For decades the blockbuster strategy has been a popular approach in the media- and entertainment industry. According to this principle producers should focus their marketing resources on a small number of likely best sellers in order to maximize returns. Although this strategy is kind of risky ( what if your chosen ‘likely best seller’ doesn’t turn out to be a best seller?) the enormous profits you gain from a successful best seller should make up for the occasional losses from misjudgements. However, society has changed during the years and the problems which were tackled by the blockbuster strategy seem to be no longer relevant. Nowadays, due to the internet shelf space is endless and consumers seem to be no longer pleased by main stream products. These developments lead to the question: Is the traditional blockbuster strategy still relevant?
According to the paper ‘Should you invest in de Long Tail?’ by Anita Elberse (2008)
the answer to this question is yes. One would assume that successful companies are no longer the ones which focus on quantity, but the ones which pursue diversity. However, Elberse states otherwise. According to her the tail of the Long Tail (theory which states that our economy is shifting away from a focus on a relatively small number of “hits” towards a huge number of niches in the tail) is less profitable than one would expect. Her research points out that customers often still highly value top 10 suggestions and actual blockbusters. Therefore, Elberse expects that the blockbusters will remain the most profitable segment in the future.
On the other hand, there are many other papers and researches which state the opposite. They believe niche markets are the future and predict that future companies cannot survive without differentiation. According to them getting to know your customer and fulfilling their specific need is crucial which makes the blockbuster strategy outdated. To me personally this seems more plausible, but what do I know? Only time can tell.
Based on ‘Should you invest in de Long Tail?’ by Anita Elberse (2008)
References:
https://hbr.org/2008/07/should-you-invest-in-the-long-tail#
http://www.mt.nl/332/87173/business/anita-elberse-waarom-de-blockbuster-strategie-lonend-is.html
http://www.longtail.com/about.html
