So USA Today technology columnist Kevin Maney opines today that Barry Diller is no idiot. Duh. He’s talking about Diller’s recent speech at a technology conference, when he remarked that real talent is rare, which makes the proliferation of user-generated media such as blogging and podcasting much ado about nothing. The real game, says Diller, is to match high-quality content (and the A-list talent that creates it) to new-media delivery systems.
Well, sure. It’s not as if no one thought of this. But Maney defends Diller in his piece as if this was news. He says Diller’s been proved right by two recent events: Apple’s deal with ABC and Google’s courtship of AOL.
He’s half right. While it’s true that Steve Jobs loves to innovate with technology, he’s actually more impactful as a dealmaker and marketer. The iPod was not the first mp3 player, just the one that connected the strongest with consumers. iTunes was not the first music store, just the one that got the business model right. And the video-capable iPod is not the first mobile video player, just the first one to make a deal with a major entertainment company.
Maney’s point — and Diller’s — is that any new medium or delivery system is nothing without great content. He cites Netflix CEO Reed Hastings’ description of the long-tail theory, which says that about a third of all media consumption is dominated by a few big hits, while the other two-thirds forms a long tail that consumed by small niche audiences.
This sounds to me like the old 20/80 rule of the entertainment industry — that 20% of the content generates 80% of media consumption. In other words, hits drive the business. Apparently, though, in the Internet age, that quotient may have shifted to 33/67.
Of course, these numbers are just expressions, not hard data. Still, it strikes me as valid that the web has enabled the long tail to grow a bit fatter.
That’s why Maney is reaching to say that Google’s courtship of AOL is another example of talent winning out. First off, everyone’s been courting AOL lately — not just Google (in fact, it was MSN that got the ball rolling). And those talks are only partially about AOL’s content. MSN and Yahoo are primarily interested so they can replace Google as AOL’s search-engine partner. Google is defending its turf.
What’s more, AOL is not that rich in content. Sure, they’re doing some great things over there, especially in music (with Live 8, Sessions, etc.), but they’re really just getting started. It’s not as if they’re a TV network with must-see shows. The content is not the key to those potential deals.
As with most things, I think the truth lies in the middle. Yes, Diller is right — talent is rare, and when you marry it to new technologies, you’ve got something. But the fact that the end of the tail may be growing fatter suggests something else: those niche audiences are worth something too. Technology has enabled the little guys to connect with each other, find their audiences, and even make money. In fact, that’s where the first revolution was — eBay and Google aggregated the little guys, connected them, and monetized them. Last I heard, these were pretty valuable companies.