Winner takes all versus the Matthew effect

Winner takes all

There’s a vague notion going around. For some it’s a suspicion, for others it has become a certainty, the rest of us worry and hope it’s wrong.

It’s the idea that the internet exaggerates the sales inequality of media markets. That, by massively enabling word of mouth and social networking, the web means that we will only get mega-bestsellers or flops, with little to nothing in between. The market becomes just bestsellers leaving the long tail with scraps.

In theory, this should be a simple question to answer. Somebody with access to detailed numbers from the market could calculate the Gini coefficient for book sales revenue over the years. If it used to be lower and is now almost one (or higher, since it’s theoretically possible for books to have negative revenue through returns) then we probably have a winner takes all situation on our hands.

If, however the Gini coefficient has remained the same or stays broadly equal to society’s income Gini coefficient, then we probably just have a regular “the world isn’t fair, boohoo” situation and there’s no need to blame the internet.

My suspicion is that the book market is only about as unequal as the economy in general, that the sales difference between J.K. Rowling’s books and the rest is about the same as the wealth difference between the top 1% and the plebeian masses (us).

But, something has changed!

Everything changes, all the time. In uncontrolled circumstances you can’t reliably map specific changes and claim that one causes the other. A lot of the time when we do that we get it the wrong way around (if we’re lucky), and end up claiming that wet pavements cause rain.

There is a related concept that might explain some of the sales patterns we’re seeing but, again, it’s hard to come up with conclusive proof given that big data lets us see what we want in the numbers and a market doesn’t lend itself to double blind experiments.

It is something that has been observed in plenty of other systems.

The Matthew effect

The idea is very simple: the rich get richer and the easiest way to get more popular is to be popular in the first place.

How it would work in a market could be described like this: every sale of a copy of a book increases the probability of selling other copies independently of other variables in the market.

If you couple it with Reeds Law which states that “the utility of large networks, particularly social networks, can scale exponentially with the size of the network” then you get this:

If a book has sold twice the number of copies of another book, it will have four (22) times the sales clout of the lesser selling title. A book that has sold ten times more will have a hundred times the sales clout. And so on.

What does this mean for publishing?

If this theory is even remotely true this has several major consequences:

Or, of course, it could all just be wild speculation based on a wild theory with no basis in reality. Time will tell.