Misses Can Make Money Too (for the Company, that is).

James Wolcott:

Unlike political pundits, sports guys have to know their stuff and be able to back it up on cross exam; whereas William Safire and Andrea Mitchell can spin cobwebs every time they speak without losing oracle status. Meet the Press had a political panel this weekend that looked like a poker game for mummies.”

Jonathan M. Katz on singling out political protesters for arrest as terrorists:

The third and perhaps most troubling aspect of this conviction was how easily the threat of terrorism overrode concern about Bursey’s First Amendment rights. Because this is the “age of suicide bombers,” the Secret Service should have latitude to get rid of anyone suspicious who is standing near the president’s route, Marchant said. Fair enough. But Bursey could only have been singled out for suspicion by one thing?the slogan on his sign. Even allowing the strange notion that the Secret Service expects terrorists to begin their assassination plot by carrying a noticeable antiwar placard, it’s enough to make anyone with a dissenting view think twice before deciding to stand out from a crowd.

Chris Anderson on how online recommendation services have broadened the appeal of less popular content.

To see how, meet Robbie Vann-Adib?, the CEO of Ecast, a digital jukebox company whose barroom players offer more than 150,000 tracks – and some surprising usage statistics. He hints at them with a question that visitors invariably get wrong: “What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?” Most people guess 20 percent, and for good reason: We’ve been trained to think that way. The 80-20 rule, also known as Pareto’s principle (after Vilfredo Pareto, an Italian economist who devised the concept in 1906), is all around us. Only 20 percent of major studio films will be hits. Same for TV shows, games, and mass-market books – 20 percent all. The odds are even worse for major-label CDs, where fewer than 10 percent are profitable, according to the Recording Industry Association of America. But the right answer, says Vann-Adib?, is 99 percent. There is demand for nearly every one of those top 10,000 tracks. He sees it in his own jukebox statistics; each month, thousands of people put in their dollars for songs that no traditional jukebox anywhere has ever carried. People get Vann-Adib?’s question wrong because the answer is counterintuitive in two ways. The first is we forget that the 20 percent rule in the entertainment industry is about hits, not sales of any sort. We’re stuck in a hit-driven mindset – we think that if something isn’t a hit, it won’t make money and so won’t return the cost of its production. We assume, in other words, that only hits deserve to exist. But Vann-Adib?, like executives at iTunes, Amazon, and Netflix, has discovered that the “misses” usually make money, too. And because there are so many more of them, that money can add up quickly to a huge new market.

Anderson is right here ..to a point. Tastes have certainly broadened, and that is good for everybody. But what about artists? If the impact of this broadening is that midlist titles or DVD’s or CD’s have make more money and if retail stuff gets discounted or remaindered fairly quickly, how then is the artist supposed to profit? When a book or DVD is available for sale on amazon, amazon makes $4 for postage and handling, plus the transaction fees negotiated with the seller. The seller makes money too, and indirectly the publisher does too. But for the artist, nothing, because the artist is not a party to the transaction. Even with a more enlightened audience, the artist still gets screwed.

This suggests to me that artists have an interest in directly negotiating wtih content aggregators and having full control on the aggregator’s ability to discount the price. Time will tell if so-called innovators like Amazon will accelerate this trend or continue to offer insurmountable discounts to big publishers.







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