Home Categories political economy Case Study (Volume 5): Difficulties in Overseas Mergers and Acquisitions of Chinese Enterprises
In 2004, among the 1.2 million titles tracked by Nielsen BookScan, 950,000 titles sold less than 99 copies, 200,000 titles did not reach 1,000 titles, and only 25,000 titles sold more than 1,000 titles. 5000 mark.In the UK, about 200,000 books are published every year, of which only 20,000 books are "lucky" to finally enter the bookstore. In other words, about 98% of books can hardly create any commercial value.So why do so many people still want to join the army of publishing books?Or, to break the problem apart—how do these hard-to-get-in book authors afford the costs of publishing?Then, where did their distribution fees come from?Even if the above two problems are solved, how can these niche books attract readers' attention?Will there be a market for them?

In traditional business thinking, these questions are often easily filled with "impossible" answers: 20% of the best-selling products bring 80% of sales, and the remaining niche markets are like tasteless chicken ribs. Can't make much profit at all.But today, when we use the concept of "The Long Tail" (The Long Tail) to observe the current market, we will find that the so-called "best-selling" actually only accounts for the front part on the statistical chart of the market, while in the "head". "After that, there is a long "tail".Summing up the commercial potential gathered on the long tail, the power often easily surpasses the top ten on the best-selling list.

American "Connection" (Wired) magazine editor-in-chief Chris?Anderson published an article called "The Long Tail" in the magazine in October 2004.Almost at the same time, Anderson opened a long-tail blog to share his experience with readers, and constantly improved his theory, and later published the book "Long Tail".Two lines on the cover of the UK edition of the book sum it all up: "How Endless Choice Creates Infinite Demand"—"Endless Choice" thanks to advances in information has been reflected in. Hastings, the CEO of the movie rental website Netflix, linked "The Long Tail" and "The Tipping Point" (The Tipping Point) in his recommendation, because they are both talking about the changes and opportunities brought by the Internet to business.But the difference between the two is that "Tipping Point" focuses on turning small products into big phenomena, and trivial things will become popular like viruses in an instant.The standpoint of "Long Tail" is that the sum of the value of the infinite niche market will not be inferior to those hot commodities that are in full swing.

The idea of ​​"Long Tail" originated from an interview with Wired magazine.Robbie, CEO of Ecast, which operates digital music, asked Chris in his office?Anderson guessed what percentage of the 10,000 albums they sold sold at least one single per quarter.Anderson thought about it and said 50%, but the correct answer was 98%. Anderson named this discovery the "98% Rule", intending to show that the long "tail" still has massive market potential.Faced with an infinite supply, our past positioning of bestsellers and niches has become completely wrong.It used to be that less was more expensive—if there were only so many spots on bookshelves and on the airwaves, it would have to be filled with the best sellers; but now, with the growing Internet economy, everything is at your fingertips If they are available, then they may all become customers' choices on the same platform.

It sounds like the "long tail" is like the terminator of the "80/20 rule".In traditional stores, due to high inventory costs, 80% of the goods that make 20% of the turnover can hardly bring any profit.This makes it easy for people to still be imprisoned by a fixed mindset in the Internet age, and then ignore those niche markets that seem to have no name. However, in the Internet economy, the products on the website do not need to be displayed in shops built with reinforced concrete, so the cost is greatly reduced. Take the book market, for example.First of all, due to the democratization of content production tools, the cost of creation has been reduced, and the production process is no longer the monopoly of large companies—in addition to the "head" filled with popular products, the "long tail" has come into play due to the emergence of countless niche products And born.A good example is Lulu.com, which Business 2.0 magazine hailed as "freeing the publishing industry." Lulu.com assists many unknown authors to obtain official ISBN book numbers and register for sale in online bookstores. Moreover, they generously give back 80% of the profits directly to the authors, while traditional booksellers give authors up to 15%.

Secondly, no matter how many good things there are, they must be sold by producers and bought by consumers to be meaningful, and the reduction in sales costs just solves this point. The channel threshold is lowered and gradually enriched.Amazon's online bookstore's solution is "print on demand": before a niche book is ordered, it is kept in the database in the form of a digital copy, and once an order is placed, it is printed immediately.In the past, the greatest cost to book publishers has come from reseller returns.According to the usual practice, publishers must accept all of them unconditionally, and then melt them into pulp.

In China, the long-tail market created by lowering production and sales thresholds is the most familiar to the public.On C2C sites like Taobao, netizens can own their own online stores and trade second-hand goods or homemade handicrafts without spending a penny.The instant messaging software, integrity security system, and payment protection settings provided by the trading platform all reduce the risks of buyers and sellers as much as possible.Sun Xiaojuan, who calls herself "basin sister" on the Internet, majored in finance in college and never received formal art training, but became famous on Taobao for hand-painted bags. "I thought this was for fun, and I didn't make it very big. But if you want to make money from this, it will be effortless." Sun Xiaojuan said, "My hand-painted paintings are all the same, and I don't like to draw the same Patterns, so each piece is unique, and many people are willing to pay several times the price of ordinary bags to buy."

In the end, a new channel emerged between the demand side and the supply side, and the long-standing gap in information circulation was filled—consumers’ attention and purchasing power were diverted from the “head” to the “long tail” through this, Niche products are favored more by eyeballs and wallets.Regarding this point, there is no better example than douban.com, which is "growing on the edge of the best-selling list".Founder Yang Bo believes that most of the popular content on Douban.com is not the best-seller list.Douban is composed of various "interest groups", with individuals as the core, related to each user's own interests.It does not push information on a large scale like a portal website, but relies on everyone to pull it spontaneously.Through this platform, people's vision has gradually shifted from known fields (hot commodities) to unknown fields (niche commodities), forming their highly respected "discovery" function.

