New Long-tail business on media industry

1. e-Business
IMMBA IM626
The Long-tail
Why Media is Racing to the Middle?
19 June 2012
KAIST Business School
Min Woo Kim
Woo Suk Wesley Chang
Clement Andre Pietri

2. What is Long Tail ?
- Article : The Power of Torso TV( Why Media is Racing Chris Anderson Wrote an influential
to the Middle ) book some years ago
- Site : http://torso-tv-why-media-is-racing-to-the-middle/ called “The Long
( Wednesday, June 6th, 2012 by Tech Crunch) Tail” that shaped
http://news.donga.com/3/all/20120528/46578160/1 people to think deeper
http://news.mk.co.kr/newsRead.php? about emerging
year=2011&no=98504 Internet Markets
- Editor : MARK SUSTER
- The Long Tail Model is
# of Sales
based on “Every little penny
saved is a penny earned”. It
focuses on niche market
where consumption level is
relatively low.
- Business may be profitable
since most of the revenue
will be dependent on a few
hit items through niche
marketing.
- Low inventory costs, solid
platform is required
Term Project Presentation IM626 e-Business
The Long-Tail 2 Summer, 2012

3. What about the Media Industry in Long Tail?
 Hits are produced for mass Media Consumption of Curve
audiences
 It was by definition a
“hits driven business”
Physical limitation on both
production AND distribution
produced this hits driven
business that many people
associated with the media
industry.
Head End “Hits” Long Tail “Niche“
Before the Internet After the Internet
• Limited distribution and the cost of • Advent of lower cost production &
limited media Ch are very prohibitive distribution
Book, Music • Shelves stocked with media most • Blending fully electronic systems with advent
Industry likely to sell -> limited consumer new disruptive business
choice ex) Amazon, Kindle, payola (promote your
music) , ProTools( Lower production costs)
• Producers and Distributors to head- • Existing various players including individual
Structure end Market: Monopoly, Oligopoly participant
business
Term Project Presentation IM626 e-Business
The Long-Tail 3 Summer, 2012

4. What about the Online Video Media industry ?
TV and Film Industries used to be the same.
YouTube has done a phenomenal job in aggregating audiences and definitely owns
the long tail model.
But, Netflix, Hulu & HBO Go are coming from
the opposite direction – Head End.
Core Asset
• Has been exclusive windowing premium
contents that people want to consume
• They had to negotiate these rights with
the major content owners – the studios
They need to diversify by either creating or sponsoring
They need to diversify by either creating or sponsoring
new contents development.
new contents development.
ex) Hulu: $500M funding new content, Netflix : :engages in the hit/cult show business again
ex) Hulu: $500M funding new content, Netflix engages in the hit/cult show business again
Term Project Presentation IM626 e-Business
The Long-Tail 4 Summer, 2012

5. The Power of Torso TV (Why Media is Racing to the Middle)
MARK SUSTER believes that videos will eventually race to the middle.
Big Players still think about the next mega hit.
 South Korean Company.
 Viki had come up with a
concept of loading drama
shows onto their website and
Like Viki, Global online built tools for “fan-subbers” to
translating site, streaming translate the show into other
platform languages.
 Turns out that there are a
group of people who enjoy
building status amongst their
friends by translating shows
better / faster as a sport / for
fun.
 People build a sense of
community through knowledge
and accomplishment with like-
minded people online.
• Global phenomenon
• Think about large “niche” international video media for global fans
ex) K-pop, South Korea Drama, Bollywood, Spanish Novelas, British Comedy and so on
Term Project Presentation IM626 e-Business
The Long-Tail 5 Summer, 2012

6. New Long Tail Model?
Total consumption of these torso shows will increase as well as the total
number of these shows being created – creating a much bigger market
opportunity
Revenue Models
are emerging.
Distribution Bigger market
Production Cost
Limitations are opportunity in the
middle zone have plummeted
disappearing
People are
developing Global
Tastes
Term Project Presentation IM626 e-Business
The Long-Tail 6 Summer, 2012

7. Thank you
Term Project Presentation IM626 e-Business
The Long-Tail 7 Summer, 2012