When consumers are offered infinite choice, the true shape of demand is revealed. If you're not already aware of Chris Anderson's Long Tail blog, I highly recommend it. It's good reading. In case you're coming to the party late, Anderson's "About" page explains it for you:
The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-target goods and services can be as economically attractive as mainstream fare.
How this relates to the production and exhibition of cinema, especially niche films, should be obvious. Anderson's five posts of the last few days deal with what he calls the "Death of the Blockbuster" in depth. Here they are for you, in chronological order:
The blog is a promotion of, and preface to, the book of the same name that Anderson has coming out this year. I imagine it's going to be big.