Riding the Long Tail


The Long Tail: Combined volume of non-hits often represents the bulk of the market.

Exhibit 12.9   The Long Tail: Combined volume of non-hits often represents the bulk of the market.

Another perspective that has gained much attention since it was conceived of by Chris Anderson, is the concept of the long tail, in the context of the demand for publications and entertainment products and service. The physical world, he pointed out in 2004, is a world of scarcity. Stores have a limited amount of shelf space, newspapers have limited pages, coaxial cables can transmit no more than a fixed number of TV channels, radio spectrums can carry only a fixed number of stations, and there are only 24 hours a day of programming.

To justify their existence in brick-and-mortar establishments like movie theatres, book stores, record stores, DVD rental shops, videogame stores etc., products must deliver returns that cover the costs of manufacture, distribution, rent, and inventory holding. “In the tyranny of physical space, an audience too thinly spread is the same as no audience at all” (Anderson, 2008).

The internet transported us to the world of abundance, of unlimited shelf space, and low manufacturing and distribution costs. With hits and misses on equal economic footing, “popularity no longer has a monopoly on profitability” (Anderson, 2008). Amazon, iTunes, Netflix and a host of other online distributors can viably carry hundreds of thousands of books, songs and movies — and they have discovered that the market for these products does exist.

This is the Long Tail. As depicted in Exhibit 12.9, the combined volume of these non-hits often represents the bulk of the market. For instance, based on the limited data made available, the share of books ranked 10,000+ in sales at Amazon, is roughly 60%. Not surprisingly, companies like Amazon and Netflix that tap into the opportunity that the long tail represents, are growing rapidly.

In the context of media consumption habits, today’s online consumers have unlimited choice. As they explore and discover their unique personal tastes, media consumption on the web is getting shattered into numerous miniscule fragments. Advertisers for mass market brands will find it increasingly challenging to reach target consumers, in substantial numbers, on the internet.

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