate for your subject matter.
Either way, a successful blog must have a specific and unique voice and produce great content regularly to maintain a consistent audience.
Esvl, in case you can pay your house off a blog without a single banner, you are a magician ;)
My understanding of the curve as stated before on http://www.felgner.ch/2007/11/th_long_tail.html for this case (ad revenue of bloggers):
The abscissa is the number of bloggers, one standing next to the other, sorted by their ad revenue, Michael Arrington somewhere upfront, myself completely to the right.
The ordinate is the ad revenue of a single blogger.
Imagine my authority in the blogosphere would grow, then I would simply move to the left in the curve, my revenue above me. And the other way round. Positions of all bloggers relative to all others changing constantly to keep them sorted by revenue.
Now we have two variables here which could change for whatever reason, the number of bloggers and the total sum of ad money spent.
1. Ad money spent is the area below the curve.
- In case the sum remains constant, my gain might be Michael's loss. And the other way around.
- If ad money increases, all or a few could win. Ad money decreasing, all or a few loose.
2. The total number of bloggers is how far the curve extends to the right. There is a shear infinite potential of zero-revenue bloggers to the left who do it for fame or fun and who do not contribute to the area below the curve.
- If people join and want to make money, someone will loose unless total money spent increases at the same time.
- In case people leave and the money spent remains constant, someone will gain market share.
Now here come those making money ON the collective long tail, the widget-makers, the access providers, the telcos, etc. They are not depicted in the same curve! And as we have revenue on the ordinate and not profit, the tail does not cross the abscissa as a consequence. We cannot deduct the widget makers revenue from any area below or above that curve. What is clear though is that those widget makers depending on those leaving the game will loose their business model.
But as at the same time the number of zero-revenue bloggers might as well exceed those leaving, predictions of what will happen are unclear. Everyone has some expenses adding up in another long tail curve depicting widget revenue versus number of widget makers.
"It is difficult to make predictions, especially about the future."
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