The Long Tail theory- Chris Anderson

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Chris Anderson looks into how the distribution industry is cutting the niche industry short, and how stores are becoming replaceable due to the increase in popularity from online stores such as Amazon and Itunes.

Due to the amount of films being made yearly, there is not enough space or time for them to all be shown in media complexes such as Cineworld. This then leads to the distribution channels deciding what they believe will be the "Big Hits." Thus making the niche market lose out to big films and start to become unattainable to the mass public.

However, due to the increase of the internet channels and shelf space, niche films can now be more widely accessed. This can be shown via the online music industry as for example, Rhapsody holds approximately 1.5 million tracks whereas a conventional retail store such as Walmart can only hold around 25,000. This benefits the niche market as 40% of the Rhapsody infantry is not available in traditional stores due to lack of space in mainstream stores, for the niche market.

As the internet channels and shelf space are increasing this helps the niche market to expand and grow. The above diagram reveals the extent in which the distribution market is missing out of the niche industry and potential profit, this is shown by the shaded pink area. Before the niche industry grew the distribution market could afford to ignore and look over the niche market as they saw it as not profitable, however due the growth of shelf space, there is now a market for niche products.

We believe that the mainstream products become such big hits, for the mass public, in comparison to niche products is down to lack of advertising and funding. For example, when a film directed by a proclaimed director or producer and has a large amount of funding plus proclaimed actors, the distribution market pushes advertising and will try to get as much profit out of them by promoting the films a lot more than they will promote thought provoking and interesting low budget niche films.

Harry Potter and the Deathly Hallows Part 1
Production cost - reported as $250 million (+ $150 million in marketing)
Cinema screening - midnight showing played in 3,700 theaters (U.S alone), widest release - 4,125 theatres
Ticket sales - $24 million from the U.S. and Canada midnight showing alone
DVD sales - ?

Y Tu Mama Tambien 2001


Box OfficeBudget: $5,000,000 (estimated)Opening Weekend: $408,091 (USA) (17 March 2002) (40 Screens)Gross: $13,622,333 (USA) (28 July 2002)
They made $8,622,333made nearly 2 times what they paid to make the film
These figures agree with Chris Andersons theory.