The 'long tail' myth

KeallHauled

Chris Keall

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.


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4 Comments & Questions

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The ‘long tail’ is about low ‘cost of goods &/or merchandising’ enabling an additional 5-10% of revenue opportunity (sounds good to me!). Using blockbusters as ‘front of store’ focus products is not disputed. I for one purchase a lot of old tracks on beatport.com that I could never get any other way (I have spent over $200 USD in last 12 months). Also worth noting, teenagers, although tech-savvy aren’t exactly that individualistic (despite their protests to the contrary I’m sure), and who didn’t think Fatso was a stink idea in the first place...?

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Your headline doesn't match the facts or the book or the data.

Thor is a myth. Zeus is a myth. Pareto's power law curve and Chris' analysis is in fact correct. Your anecdotes are about a bigger short head, something that is a natural outgrowth of the effect of the long tail.

The fact that I'm reading this blog (something that was impossible ten years ago) is living proof that the long tail works.

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New Scientiest doesn't deny there's more stuff for sale on the internet - and in our case more content - it's just that nobody's buying it. Or necessarily advertising around it, unless it has a blockbuster readership.

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...paragraph three! First, your headline and your lede mislead.

Squidoo.com, the site I run, is 100% long tail, 100% profitable and filled with useful content (and relevant ads to go with it).

New Scientist aside, Amazon gets half its sales from books Barnes and Noble doesn't carry.

Blockbusters matter, no doubt about it. But from television to movies to blogs, the aggregate long tail continues to increase in size and attention.

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