Mac129 The Long Tail

The long tail
mac129
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Overview
Chris Anderson
Editor-in-chief of Wired
The Long Tail: Why the Future of Business Is Selling Less of More (2006)
Free: The Future of a Radical Price (2009)
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Sales
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What just happened?
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What just happened?
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What just happened?
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‘[Amazon] created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion. The result: rising demand for an obscure book.’ (Anderson, 2006: 16)

New economic model:infinite choice?
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New economic model:infinite choice?
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Hits vs. misses
20th century
National favourites
Movies
Songs
Books
Games
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Hits

Hits vs. misses
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‘Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching - a market response to inefficient distribution.’ (Anderson, 2006: 16)

Hits vs. misses
20th century
National favourites
Movies
Songs
Books
Games
Physical world
Locality
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Hits

The tyranny of locality
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Local multiplex

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Local multiplex
Average film needs 1500 people over 2 weeks
Average cost of ticket £5.00
1500 x 5 = rental cost
£7,500

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Local multiplex
Released 4/12/09

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Local multiplex

Hits vs. misses
20th century
National favourites
Movies
Songs
Books
Games
Physical world
Locality
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Hits

Hits vs. misses
20th century
National favourites
Movies
Songs
Books
Games
Physical world
Local
21st century
Fragmented tastes
Movies
Songs
Books
Games
Digital ephemera
Dispersed
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Hits
Misses

Scarcity vs abundance
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Power curve (aka Pareto principle)
1906
Vilfredo Pareto
80% of land in Italy owned by 20% of population
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Income earners (%)
Population (%)

1906
Vilfredo Pareto
80% of land in Italy owned by 20% of population
80-20 rule
Supply side economics
Finite physical resources
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Human productivity (%)
Time available (%)

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Scacityvsabundance
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Robbie Vann-Adibé:
"What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?"

Scacityvsabundance
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Robbie Vann-Adibé:
"What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?”
98%

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With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a ‘miss’ sold is a sale just like any other sale, - it has the same margins as a hit. A hit and a miss are on equal economic footing, both are just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.
Anderson, 2004

Markets without ends
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2004: 75,000 songs
2009: 5 million songs
Average number of song plays (%)
Popularity of song (%)

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This is the Long Tail
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‘You can find everything out there on the Long Tail. There's the back catalog, older albums still fondly remembered by longtime fans or rediscovered by new ones. There are live tracks, B-sides, remixes, even (gasp) covers. There are niches by the thousands, genre within genre within genre (imagine an entire Tower Records devoted to '80s hair bands or ambient dub’.
Anderson, 2006: 22

This is the Long Tail: music
Digital = < risk?
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Tower Records (US)
Zavvi (UK)

This is the Long Tail: books
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‘The average Borders carries 100,000 titles. Yet more than half of Amazon's book sales come from outside its top 100,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are’
Anderson, 2006: 23

New media, new rules
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Rule 1: Make everything available
Rule 2: Help me find it

Questions
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Can you identify a number of online businesses that function on the basis of the ‘long tail’? Who are their physical world rivals?
Can you identify any physical world products or services that could benefit from adopting ‘long tail’ working practises?
What kind of barriers are there that prevent businesses adopting ‘long tail’ working practises?
Fashion industry?
Food production?
Education?

Mac129 The Long Tail

by Rob Jewitt

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