George Lucas buys into the Long Tail

Chewbacca and Jabba will no longer be banking on blockbusters.

"Lucas said he believes Americans are abandoning the moviegoing habit for good."

From the Long Tail Blog:
    From the current issue of Variety:

"George Lucas has a message for studios that are cutting their slates and shifting toward big-budget tentpoles and franchises: You've got it all wrong. The creator of "Star Wars," which stamped the template for the franchise-tentpole film, says many small films and Web distribution are the future.

And in case anyone doubts he means it, Lucasfilm is getting out of the [theatrical-release] movie biz."We don't want to make movies. We're about to get into television. As far as Lucasfilm is concerned, we've moved away from the feature film thing because it's too expensive and it's too risky.

Spending $100 million on production costs and another $100 million on P&A makes no sense, he said. "For that same $200 million, I can make 50-60 two-hour movies. That's 120 hours as opposed to two hours. In the future market, that's where it's going to land, because it's going to be all pay-per-view and downloadable."

 With more than 13000 movies submitted to just the Tribecca Film Festival and only 150 getting real distribution, that's good news for young filmmakers. Distribution will get easier.

But it's terrible news for advertisers. How will you target and deliver a consistant message if you don't have a big channel? It's the same problem that network televison is facing. See Judd Bagleys Connect article and graphs here. 

So where is the paradigm shift? Technology allows more efficient markets and cheap and easy distribution. It is just a better system.

Niches more profitable than hits?

I posted about Nimbles Long Tail here.

I've been reading a lot about the Long Tail and came across this post describing how niche markets are actually more profitable than hits.  From the LT Blog:

But in Long Tail markets, where the costs of shelf space are very low, the niches have the same costs as the hits, and potentially the same profit margins. This explains that last profit bar in this graphic, which is the same as the revenue bar that comes before it.

But I underestimated the effect of lower niche content acquisition costs. The readers were right. The economics of niches turn out to be even better than the hits. Way better, as it happens...

 This Long Tail stuff is killer.

Nimble's Long Tail

It's late and I have to drive up to Layton early tomorrow morning but now I'm wide awake. I often take an hour or so before I go to bed and read CNN.com and a number of blogs I've tagged on Del.ic.ious. Bloggers link a lot and I came upon a Long Tail post that led me to a number of other sites/blogs. Now I can't sleep. I've found the terminology that perfectly describes Nimbles business model. A model that I've struggled to be able to explain to small business owners and potential partners.

Nimble is an aggregator. That is, we're looking to become an aggregator...  Taking all small business and building a marketplace that allows them to sell in real time no matter how small they are. Reading these Long Tail posts has really got me motivated.

I'm posting this as a placeholder while I take some time to think about this. Long Tail Baby.

Long Tail Links:
The Long Tail Blog
Wired Magazine Article by Chris Anderson (Coined the term)
The Long Tail on Wikipedia