The Long Tail – The New Economics of Culture and Commerce
Why the Future of Business is Selling More of Less
By Chris Anderson
More selection, and more individualized selection are key trends of our internet age. “The Long Tail” refers to that part of the market where the quantities sold are small, but the overall numbers are very large, and targeted and promoted correctly, they are potentially very profitable, and less competitive. Gone are the distribution and marketing bottlenecks of yester-millennium.
[Graphically, this is the y=x-1 shaped graph from the Cartesian Plane we all loved in high school]
Companies like Amazon (Books) Rhapsody (music) and Google (Advertising) are stars of the long tail world, becoming incredibly effective at micro-targeting their products and earning millions or billions selling what would otherwise not be available without the minimal ‘stocking’ and advertising costs that the online world offers.
To who remembers the days of only three American (and 2 Canadian) TV networks anyone familiar with Amazon or buying music online, the concept does not, on the surface, need a lot of explaining, but for the first few chapters, we seem to get the concept explained over and over again in different ways: The “Hit” is fading, the world of a thousand niches is here.
Soon, however, Anderson gets into more detail and strategy – stuff we can use:
Nuggets:
“Filters” – whether automated or through peer review/social networking are essential in making the long tail world work. They are key in helping “long tail” consumers find the product they want through the huge selection available to them – cutting down the “Signal to Noise” ratio.
Viral Marketing is a key part of marketing to the long tail – and the “wisdom of crowds” has a lot of relevance here.
The old marketing and retail 80-20 “rule” is all but dead in any market that adapts to the long tail.
There is the interesting note on the “Long tail of time” where “Today’s Hit is tomorrow’s niche”.
The Long Tail effects on culture: News, Television, movies, etc. are only beginning to be felt
The Imperatives of a long tail business: Make everything available, and help me find it.
One price, distribution method, or product does NOT fit all. Offer choice.
Point to Ponder: Economics is, at its very roots, the study of scarcity. However, when marginal inventory, distribution, and product costs approach zero, where does that leave 230 years of economic study?
