Content for sale

In marketing, and especially internet marketing, the concept of the ‘long tail’ is very well known.

Basically, a small fraction of popular products and services dominate the market (‘the head’) and a largish fraction of products and services (‘the long tail’) get very little revenue.

Selling things on the internet is essentially one big pyramid scheme, where a small number of lucky content providers make money and large number of content providers (authors, musicians, etc) lose money. All the profits are in the head and all the losses are in the tail.

The larger number of content providers in the ‘long tail’ lose money because they actually pay all sorts of service providers (website builders, hosting services, professional formatters etc) to get their content on the web in an appropriate format, and their revenues are less than their costs.

The small number of lucky content providers rely on a bit of virality to get initial momentum and then they get picked up by promoters who take a profit share but also invest heavily in marketing these guys’ products.

The whole thing is a pyramid scheme because the promoters that underwrite the investment in the winners also profit from the large number of losers. The promoters are the ‘big assholes in the middle’ like iTunes, Amazon and the like.

Trying to make money from content is a gamble not an investment.