Blockbusters

Elberse, a Harvard Business School professor who studies entertainment economics, argues that concentrating resources on a small number of large bets is the correct strategy in entertainment and media, directly against the long tail argument.

Her empirical claim is that demand in these markets is becoming more concentrated rather than less. Digital distribution removed shelf space constraints and made obscure titles available, which the long tail argument predicted would shift consumption toward the tail. Elberse's data shows the opposite: the share of sales going to the top titles has risen in music, film and books, because search, recommendation and social discovery all direct attention toward what others are consuming.

The strategic argument follows. Since demand concentrates, a studio or label maximises returns by spending disproportionately on the properties most likely to become large, including the production budget, the marketing and the talent, rather than by spreading resources evenly. She documents this at Warner Bros under Alan Horn, whose tentpole strategy concentrated the slate; in music, where labels invest heavily behind few artists; in sport, through Real Madrid's galacticos policy and the Manchester United commercial operation; and in television.

She also argues that superstar talent commands its price because the alternative is not a cheaper equivalent but a substantially worse outcome, and that attempts to economise on talent in these markets reduce returns more than they reduce costs.

The evidence is real and the concentration finding is well supported. The strategic inference is weaker: a strategy that works for a studio with a portfolio and the capital to absorb failures does not transfer to a smaller producer, and Elberse's cases are drawn from firms with the balance sheet to make large bets repeatedly. The rise of streaming volume strategies since publication also complicates the argument.