Long Tail slowly eroding…

When I first read Chris Anderson’s article on Wired a year or so ago, I found it very thoughtful and useful for putting things into perspective.  Then everyone I met in the investment community starting ranting about the long tail, much in the same way everyone quoted “The World is Flat”, as if Friedman discovered China –

As in most brands, however, the “Long Tail” can suffer from over exploitation.  I recently borrowed Anderson’s new book from a friend – made me recall my days writing literature papers in college; convering it from a draft ot 500 words to 1500 to fulfill the requirement.  Worse, the effort put an otherwise thoughtful piece into the spotlight; getting the level of scrutiny it cannot withstand. 

Personally, I believe the Long Tail phenomena will, in the end, destroy value (as measured in profits).  If we apply Porter’s 5 forces, the onset of the Internet reduces the attractiveness of the media/entertainment industry by weakening the barriers to entry and thus increasing rivalry.  Yes, the long tail will contribute more value over time, but I suspect it can hardly make up for the value destruction at the other end of the specturm. 

The industry will undergo a painful but necessary restructuring period – which, I suspect, will be a good thing for consumers.