Superstars and Underdogs - HBS Intranet - Harvard Business School
Superstars and Underdogs - HBS Intranet - Harvard Business School
Superstars and Underdogs - HBS Intranet - Harvard Business School
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<strong>Superstars</strong> <strong>and</strong> <strong>Underdogs</strong>:<br />
An Examination of the Long-Tail Phenomenon in Video Sales<br />
ABSTRACT<br />
Academics <strong>and</strong> industry observers sharply disagree on how online distribution will change the<br />
number <strong>and</strong> variety of products that consumers purchase. Proponents of the “long-tail” idea argue<br />
that a significant increase in the supply of products through online channels will fuel a shift in<br />
consumption away from hits to a vast number of lower-selling niche products. The “superstars”<br />
theory predicts the opposite: as consumers have access to their favorite content wherever they are<br />
<strong>and</strong> whenever they dem<strong>and</strong> it, consumption patterns will become more, not less, uniform. To<br />
examine these competing hypotheses, we study the distribution of sales in the U.S. home video<br />
industry for the 2000 to 2005 period. We find a long-tail effect in that the number of titles that sell<br />
only a few copies every week increases almost twofold. At the same time, however, the number of<br />
non-selling titles quadruples. We also find evidence of a superstar effect. Among the best-<br />
performing titles, an ever-smaller number of titles accounts for the bulk of sales. The caveat here is<br />
that the decline in sales, which we observe across all quantiles of the sales distribution, is most<br />
pronounced among best-selling titles. Our findings thus point to significant marketing challenges for<br />
the entertainment industry.<br />
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