The Long Tail

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Chris Anderson’s ‘The Long Tail’ was first published as an article in a 2004 edition of the online magazine Wired. Later, in 2006, after having received rave reviews for his work, Anderson worked up his idea into a book. Though I had heard of the book before, it was Nassim Nicholas Taleb’s word about Chris Anderson in ‘The Black Swan’ that actually triggered my interest to read ‘The Long Tail’.

‘The Long Tail’ builds upon the well-acknowledged premise that ‘popularity’ no longer has a monopoly on profitability and that the demand for ‘not-so-popular’ products, when aggregated, can rival the demand for blockbuster products. Anderson, in fact, starts the book by shedding light upon the hit-driven culture of 70s and 80s and how the onslaught of the Internet changed the rules of engagement forever. Anderson endorses the Internet’s role in dismantling the roadblocks between demand and supply, calling it a disintermediation force. Matter-of-factly speaking, it is this positively destructive nature of the Internet that has led to the transformation of the business landscape.

In ‘The Long Tail’, Anderson highlights an interesting behavioral facet of human personality: our latent proneness to look for the offbeat stuff in addition to the overwhelming craving for the mainstream material. This factoid has never so emphatically articulated. Anderson breaks it down that with the Internet, people discovered what they were sorely missing, but never felt the desire to discover before the Internet. It’s this tendency of latent demand that makes the theory of the long tail practical. In short, long tail theory predicates that never ignore what you can’t notice! Anderson also outlines three Internet-enabled forces that contribute to the formation of the long tail:

a) Internet democratizes the tools of production. If you have the talent, you can create your own identity and reach out to your audience.

b) Internet democratizes the tools of distribution. Creating your identity is one part, the other part is reaching out to your audience. Courtesy Internet, you don’t have to worry about that either.

c) Internet connects supply and demand.

Anderson  borrows the concept of ‘The Long Tail’ from the world of statistics. In statistics, a long tail is a type of distribution wherein a high-amplitude population is followed by a low-amplitude population which gradually tails off without running out.

Author applies the statistical concept of the long tail to the world of retail, especially, music, video rental and books. Take book retail business, for instance, a couple of decades back, who could have guessed that a bookstore of the magnitude of Amazon.com could ever exist. Traditional rivals like Borders and Barnes&Noble are big, but nowhere near Amazon. On Amazon, consumers can search for books ranging from the standard topics to never-heard-of themes. It’s these unconventional titles that form the long tail of Amazon and according to the author, this tail contributes to one-third of Amazon’s total profits from book sales. Succinctly, a long tail can have millions of niches embedded in it and mostly, these niches comprise good, mediocre and downright avoidable stuff. But who cares as long as there are consumers in these niches who want to buy them.

Anderson asserts that the economics of traditional retail have always been unforgiving. Limited shelf-space, fierce rush to promote hits in order to justify inventory costs, geographic limitations – all these issues complicate the life of retailers while limiting the choice for consumers simultaneously. In comparison, Internet obviates the need for the physical availability of products. Unlike traditional retail, online retail provides its consumers tools like  recommendations and rankings, which, statistically, drive the demand from the head of the curve to way down the tail. It will be a safe assumption that with the radical improvements in technology, the concept of the long tail will only grow in importance.