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THE LONG TAIL

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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

Touching The Void Into Thin Air

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What just happened?

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What just happened?

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What just happened?

‘[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)

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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

Hits

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Hits vs. misses

‘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)

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Hits vs. misses

20th century National favourites

Movies Songs Books Games

Physical world Locality

Hits

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The tyranny of locality

Local multiplex

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The tyranny of locality

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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The tyranny of locality

Local multiplex

Released 4/12/09

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The tyranny of locality

Local multiplex

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Hits vs. misses

20th century National favourites

Movies Songs Books Games

Physical world Locality

Hits

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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

Hits Misses

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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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Power curve (aka Pareto principle)

Income earners (%)

Population (%)

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Power curve (aka Pareto principle) 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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Power curve (aka Pareto principle)

Human productivity (%)

Time available (%)

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Power curve (aka Pareto principle)

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Scacity vs abundance

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?"

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Scacity vs abundance

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

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Markets without ends

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Markets without ends

Average number of song plays (%)

Popularity of song (%)

2004: 75,000 songs2009: 5 million songs

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Markets without ends

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This is the Long Tail

‘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

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This is the Long Tail: music

Digital = < risk?

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Tower Records (US) Zavvi (UK)

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This is the Long Tail: books ‘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

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New media, new rules

Rule 1: Make everything available Rule 2: Help me find it

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Questions

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?