SFU Pub355: Chris Anderson's The Long Tail and How It Affects Book Publishing

The Long Tail
PUB 355: September 17, 2010
by Monique Trottier

monique@boxcarmarketing.com
You should follow me on twitter @boxcarmarketing

The Theory of the Long Tail

• With the web, the cost of reaching customers has
fallen dramatically.

• More choice in the market signiﬁcantly changes
consumption patterns.

twitter: @boxcarmarketing

• We’ve moved from consuming a small number of
hits and bestsellers to a large number of niche
products.

• Example: Amazon and iTunes

• Source: http://www.novelr.com/2008/02/08/the-long-tail-and-online-ﬁction-how-to-get-
read

The Cost of Reaching Consumers Has
Dropped because of 3 Factors:

• Democratization of the tools for production

• Democratization of distribution

• The ability to connect supply with demand


Democratization:
Tools of Production

• Personal computers, the internet and cheap
technology have given the majority of people
access to tools of production:

• Blogging software like WordPress is free.

• Video and music production software is cheap
- iMovie and GarageBand come pre-installed
on macs.

• Production costs are no longer a major barrier to
entry.


Democratization of Distribution

• With the web, anyone can distribute – there are
no geographical limits and no costs of physical
shelf space or warehousing.


The Ability to Connect
Supply With Demand

• In the past, we found products through mass
media (TV, radio, newspapers and magazines).

• We are in a period of transition, where we now
also ﬁnding products by searching online and
reading peer reviews.

• The web allows us to ﬁnd niche goods that are
tailored to our personal tastes and areas of
interest.


Examples


What the Long Tail Means
for Marketing

• The examples of Amazon and iTunes shows us that customers have
more and more products to choose from.

• Just 25 years ago there were, GUESS HOW MANY

• Running shoe styles

• Over-the-counter pain relievers

• Soft drink brands

• Types of milk

• Choices on a McDonald's menu


What the Long Tail Means
for Marketing

• As marketers, we need to ﬁnd ways to stand out. But how?

• The media landscape has changed. It’s more fragmented. There are
more tv channels, more radio channels, more magazines, more news
sources … This means that as marketers we can’t depend on “mass
media” because it’s not reaching the same “mass audience”.

• Audience attention is fragmented.


• There are 2 ways to think about the Long Tail.

• What it tell us about the market
(number of products, choice architecture)

• What it tells us about marketing
(mass market vs. niche markets)

• Chris Anderson’s “long tail” theory urges publishers to forget hit-
making and instead to take advantage of the near-zero cost of digital
distribution to try and make money from selling small numbers of a
lot of diﬀerent titles.


With the Long Tail, Publishers
Should Be Asking Themselves:
• How do I take my book or newspaper content
and sell it in all diﬀerent channels?

• If I can’t sell exactly the same thing, because
we’ve trained people to think that things online
are free, then what can I get them to pay for?

• Or, how do I just communicate to my audience in
all the places where they are, rather than forcing
them to come to my channel, my newspaper, my
website?


What’s Fascinating about Google,
Amazon, Netflix, iTunes
• Their business model is the clue to how customers behave in
markets of infinite choice.

• Those companies are at the head because they’ve build business
models based on availability, trusted sources, filtering, searchability
and discovery. Those players have the attention because they’re
using technology that responds to what users want to do.

• People no longer only buy what’s available. They buy what they
want. And if they can’t find exactly what they want right away, there’s
the internet—someone, somewhere is offering exactly what they
want.


Anderson says:

• Publishers no longer have packaging,
manufacturing, distribution or inventory
management.

• You only have ﬁnding, making, and marketing.


Did anyone do the math?

• For a popular album that sells 300,000 copies, the creative costs work
out to about $7.50 per disc, or around 60 cents a track.

• Add to that the actual cost of delivering music online, which is
mostly the cost of building and maintaining the online service rather
than the negligible storage and bandwidth costs. Current price tag:
around 17 cents a track.

• By this calculation, hit music is overpriced by 25 percent online - it
should cost just 79 cents a track, reﬂecting the savings of digital
delivery.


So what’s the
business model?

You should follow me on twitter @boxcarmarketing

SFU Pub355: Chris Anderson's The Long Tail and How It Affects Book Publishing

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