1. How to make "The Long Tail" work.

2. The economics of orchestras.

3. The dispute over the North Korean missile launch, and more here.

4. Another interview with Milton Friedman.

5. Betting markets in everything.

6. Farm subsidies and Africa; counter the conventional wisdom, by DSquared.

7. Interview with Charles Murray.  Btw, I don’t think human achievement has declined.

8. Review of the new Adam Phillips book, his kissing and tickling book is wonderful.


Lee Gomes at WSJ fact checks the Long Tail:

It May Be a Long Time
Before the Long Tail
Is Wagging the Web
July 26, 2006; Page B1

Wired Magazine editor Chris Anderson's hot, new best seller, "The Long Tail," is causing a sensation with its eye-opening claims about the way the Web is rewriting the rules of commerce. But I've looked at some of the same data, and some more of my own, and I don't think things are changing as much as he does.

The book argues that while traditional companies are limited by shelf space to offering only a relatively small number of "hits," on the Web, they can carry a vastly bigger number of slower-selling items. These "misses," which make up the "tail" of the title, can, he says, add up to a big number -- maybe even bigger than sales of the hits.

That would be very different from the business world we know today; no wonder the book's cover promises "The New Economics of Culture and Commerce."

Wired Magazine editor Chris Anderson responds on his blog.

What do you think? Is the "long tail" a big driver of business? Join a discussion

Let's start this discussion where Mr. Anderson starts his book, with his discovery of what he calls a paradigm-changing statistic. In the introduction, he tells how he learns from Ecast, a music-streaming company, that 98% of its catalog gets played at least once a quarter -- much more than most would predict.

This "98 Percent Rule," as Mr. Anderson names it, suggests the remarkable prospect that no matter how much inventory you put online, someone, somewhere will show up to buy it. He writes, "Everywhere I looked the story was the same. ... The 98 Percent Rule turned out to be nearly universal."

Except it's not. Ecast told me that now, with a much bigger inventory than when Mr. Anderson spoke to them two years ago, the quarterly no-play rate has risen from 2% to 12%. March data for the 1.1 million songs of Rhapsody, another streamer, shows a 22% no-play rate; another 19% got just one or two plays.

Mr. Anderson told me in an email that he only mentioned the 98 Percent Rule to show how he first got interested in the book's overall subject, adding, "I have no idea how broadly it applies today."

In the book's main sections, Mr. Anderson writes that as things move online, sales of misses will increase -- so much so that they can equal or exceed the sales of hits. The latter is the book's showstopper proposition; it's mentioned twice on the book's jacket.

I was thus a little surprised when Mr. Anderson told me that he didn't have any examples of this actually occurring. At Netflix and Amazon, two of his biggest case studies, misses won't outsell hits for at least another decade, he said. None of these qualifications are in the book.

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From the Friedman interview:

Yes, self-interest is what the individual wants. Mother Teresa, to take one example, operated on a completely self-interested basis. Self-interest does not mean narrow self-interest. Self-interest does not mean monetary self-interest. Self-interest means pursuing those things that are valuable to you but which you can also persuade others to value. Such things very often go beyond immediate material interest.

As a definition it's completely tautological, but I can't find any escape from it myself. It's the reason I've never accepted Rand's dichotomy of self-interest vs. altruism.

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Ad-supported media: a socialist-communist system
Posted at:
re: conversation with Milton Friedman

Substitute "medical care" with "media" and you may see my point about the ad-supported media model. Of course there are some places where the analogy breaks down, but that is only because the ad-supported media model is breaking down.

LA: Is there an area here in the United States in which we have not been as aggressive as we should in promoting property rights and free markets?

MF: Yes, in the field of [media] medical care. We have a socialist-communist system of distributing [news/entertainment]medical care. Instead of letting people hire their own [journalists/entertainers]physicians and pay them, no one pays his or her own [media]medical bills. Instead, there's a third party payment system [advertising]. It is a communist system and it has a communist result. Despite this, we've had numerous miracles in [media] medical science. From the discovery of [internet] penicillin, to new [Web 2.0] surgical techniques, to [Google] MRIs and [iPod] CAT scans, the last 30 or 40 years have been a period of miraculous change in [media] medical science. On the other hand, we've seen costs skyrocket. Nobody is happy: [journalists/entertainers] physicians don't like it, [consumers] patients don't like it. Why? Because none of them are responsible for themselves. You no longer have a situation in which a [consumer]patient chooses a [program]physician, receives a service, gets charged, and pays for it. There is no direct relation between the [consumer] patient and the [media]physician. The [journalist/entertainer]physician is an employee of an [publisher]insurance company or an employee of the [network] government. Today, a third party pays the bills. As a result, no one who visits the [media]doctor asks what the charge is going to be—somebody else is going to take care of that. The end result is third party payment and, worst of all, third party treatment.

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