The demise of niche marketing

[20 October 2006]

By Rob Horning

Via Mark Thoma comes this essay by economist and frequent NY Times contributor Hal Varian about the effects the ease of video production and distribution will have on entrenched old-media interests. Obviously YouTube makes it easy to distribute videos, made with increasingly cheap DV technology, to anyone who might be interested, and the fact that Google now owns YouTube implies that searching the morass of clips will only become easier. Such clips are at the far, far end of the long tail, sometimes produced and distributed for an audience of friends and family. Those who make these clips of themselves lip synching or of family birthday parties or what have you probably don’t expect to make a living doing it, so the practice wouldn’t seem to have any impact on commercial video producers. But Varian explains the impact in terms of Ricardo’s notion of economic rents: He points out that the salary of such stars as Tom Cruise “depend on the fact that large numbers of people will pay to see his movies. If, in the future, these people spend more time on YouTube and less time going to movies, Mr. Cruise’s compensation will probably fall.” In other words, Cruise’s salary doesn’t determine the cost of producing movies any more than land rent determines the cost of producing agricultural products; its vice versa. And what YouTube does is provide an easily accessed alternative that redirects some of our attention away from Hollywood and toward (for better or worse) videos of our friends’ children and pets, or toward amateur filmmakers doing things so outrageous or clever that our friends forward them to us. Writes Varian: “Economic rent comes from scarcity. It is true that there is only one Tom Cruise, but it is equally true that there are only 24 hours in a day. The more time young people spend watching Lonelygirl15, the less time they will have to watch Mr. Cruise.”

The same seems to apply to music—the easier it is to make music with computer recording and editing software and distribute it via social networking tools like MySpace, the less pressing it is to consume Vivendi Universal’s product. Social networks among youth are often knit by shared tastes in mass-media product, but the technological infrastructure is falling into place to permit them to become self-sustaining communities in terms of culture, to become virtual equivelants of what you used to see with small-town hardcore scenes (the kind of thing Maximum Rock and Roll once chronicled).

That’s not likely to happen, however, since particpation in mass events seems to provide a vicarious satisfaction of the yearning for massive amounts of attention—the same function that network reality TV seems to serve. (We also seem to want to belong to a zeitgeist that transcends our small communities; perhaps this could change.) Varian suggests something similar when he echoes the prediction that the effects long-tail distribution will ultimately squeeze semipopular, middling culture: “Those actors, writers and directors who do not command the big audiences may well find it hard to compete for attention with the video blogs. True, the videos available there are often sophomoric. But there will always be sophomores to watch them.”

What this may indicate is that the middlebrow, not-quite-popular stuff had been serving a placeholder function, it served to replace the community feeling that was decimated with the spread of television and the atomization of suburban America. In other words, semicommercial indie rock, independent film, literary fiction, little magazines and the bookstores and concert halls and coffeeshops which supported and distributed such materials were the product of alienation within a specific sociohistorical formation. The niche such stuff served may be vanishing, as niches themselves become so specific as to dissolve into wholly sui generis idiosyncratic scenes made up of friends connected technologically. The Internet (perhaps only in my Utopian fantasies, and in the face of the reality that in consigns individuals to sit alone facing a screen) is militating against that isolation, offering people sophisticated means to connect and to produce the kind of cultural material with which to facilitate bonds unique to the group they are in the process of creating with one another. Bands, writers, directors who might have broken out to small-time success may now never escape from the small group of personal friends they work to please, unless they manage to convince mass marketers that they can take their productions to that level, and make the sacrifices and compromises of impersonality and ideological conformity that such a leap requires.

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