Click on the page of a book on Douban.com, and in every corner, users can at least directly discover other books related to it through the following channels: "Books that people who like this book also like to read", "Books commonly used by Douban members. Tags for", "Who Reads This Book", "Groups Frequented by People Who Liked This Book".And this mechanism is also effective in the music channel of Douban. For example, young netizens who like Zhang Jingying's new album will find the "Fashion Alliance (makeup partner)" group in the "groups frequented by people who like this album". From there, discover the books, movies, and music your peers are paying attention to.

The subversion of shelves by online stores also allows niche products to have more opportunities to be discovered by "well-matched" customers.Film critic Zhou Liming once worried about his own work: "This "Hollywood Apocalypse" is always put on the shelf of 'movies' by bookstores. In fact, it should be classified as 'commercial'." Opening the catalog, readers will The chapters in the book are as follows: "Film Industry Structure", "Film Income and Funding Sources", "One-sided View of Film Production", "Film Marketing, Distribution and Screening", "Interpersonal Relations and Power Politics", "Chinese Film "And International Market" - the core topic is discussing "business", but it is also closely related to "movie".In traditional stores, shelf resources are scarce, and a book cannot appear on two shelves at the same time.Among several classifications that are not mutually exclusive but roughly coincident, choosing which one to discard in the end should be regarded as a "last resort".

But looking at the dazzling array of books and audio-visual products on the Amazon Internet Bookstore, they are not only endowed with various types (Genre) and keywords (Keyword) by the administrator, but users can also attach their favorite tags (Tag) to it.In a market with "endless choices", each product will meet a specific need, and it is difficult to classify products with a single standard.In the past, "good" and "bad", "excellent" and "inferior" should now be replaced by "suitable for me" and "not suitable for me".Signal to one person becomes noise to another, and the signal-to-noise ratio continues to decrease as the long tail stretches—what's perfect for one person isn't perfect for everyone else Produces a tailored-like effect. Amazon is to traditional stores what Google is to libraries.While libraries use the "Dewey Decimal Classification" to arrange books, Google has completely broken the concept of classification.In the long-tail market, because of the new information dissemination channels, consumers can find their favorites among the massive amount of information, and those products that may have been ignored due to improper classification or message blockage can thus be released. Stand out in the endless "long tail market". Right now, a new trend of the Internet is obvious to all, that is, everyone participates in it.Or, to sum it up with a very loud slogan a few years ago - "the power of gathering people online".We are bidding farewell to the network society where centralized production is carried out by portal websites, and we are entering a new ecological circle.Here, the website is just a platform, and the participation of users makes these interactive programs run at a high speed and create value. YouTube.com can be seen as a classic example of this new Internet.So, what makes it the hottest tube site in the world today?At least, YouTube has made itself a huge success worth 1.65 billion U.S. dollars in three aspects: First, YouTube makes it very simple for users to upload video files-people don’t need to install a client to upload videos, and they don’t need to log in to the website. The required format compresses and encodes the video; secondly, YouTube converts all videos into a unified format for online playback by the ubiquitous Flash player-this eliminates the dilemma encountered by users who do not have the latest version of the media player plug-in, and realizes True cross-platform sharing; more importantly, they have established a good community system - where users can easily rate, comment, or conduct group discussions, and even respond to other people's works with self-made videos. These three innovations make it easier for netizens to play the three roles of content creators, consumers and disseminators, and then realize a complete push chain, so that all content has the opportunity to reach the most matching audience.So, what is the ratio between the three groups? Earlier this summer, YouTube hit the milestone of 100 million daily video views.It can be found in the data released at that time that, on average, only about 65,000 people uploaded videos every day.If you divide the two figures before and after, content producers only account for about 0.07% of the entire active user group.This phenomenon also exists in Wikipedia.According to founder Jimmy ?According to the statistics of Wales, 0.7% of users create 50% of Wikipedia content, if the range of users is expanded to 1.8%, then the works created by them cover 72% of the articles on Wikipedia.Similarly, in the Yahoo community, 1% of users are building communities or creating topics, 10% of users will participate in interactions, and the rest of users just "walk by" but never speak. A similar ratio also exists in Douban.Douban now has nearly 300,000 registered users, and the daily visits are about 10 times the number of registered users.If we take the number of times all Douban users have been added as friends and the number of people in all Douban groups as the vertical axis, we will also find that most users and groups are not very active in terms of interaction, and the relevant indicators are only in individual digit level.But each of them is creating value. Even for simple visitors, the reverse connections and access logs created by them are also contributing analysis samples to the content platform. Various forms of participation support the new "participation" type" business ecology. Accordingly, a series with Chris ?A rather similar curve to Anderson's "Long Tail" emerges.What about Chris?Anderson's "long tail" focuses on content products in the digital age, so now the other "long tail" is the application of the power law (PowerLaw) from the perspective of user participation—a very small number of creative users are content platforms Contributing the most value, the active users who participate in the interaction make the content sorted out and passed on to the public, and the vast majority of visitors enjoy the products jointly sent by the above two.In the early days of the Internet, people mostly gathered at the tail to move their eyeballs, but with the derivation and popularization of new technologies (from the past BBS, chat rooms, forums to the emergence of various blogs, podcasts, and vlog platforms), Internet participation As the speed continues to increase, ordinary netizens can move their heads and start to gradually try to use their hands and brains.
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