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You're right - I think the problem providers have with monetizing content is that they start with that false premise (We must adapt our programming to our audience). If you look at a lot of the most successful sites and memes, they're all 90% passion about their issue and 10% "business smart." You see musicians go from MySpace to mainstream radio, knocking down the focus-tested music that has long dominated the Top 40 charts. I don't want to say there isn't a place for things that appeal to 51% of Americans, but there is money and success in working with the other 49%.
Another crucial development that has helped small groups come together would be search engines. Maybe 5 years ago, a tiny niche site wouldn't take off, but with Google and some other important portals, people are finding even the most remote hobbies with ease.
Excellent point about search engines... They've truly made the long-tail of content possible. Search engines have allowed many content producers to focus on what they're really passionate about... If enough people can find your quirky videos, there's no need to think about making them conform to the mainstream public.
I'll be developing each of the points made in this article further in the coming weeks.
Saludos,
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