I am reading author / Wired editor Chris Andersons blog about his interest in the Long tail economy. Chris wrote recently about a report from Bear Sterns that focuses on the effect on the long tail economy in the entertainment and media industry. Wow! Not only is it proving that niche business is bigger than box office boom business in the long run – it also brings a fresh view of how different businesses are affected by the digital way of life and our change of behaviours because of the shift in technologies.
What I find interesting is if you try to see the implications of the forthcoming transition to digital TV in the long tail context. The shift from analog broadcasts to digital is a great effort in many ways. But its a one time special event. Many households have to install a converterbox with the TV. Today the choice of converterboxes are very limited in the US. There isn’t a single converter box on any retailers shelf today. A flood of boxes are to await. There should be, since 30 million households will need more than one probably two or three boxes to get their TV sets going.
But a converterbox will come with different features. Today in the US there is not a single article in media about differences between converterboxes. That is understandable. There are no boxes to report about. The market will certainly develop over time and different needs in TV-land will have to be met converterboxes with different features. This might sound obvious. But think about the long tail of business that retailers will gain from the transition to digital TV. New generations of converterboxes will be out in stores just about every 6-12 months. With new features and offcourse price-tags – both higher and lower that the first few boxes. This will in manyways make a long tail economy for the retailers. On the otherhand the long tail economy is about the limited shelf-space compared to unlimited in the digital world.
TV viewers in general will probably be content with some more digital TV channels that the transition will make possible. But in the long run the change might look very different. The change from analog to digital TV is merely a shift of the way TV are distributed – from analog to digital. But over time many consumers will make a more fundamental shift. From using a limited amount of channels to infinite.That is if and when digital TV is received via a broadband connection instead. Today the web flourishes with new video feeds and tomorrow the flow of TV or mediaflows will be mainstream media.
I think the shift to digital broadcast TV will make the general consumer more aware of the new possibilities to watch TV. Because retailers will be loaded with different choices for the consumer to make. When they enter a store to keep their TV going even after the transition. It will be interesting though to follow the long tail economy that might be fueled by the transition to digital TV. And that is a whole different tale.