The Long tail


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A lecture about the long tail. The book written by Chris Anderson

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  • The Long tail

    1. 1. The long tail Raymond van Dongelen, More choice, changing demand
    2. 2. Contents <ul><li>Big picture </li></ul><ul><li>Scarcity as dominant factor </li></ul><ul><li>Democratization of important factors </li></ul><ul><li>Examples and risks </li></ul><ul><li>Long tail business </li></ul>
    3. 3. The big picture <ul><li>From a Mass society to a Network Society </li></ul><ul><li>Mass society: Society in groups, usually based on location. Media reaches big masses. Few dominant media (television/ radio) </li></ul><ul><li>Network society: Individual is the basis. Individual connects to other people. Media are mass media + smaller media to connect individuals </li></ul>
    4. 4. Scarcity of shelf space <ul><li>Until recently we had: </li></ul><ul><li>Limited shelf space </li></ul><ul><li>Costs for having articles in your store </li></ul><ul><li>To use one simple taxonomy to organize a store </li></ul><ul><li>The need to select only the most promising product </li></ul>
    5. 5. Hit driven culture <ul><li>Limited choice </li></ul><ul><li>Products that are no hits, are misses </li></ul><ul><li>Stereotyping an audience </li></ul><ul><li>Pre-filter products </li></ul><ul><li>The only success is mass success </li></ul><ul><li>Reinforcing (a hit is a hit because it’s in the the charts) </li></ul>
    6. 6. Long tail
    7. 7. End of the hit culture <ul><li>Online there is: </li></ul><ul><li>Unlimited shelf space </li></ul><ul><li>Practically no cost to “store” goods </li></ul><ul><li>Use multiple taxonomies (e.g. product can be “stored” both in products under 20 euro and consumer electronics) </li></ul>
    8. 8. Six themes long tail <ul><li>Far more niche goods than hits </li></ul><ul><li>Cost of reaching niches is falling dramatically </li></ul><ul><li>Filters can drive demand down the long tail </li></ul><ul><li>The demand curve flattens </li></ul><ul><li>Many niche products are a market as big as the hit market </li></ul><ul><li>Natural shape of demand is revealed </li></ul>
    9. 9. Power to reach niches <ul><li>Manga lovers? </li></ul><ul><li>Bollywood lovers? </li></ul><ul><li>etc. </li></ul>
    10. 10. Three forces <ul><li>Democratize production </li></ul><ul><li>Democratize distribution </li></ul><ul><li>Connect supply and demand </li></ul>
    11. 11. Democratize production <ul><li>Why I did not make a hit movie: </li></ul><ul><li>No access to the necessary tools </li></ul><ul><li>Not enough talent </li></ul>Until recently only selected talent could get access to tools Makes the curve broader (more products)
    12. 12. Democratize distribution <ul><li>The lower the cost of selling the more you can sell </li></ul><ul><li>Inventory on demand (like print on demand, store costs are nearly zero) </li></ul><ul><li>Delivery costs for digital products are nearly zero! </li></ul>Flattens the crurve
    13. 13. Connecting supply and demand <ul><li>Lower search costs for consumers (anything that gets in the way of finding) </li></ul><ul><li>Use the knowledge of the crowd </li></ul><ul><li>Encourage to search in niches </li></ul>Changes the form of the curve
    14. 14. Power of crowds <ul><li>The new taste-makers are people like us </li></ul><ul><li>“Amplify” word of mouth by using tools like recommendations, blogs, people who bought this also ..., celebrity playlists </li></ul>
    15. 15. Filtering <ul><li>Top tens contain little information (much noise) </li></ul><ul><li>Use information learned from other users </li></ul>
    16. 16. Examples <ul><li> </li></ul><ul><li>google adsense </li></ul><ul><li>iTunes store </li></ul>
    17. 17. Dutch public broadcasting <ul><li> shows a lot of the shows on dutch public television </li></ul><ul><li>How can they react to the new challenges? </li></ul>
    18. 18. New age: the daily me? <ul><li>“See only what you want to see, hear only what you want to hear, read only what you want to read. In cyberspace, we already have the ability to filter out everything but what we wish to see, hear, and read. Tomorrow, our power to filter promises to increase exponentially.[..]read about only the issues that interest you, encounter in the op-ed pages only the opinions with which you agree.” Cass R. Sunstein in </li></ul>
    19. 19. Long tail business (1) <ul><li>Make everything available </li></ul><ul><li>Help me find it </li></ul>
    20. 20. Long tail business (2) <ul><li>Lower your costs </li></ul><ul><ul><li>Digital inventory/ let others manage the inventory (amazon model) </li></ul></ul><ul><ul><li>Let consumers do the work(crowdsourcing) => Cheaper and potentially better </li></ul></ul>
    21. 21. Long tail business (3) <ul><li>Think niche </li></ul><ul><ul><li>One size does not fit all. </li></ul></ul><ul><ul><li>One product does not fit all (Many size fits many) </li></ul></ul><ul><ul><li>One price does not fit all </li></ul></ul>
    22. 22. Long tail business (4) <ul><li>Lose control </li></ul><ul><ul><li>Share information </li></ul></ul><ul><ul><li>“And” not “or” </li></ul></ul><ul><ul><li>Trust the market to do your job (post filter your products) </li></ul></ul><ul><ul><li>The power of free </li></ul></ul>