THE LONG TAIL – Is it worth tapping into?

Prior to introduction and widespread acceptance of the Internet, were we living in a world of scarcity? If we wanted to watch a movie, we had no option other than current hits or some other local popular movies. But, we can now find whatever we need. We have unlimited access to movies, sound tracks, books and so many other things published and released throughout centuries and which were not necessarily super hits. So are we now living in a world of abundance? If yes, how this transition took place? Chris Anderson explains this phenomenon in his book “The Long Tail” – Why future of business is selling less of more. The Long Tail is an interesting book, which makes you think all the way while you are reading. The book explains how the Internet has enabled bottom feeding and has created niche markets, all of which if combined together may overshoot the mainstream market! The book revolves around a demand graph, which has a peak and then a gradual diminish towards the right and after a cut-off point; the rest of the region is named as “The Long Tail”. This diminished tail of demand looks unattractive but it actually extends till infinity.



According to the author, the Internet has freed us from the “Tyranny of Locality”. Initially sale of books, CDs and DVDs were limited to the physical location of retailers. Moreover these retailers had limited shelf-space and thus sold only hits. Cost benefit analysis pushed these retailers to keep only those items, which were in much more demand over others. Rhapsody an online subscription based music streaming service has now more than 9 million tracks and each of these tracks is downloaded. The long tail has everything we may wish. In-fact when we combine the total non-hits present in the long tail, they create a rival market to the hits called as -“The Hidden Majority”. Youtube.com is again a great example of the long tail where long unavailable videos all of a sudden created a market that never existed.

With advancement in the Internet, the costs of reaching niches have been falling considerably. Three forces that are behind this and are enabling the long tail: democratization of production tools i.e. commoditization of PCs, democratization of distribution tools i.e. commoditization of the Internet as a mass distribution channel and lastly connecting supply and demand.

The author gives example of “Amateurs VS Professionals” and argues that similar to the long tail, amateurs are influencing the world more than professionals. However I feel that democratization of production tools does not necessarily signify that the quality of production will be accepted. The Wikipedia is an easy example of amateur’s collection of vast pool of knowledge. The trade-off is that you can never trust this vast knowledge base; on the other hand you can always rely on the Britannica. The author makes it look a bit easy to influence the long tail market however the realty is that the customers in the long tail may be the toughest customers to deal with. Though the Internet has enabled us to reach these customers, however we still lack in terms of understanding the exact needs that exists in the long tail. Simply putting a long table does not mean you have an increased guest list!

According to the author, Sears is a wonderful example that how this long tail was reached and satisfied. However the story is too old and reaching the long tail now requires alignment of more complex resources. No doubt that the Internet provides us a way that reduces the cost of reaching this niches, however tapping these niche requires specialized resources, which might outweigh savings that comes from the Internet. I my view, the long tail still remain too costly to chase! I might like to have second mover advantage to tap “The Long Tail”.

The author also discusses the future of marketing through “Blogs” and user generated contents. The book provides some interesting examples of word of mouth marketing tools through popular blogs such as “Boing Boing”, “Engadget”, “PostSecret” and “Daily Kos”. The book discusses music industry, books and entertainment industry again and again. There are other industries that are yet to tap the long tail and the most potential one is the philanthropy industry. The author repeatedly talks about the increased relevance of filters both pre and post filters. There is no doubt that emerging technologies has enabled Google to apply these filters to understand us better and return us the pages and links, which we would prefer to view over others. Rhapsody has also been successful to push customized popular tracks to its numerous users. However when users return to websites again and again after months, the filters still remain pretty much the same. This brings us to an interesting argument that up to what extent Google or Rhapsody has aligned its resources towards bottom feeding.

It is compelling that how the author comes down heavily on 80/20 rule and provides some really good examples against it. I had a perception that this rule cannot be generalized for every industry, however the author generalizes 80/20 rule to kill it. After years of solving organizational problems around IT and operations, I still believe that solving twenty percent of problems, leads to increase in eighty percent of organization efficiency. However, the author does well in convincing that “The Long Tail” is all about defying 80/20 rule.

Throughout the book I was guessing that whether providing more and more information to the customers is a good choice or not? It might lead to adverse effect or may even backfire. The author discusses this in later chapters. He gives an example of a jam selection event at a superstore out of 24 types of jams. The result was that as the variety in jams increased, the buying tendency of customers decreased. However the author counter argues that if the same amount of information is provided through the Internet in a structured way, with freedom to look for more information through search engines, it will not at all confuse customers!

Overall this book is happy reading, especially for someone interested to explore the world of electronic marketing. Among some other books I read in the past that includes “Built to Last” and “The Innovator’s Dilemma”, “The Long Tail” provides a more futuristic view of ever changing business landscape.

©2008 Awaneesh Shatmanyu