The Long Tail and Content Creation

In my recent post about Long Tail economics, I wrote about the value of aggregating and/or filtering Long Tail content. There's no question that there will be a lot of money flowing to successful content aggregators and filterers. But by focusing on the Long Tail content that already exists on the web, I missed a hugely valuable category of Long Tail companies -- content creation tools.

While a big part of the Long Tail story is the vast, widely disseminated nature of content on the web today, the other piece of the story is the incredible ease of content creation. Not only is it easier to distribute content via the web, it is easier to produce it in the first place. What once took thousands of dollars worth of equipment and huge numbers of hours to create, can now be produced on an inexpensive computer in a fraction of the time.

The power of simple and cheap content creation tools is that they democratize the content business. They empower the average Internet user to become a content creator and publisher rather than merely a consumer of professionally created music, video, etc. I am a huge believer in the value of user created content. The massive growth of content on the web has been fueled by tools that ease the process of content creation and dissemination. In fact, while I rarely write about my investments on VentureBlog, I think that two such investments strongly reflect my belief in user generated content.

I am an investor in Six Apart, the makers of TypePad, LiveJournal and Movable Type. Each of these blogging platforms vastly eases the process of content creation and dissemination. It is hardly worth beating the well-flogged blogging drum but suffice it to say that the amount of content (not to mention the breadth of that content) created on Six Apart's blogging platforms continues to grow at a staggering rate.

I have also recently invested in a company called VideoEgg that enables drag and drop video publishing. In some ways, VideoEgg does for video what Six Apart does for the written word -- it eases the process of video creation and dissemination. Innovative companies will continue to make publishing to and from the web increasingly simple and accessible to the public at large. User generated publication will include text, pictures, audio, video, perhaps some day holographs, who knows. And the companies that are the most successful at facilitating the creation and dissemination of that content will reap significant economic rewards (not to mention positioning them to better aggregate and filter Long Tail content as well).

So while there is big money to be made filtering and aggregating the burgeoning Long Tail content on the web, it is worth also keeping an eye on the content creation and dissemination tools that are fueling that content explosion. User generated content is an important driver of the Long Tail and the tools that enable that creation will be increasingly valuable.

Comments

[steve crandall]

I strongly agree that the emergence of content creation tools will make a huge difference, but suggest it is the middle part of the tail, rather than the long tail that is important.

I've been involved in some music creation experiments with a conservatory ... what happens when music 101 involves composition (your own) of musical types that you are passionate about. The tool was GarageBand and we had about 100 very happy excited students. We also had about 3 or 4 pieces of music that someone else might enjoy.

Chatting with people who have been working with video, amv and douginshi suggest similar percentages even in fandoms.

This will produce a great amount of good material, but it is important to note the SNR will be much worse than the commercial world (remember that only 5% of scripts make it past a first reading).

But the tools are getting great - last week I saw a wonderful claymation comedy that was done by a couple of 17 year olds with an iMac, a cheap digital still camera and a $40 piece of software. I suspect these kids would be good at many other things.

[Peter Caputa]

Amen. It is about time someone recognizes that the publishing platform is a critical piece of making this all work. If we look at the range of types of content where regular people have been empowered with the ability to publish on a similar level as big media, we still have a long way to go. We've democratized diaries, photo albums (flickr), disc jockeys (podcasts) and bookmarks. I'd say we're just getting started.

The quick bucks might be in aggregation, but long term value is in the publishing platform.

[Mike Rechan]

How should a self publishing tool company approach the market at this point to capture long tail value? Most seem to provide a "free" service that is perhaps ad driven and/or offer a premium upsell. I would think services such as LiveJournal and Myspace were valued based on unique users or overall impressions generated factoring in a growth projection? Will services such as TypePad find the going tough over the long haul as more free services are offered? Seems like the market is valuing audience and growth over short term subscription revenues that might make a self publishing company profitable faster? Question is how to best position a company in the self publsihing space?

[Silvana Delatte]

Content Creation Tools. As a primary content creator I fully agree with your investment strategy. The problem at the moment is the learn as you go situation. There is no central location, that I know of, that compares tools and can give useful information and analysis. In this market the "sell side" is aware of the developements and trends but the "buy side" is totally in the dark. As an investor in this market you might do well if you can find also the independent analyst about content creation tools and all the upcoming tools such as RSS,tags,. The Long Tail is waiting for a Magazine (paper or online).
http://lifeinlasne.blogspot.com/2006/01/long-tail.html

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