With its unlimited shelf space and low overheads, the internet was supposed to flatten blockbuster book, movie and music sales, smoothing the classic demand curve smoothed into a “long tail” that catered to every possible taste. A UK study finds otherwise.
Famously conceived by Wired editor Chris Anderson in his eponymous book, the “long tail” concept has become wildly popular with marketing types, and helped to shape online retail.
But New Scientist draws together a number of studies that show the long tail is having a much more muted effect on our shopping behaviour. It turns out e-tailers are better off focusing on a handful of mass-market money spinners.
The New Scientist’s Exhibit A: successive novels in the Harry Potter series have set consecutively larger sales records despite the internet – and thus the potential long tail effect – growing exponentially in popularity. Blockbusters are getting bigger, not smaller.
iTunes as architype? Nope
Reading the above, I immediately thought: what about iTunes. Surely Apple's download store is the ultimate example of the long tail in action?
Not so. NS continues:
"Will Page and Gary Eggleton at the MCPS-PRS Alliance - a UK body that collects royalties for musicians when their songs are played on air or downloaded - and Andrew Bud from the cellphone software company mBlox have analysed a year's worth of downloads from a well-known internet music store. They found that of the 13 million tracks available, 52,000 - just 0.4 per cent - accounted for 80 per cent of downloads."
Anderson used the rise of DVDs-by-mail order company Netflix to illustrate the long tail effect.
However, a July 2008 Harvard Business Review article found, "The long tail was a great idea but as a business model it was too optimistic." E-tailers moving books and discs are best off if they focus on promoting only 10 or 20 titles in the manner of an airport bookstand – the very antithesis of Anderson’s long tail.
So how are things working out for Fatso, our local equivalent to Netflix?
Back when Sky TV 100%-owned Fatso, chief executive John Fellet told me the service was indeed demonstrating the long tail effect: a majority of DVD orders were not for new releases, but older movies and TV series as customers took advantage of the online service’s huge back-catalogue to browser to their taste’s content.
But there was a catch, as the ever-upfront Fellet admitted: while those who belonged to Fatso were exhibiting textbook long tail behaviour, not that many people were actually joining the service, which he describes as yet to prove its viability (Fatso recently merged with its two rivals).
Still, Fellet wasn’t giving up on the concept. Even if things don’t work out for Fatso, its lending pattern points to how subscribers could behave with digital movie downloads – a truly unconstrained inventory.
Rule of the pack
Yet here we run into a second anti-long tail effect: peer pressure.
You might think the internet’s rapid communication would help fuel the long tail, as our tweets and Facebook posts and other online favourites lists help alert others to cult hits or niche works, broadening our freinds' horizons.
But a Columbia University study of 14,000 teenagers finds the opposite effect at work. Sociologist Duncan Watts divided the teens into two groups: one who could see what each other were downloading, and one which couldn’t. In the former group, the pressure to follow peers saw blockbuster hits get bigger.
Paradoxically, the internet's almost limitless freedom of expression has only amplified the rule of the pack.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- BizDojo parent BDG group settles to avoid liquidation
- Coalition’s R&D tax break ‘unworkable,’ ‘uncompetitive’
- Netflix reveals record quarter, and a focus on partnering with the likes of Sky TV
- AMP NZ distances itself from Oz parent's woes
- Fonterra study will be independent, Shareholders' Council says