I once read in a book that the value of a network is proportional to the square of the number of users, but I couldn’t recall the term, so I looked it up, and it turns out to be ‘Metcalfe’s Law’.
Here is a summary of the content.
Network Effects and Marketing Laws
Metcalfe’s Law
The concept that the value of a network is proportional to the square of the number of connected users (nodes).
Mathematically expressed, the value of a network is V ∝ n² (n: number of users).
Example: As the number of users increases on social media, messengers, and telephone networks, the value of the network increases.
Reed’s Law
An expanded concept beyond Metcalfe’s Law, stating that the value increases dramatically when small groups are formed within the network.
It is an important factor in community-based marketing, explaining why the influence of specific groups (fandoms, interest communities) grows.
Sarnoff’s Law
A law stating that the value of media networks (radio, TV) is proportional to the size of the audience.
This connects to the concept that as advertisements or content are exposed to more people, their effectiveness increases.
Long Tail
The concept that not only popular products but also the sales of niche products can become a significant part of total revenue.
It is one of the important strategies in search engine optimization (SEO) and content marketing.
Connection to Online Services
Metcalfe’s Law
As the number of users (link sharers, visitors) increases, the value of the platform increases exponentially.
Reed’s Law
When communities based on specific interests (niche groups) become active, the network effect becomes stronger.
Long Tail
Not only specific popular content but also content created by various users can consistently drive traffic.
Updated : March 20, 2025
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