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By Carl Howe

Stephen Bryant over at asks the question of whether the stunning box office success of the latest Pirates of the Carribean movie from Disney (NYSE:DIS) disproves the thesis of Chris Andersen's book released yesterday, The Long Tail: Why the Future of Business Is Selling Less of More. He particularly notes John Cassidy's review at the New Yorker where he calls the long tail theory into some question:

Cassidy notes that unlike the music industry, where none of the top 25 albums in American history have been released since 2000, seven of the ten all-time top-grossing films worldwide have come out since that year: three "Lord of the Rings" movies, three "Harry Potter" movies, and "Shrek 2." Both the "Da Vinci Code" and X-Men III" did well despite bad reviews. Movie blockbusters seem to be increasing in frequency, not decreasing.

So which is it? Do American consumer dollars vote for a hit-driven economy or a long-tail world of choice?

The key to the answer is how any particular market deals with what Blackfriars calls the tyranny of too much -- the paradox of overwhelming choice actually reducing purchases and commitments.

One point that was missed in both Cassidy's review and Bryant's critique is that the commercial movie theater industry doesn't really give you enough choice to drive the tyranny of too much and the resulting long tail effect. It's a physical market. When you go your local multiplex, you can choose from 15-20 movies to see, but you can't see the latest from your favorite Chinese director. Studios and distribution have reduced the number of choices available to you to only a few. Since you only a handful to choose from, you get smash hits. No long tail exists at your local multiplex, since choices are limited. And that's no accident -- the movie studios constrain and manage their release schedules to guarantee that there aren't too many choices for you on any given weekend.

But that all changes when you get to DVD releases available at Amazon (NASDAQ:AMZN) or NetFlix (NASDAQ:NFLX). There, there are roughly 60,000 titles available. And while blockbuster titles do well, the long tail effect becomes significant, because people aren't constrained to just a handful of titles. Suddenly, there's big money to be made on the 1952 Complete Adventures of Superman as well as the latest theatrical release.

But what about the tyranny of too much? Doesn't that have an effect too?

Absolutely. If Amazon or NetFlix gave you 100,000 titles to browse through without any guidance, you would never see Pirates Of The Carribean-like hits. Even with great products in the list, most people would never bother to wade through them. They'd be overwhelmed.

The big difference in today's new eCommerce solutions is that we have both marketing and technology that helps us manage the tyranny of too much. Amazon, for example, regularly updates its best-selling list, which many people use as a recommendation for which products to buy. It also makes recommendations about what other customers also bought when you buy one. Similarly, it encourages customers to write their own recommendation lists for others to browse through. In short, they have created diverse social networks to navigate the tyranny of too much choice and make it manageable. But the fact these networks are diverse and not controlled by a few movie studios means that you get a sales list with a very long tail.

So the next time someone tells you the blockbuster hit is dead, you can point them to Pirates of the Carribean. But at the same time, note that the movie industry has been one of the biggest opponents to digital distribution of their movies. And the reason for that opposition is clear: The moment they embrace unrestricted digital distribution, the blockbuster hit is dead, and the long tail will rule their market.

Source: Why is Disney's 'Pirates of the Caribbean' a Hit in a Long Tail Economy? (DIS)