In The Long Tail, Chris Anderson persuasively argued that the internet is facilitating a shift from mainstream hits towards increasingly niche interests, however, the continuing popularity of blockbusters such as Avatar suggests that the hits are as popular as ever. More interestingly, the experience of ‘long tail’ companies such as Netflix indicates that contrary to conventional wisdom, the engaged customers aren’t always the most satisfied.
It is logical to assume that, given the breadth of movies offered by a service like Netflix, customers with a specialist interest in films would get more pleasure from the DVDs they choose than your average punter. However, according to The Economist, the reverse is true.
A Wharton Business School study analysing reviews on Netflix found that blockbusters get better ratings from the people who have watched them than more obscure titles – even Transformers: Revenge of the Fallen, which was consistently slammed by the critics, is awarded four stars out of five. Another study by Harvard Business School apparently found a similar story on Quickflix, the Australian equivalent.
So why do hits continue to be so popular?
One of the classic arguments is that people still crave shared experiences. Another key factor is that consumer decision-making doesn’t seem to be keeping pace with technological change. Back in 1963, William McPhee’s 1963 study Formal Theories of Mass Behaviour explained the dynamics of a hit: “a disproportionate share of the audience for a hit was made up of people who consumed few products of that type”. The Economist argues that this phenomenon still rings true today:
“A lot of the people who read a bestselling novel, for example, do not read much other fiction. By contrast, the audience for an obscure novel is largely composed of people who read a lot. That means the least popular books are judged by people who have the highest standards, while the most popular are judged by people who literally do not know any better.”
Indeed, my initial interest in the dynamics of DVD ratings was sparked by my own slightly frustrating experience with Quickflix, which seems in line with the findings of the above studies.
As someone who watches quite a broad range of movies, I started noticing that most of the fairly obscure titles I am recommended by Quickflix seem to be rated no higher than two to three stars, while blockbusters typically receive three or four stars minimum.
The result: rather than encouraging users further down the long tail, the current user-powered recommendations may in fact be reinforcing the tyranny of the hit.
Shunning greater choice
With the amount of content on the internet predicted to double roughly every five years, we’re clearly not short of information to help us make these decisions. However, as Barry Schwartz’s The Paradox of Choice suggested, greater choice has been shown to make decision-making more complex and ultimately less satisfying.
Arguably many of us gravitate to the familiar in order to avoid being overwhelmed by the amount of information at our disposal, subconsciously screening out options that require further investigation. According to Rory Sutherland, this is because, except in a few areas of specialist interest, minimising risk has a far greater influence on our decision-making than optimising choice. And if minimising risk is driving our decision-making, it is likely that we are applying similar criteria to rating what we bought.
The success of retailers such as Amazon demonstrates that serving niche interests can be an incredibly lucrative growth strategy. However, as marketers continue to evangelise the benefits of deeper customer engagement, it’s important to remember that these highly engaged customers can also be the hardest to please.
UPDATE 14/04/10: An article in FastCompany reveals that Zappos’ best customers return around 50% of the goods they buy, compared to an average return rate of roughly 35%. However, while free return shipping may make these customers more expensive to service, by reducing the risk of a bad decision, it encourages them to spend significantly more overall.