http://www.nytimes.com/2014/02/23/busin ... .html?_r=0
see link for more.It’s clear that the lives of many creative artists are being transformed by digital technology. But competing schools of thought cite the very same technology in support of strikingly different conclusions.
One group, for example, says the ability to widely distribute the best performers’ products at low cost portends a world where even small differences in talent command huge differences in reward. That view is known as the “winner take all” theory.
In contrast, the “long tail” theory holds that the information revolution is letting sellers prosper even when their offerings appeal to only a small fraction of the market. This view foresees a golden age in which small-scale creative talent flourishes as never before.
These dueling theories strike close to home. My personal intellectual bets have given me a strong rooting interest in the winner-take-all view. But even the most flint-eyed economist has a romantic side. That part of me wants the long-tail outlook to prevail, and not just because of its hopeful message for underdogs.
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Some blockbuster movies can be mediocre in quality. But those like “The Godfather” show that popularity and artistry can go hand in hand. Paramount Pictures
My youngest sons comprise two-thirds of the Nepotist, a band in the hypercompetitive indie music scene of New York City. I’d love to see them make it. But I fear that the evidence supports the winner-take-all theory’s prediction that they face almost prohibitive odds.
That theory has a venerable history. The British economist Alfred Marshall was among the first to describe how 19th-century advances in transportation enabled the best producers to extend their reach. Piano manufacturing was once widely dispersed, for example, simply because pianos were so costly to transport. But with each extension of canal, rail and road systems, shipping costs fell sharply, and at each step production became more concentrated. Worldwide, only a handful of piano makers remain, as producers with even a slight edge have ultimately captured most of the industry’s income.
Inspired by Marshall, the Duke economist Philip Cook and I argued in our 1995 book, “The Winner-Take-All Society,” that superstars have been dominating markets as never before. Analogous forces help explain the surge in income inequality that began in the late 1960s. In domain after domain, we reasoned, technology has enabled innovative business models to serve broader markets. Local accountants have been displaced by tax software, brick-and-mortar shops by Amazon.com and other online retailers. And now, there is even worry that live, in-theater HD broadcasts of Metropolitan Opera performances could displace local opera companies across the land.
But similar advances in production and distribution methods also exert countervailing effects. As the former Wired magazine editor Chris Anderson explained in his 2006 book, “The Long Tail” (the title refers to a property of statistical distributions), digital technology has made music, books, movies and many other goods economically viable on a much smaller scale than before.
For example, films once generated revenue only by mustering large-enough audiences to justify screenings in theaters. Many niche offerings, like Hindi-language movies in medium-size American cities, were simply not viable. Services like Netflix, however, changed all that. Because digital movies cost next to nothing to ship, people can now watch them without having to assemble a posse of ticket buyers.... "
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