The thing about cultural niches is that they are created by and for ‘mass media’ as a novelty generator. Having an isolated group of people experimenting on the fringes of culture without the necessity of appealing to large numbers of people or dealing with expensive equipment means creating an alternate media universe with new and interesting ideas and techniques each with its own associated small audience, and cultural niches can have their ideas and parts of their audiences imported into the mainstream on a temporary basis in order to keep the perception of the mainstream ‘new’: whenever something gets imported, it seems alien and novel to mainstream viewers precisely because they have historically been unaware of or isolated from the cultural niche in which it is considered an inevitable and incremental step. By importing proven ideas from fringe groups, mainstream media creators get the best of both worlds: they can seem creative while ultimately being extremely conservative with investor money.
This particular way of looking at niche media isn’t new; at the latest, it dates back to the french situationist movement of the 50s and 60s (and specifically to The Society of the Spectacle, in which it is a central theme), although it’s probably older. I’m going to suggest that — at least since the 60s but probably starting earlier — this has been an explicit part of planning, rather than (as Debord suggests) a fully autonomous process inherent in appropriative capitalist media structures.
Niches come in a hierarchy of sizes, and these sizes are related to cost and audience — two factors that were a lot more closely correlated before widespread internet access made the marginal cost of expanded distribution drop precipitously. Nevertheless, distribution is not wholly free: distribution on ‘mainstream’ scales is expensive even on the internet, and while it’s cheaper than television and newspapers, it still justifies (for instance) the internet advertising ecosystem. Furthermore, there are often production costs that are essentially ultimately scaling costs: more professional-looking things often are considered more accessible or desirable by a larger audience, and professional things at minimum take more time and/or experience to create even when they don’t produce greater material costs (and this is the problem that people who create media for youtube run into: youtube isn’t charging them to upload videos, but at a certain point they feel like in order to expand their audience they need better quality cameras and microphones, makeup, lighting, and eventually professional actors and makeup artists and animation teams, which is how the Vlogbrothers video ecosystem became an insanely conventional-looking media establishment despite zero distribution costs).
Art-house films and experimental music, despite hipster cred, are great examples of niche media ecosystems. And, if you have familiarity with either, you can trace the influences of the niche forms into mainstream, as happens over and over. But, both of these are explicit niches. They aren’t so much ‘long tail’, particularly historically: film production was, until the advent of inexpensive high-capacity digital video cameras and video editing software, absurdly expensive even in its cheapest forms, and the same is true of both conventional acoustic instruments and pre-PC synthesizers of both analog and digital variety. You might instead cast experimental film and music as a kind of skunk-works, like Xerox PARC: get the smartest and most creative people together to make things, throw money at them, and never try to actually market the results because the real value is in which ideas and techniques you can appropriate later when they’ve become mature enough to be safe bets. There are similar kinds of skunk-works situations on different levels of niche-ness: the BBC radiophonic workshop was fundamental in the genesis of electronic music and was essentially a government-funded audio special effects studio; low-budget BBC TV shows in the 60s and 70s like Doctor Who and The Avengers were as influential as they were eclectic and despite being popular and having national or even international distribution their low budget nature made them less conservative: the cost of mistakes was low. Television in general was, once upon a time, a skunkworks for film, and public access television continues to be a testing ground for people looking to get into producing film or television. As an example of another level in this hierarchy, comic-book-based and SF-based films have become mainstream while westerns have become fringe — a complete reversal since the mid-70s, and one that allows time for the rich loam of gunslinger mythos to lie fallow and compost itself into a more fertile genre while formerly ignored and ridiculed genre fiction in the SF sphere injects its hard-won fruits and seeds into the mainstream, which, vampire-like, returns from the dead by sustaining itself on the blood of living subcultures.
The particular economic shift of internet distribution — wherein even if scaling up distribution has minimal marginal cost, scaling *out* distribution geographically has truly zero marginal cost barring the extra steps of translation — has meant that each culture operates as though it’s a media niche. Really, this isn’t very accurate in the scheme of things. Gangam Style was never niche: the South Korean music industry is huge and profitable and represents its own mainstream, and both the jpop and kpop industries are considered overly commercial and conservative to people who are in those countries, the same way that bubblegum pop is considered commercial and conservative in the united states. What’s happening is a greater-scale version of what often happens when import barriers are lifted: a niche group in one culture defines itself in part by bits and pieces of another culture’s mainstream. Just as the influx of american gangster movies into post-second-world-war France was the antithesis (and french identity the thesis) creating the synthesis of the french new wave movement in cinema and the influx of american science fiction films into post-war Japan was a major influence for japanese tokatsu/SFX fandom (and as how, earlier, the import of Disney cartoons spawned anime), americans latching onto jpop and british tv imports has created new subcultures. Gangam Style’s widespread familiarity outside South Korea is a slightly more extreme form of the same phenomenon that made Yellow Rose of Texas a huge hit in China, Frank Sinatra’s My Way a huge hit in Japan, Blueberry Hill big in Russia, Jerry Lewis in France, David Hasselhoff in Germany, and pretty much any other unexpectedly popular import. “Big in Japan” is literally a stock phrase in the music industry because the combination of good media relations between Japan and the english-speaking world with a boatload of subtle but complex cultural differences makes for a huge set of english-speaking acts who undergo unexpected success once exported to Japan. But, today, anywhere with widespread high-speed internet access has the same relationship to anywhere else with it that the United States and Japan had in the 1980s. Every piece of mainstream media has the capability of being exported and recontextualized and becoming “big in japan” in some unexpected place.