Required reading.

The Economist had a couple of fantastic articles this week about the future of entertainment. The first examines the divergence of entertainment between big blockbusters and niche media:

Creative types who are accustomed to lavishing money on moderately appealing projects will have to do more with less. Or they must learn how to move between big-budget blockbusters and niche, small-budget fare, observing the different genre and budget constraints that apply in these worlds. A few forward-looking folk, such as Steven Soderbergh, a film-maker, are already doing this. Some will find shelter. Premium television channels such as HBO, which are built on passion more than popularity, offer some protection from chill market winds. So do state broadcasters like the BBC.

And the second dives deep to explain the anatomy of the hit:

Although you might expect people who seek out obscure products to derive more pleasure from their discoveries than those who simply trudge off to see the occasional blockbuster, the opposite is true. Tom Tan and Serguei Netessine of Wharton Business School have analysed reviews on Netflix, a popular American outfit that dispatches DVDs by post and asks subscribers to rate the films they have rented. They find that blockbusters get better ratings from the people who have watched them than more obscure ones do. Even the critically loathed “Transformers: Revenge of the Fallen” is awarded four stars out of five. Ms Elberse of Harvard Business School has found the same of ratings on Quickflix, the Australian equivalent of Netflix.

Perhaps the best explanation of why this might be so was offered in 1963. In “Formal Theories of Mass Behaviour”, William McPhee noted that a disproportionate share of the audience for a hit was made up of people who consumed few products of that type. (Many other studies have since reached the same conclusion.) 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. An American who read just one book this year was disproportionately likely to have read “The Lost Symbol”, by Dan Brown. He almost certainly liked it.

What's the take-away? If you do niche programming, embrace it. Do it and do it well. If not, go big or go home. The middle ground is quickly sinking.