'Long tail' shooing off megahits

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The age of the blockbuster is over, Wired magazine editor in chief Chris Anderson told a packed room of NATPE attendees Tuesday during the opening session of the conference.

Anderson, who delivered the keynote address at NATPE's 2007 Conference & Exhibition at the Mandalay Bay Resort, said that the ever-increasing number of outlets where consumers can access entertainment as well as the growing amount of content available have led to fewer blockbuster hits. That theory is the basis of Anderson's recent best-seller "The Long Tail: Why the Future of Business Is Selling Less of More."

"You don't have megahits anymore," Anderson said. "The blockbuster is a diminishing part of the market as demand is distributed around a vast amount of products."

For example, he said, the sales records set by 'N Sync's 2000 album "No Strings Attached" — it sold 1 million units in its first day and more than 2 million in its first week — will never be broken.

"Radio listening is declining, and (the record industry) is competing with cell phones and iPods," he said. "It's also competing in a fragmented market. There is no playlist creative enough to be able to satisfy the demands of a mass broadcast audience."

As for what that means for television, Anderson cited research showing that the percentage of viewers watching top-rated shows has steadily decreased since the 1950s, when 70% of households were watching "I Love Lucy" compared with 20% for "CSI: Crime Scene Investigation" today.

"As you get more and more channels in the average home, the average top 10 show rating falls," he said. "More TV is being made than ever before, and more people are watching than ever before, but because of fragmentation, the hits are less hit-ty."

Anderson also noted the success of user-generated site YouTube, saying that Barry Diller was wrong when he said that "people with talent won't be displaced by 18 million people producing stuff they think will have appeal." In fact, Anderson said, videos on YouTube are generating "network-sized audiences for the kind of content that TV isn't making. … There's going to be a battle between these two markets."

Following Anderson's keynote address, a panel of industry leaders discussed Diller's comment as well as the challenges raised by digital platforms, ranging from how to monetize online content to the appeal of user-generated video to guild concerns over compensation for content posted or streamed online.

"User-supplied content is going to have a place," ICM vice chairman Robert Broder said. "The audience still wants good storytelling and professional performances, but I think (user-generated content and professionally created content) can exist side by side. Barry Diller was not wrong, but there are expectations (for quality of content)."

Bonnie Hammer, president of USA Network and Sci Fi Channel, pointed out that emerging content platforms as well as the proliferation of DVRs are going to change the way networks work with advertisers. She said the industry might return to the days when a program would partner up with a single sponsor, with the difference today being that the sponsor's product would be promoted across multiple platforms in conjunction with the program.

"We're going to have to take risks to understand what advertising models can work and to find out where consumer engagement really is and how to monetize it," Hammer said during the panel discussion, which also included Anderson, former AOL chief Jonathan Miller and Generate partner Jordan Levin.
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