TECH TALK: Good Books: The Long Tail (Part 2)

Steven Johnson wrote about the book: It occurred to me reading The Long Tail that the general trend from mass to niche can explain some of this increased complexity: niches can speak to each other in shorthand; they don’t have to spell everything out. But at the same time, the niche itself doesn’t have to become any more aesthetically or intellectually rich compared to what came before. If there’s a pro wrestling niche, the creators don’t have to condescend to the non-wrestling fans who might be tuning in, which means that they can make more references and in general convey more information about wrestling — precisely because they know their audience is made up of hard core fans. But it’s still pro wrestling. The content isn’t anything to write home about, but the form grows more complex. In a mass society, it’s harder to pull that off. But out on the tail, it comes naturally.

An example from the book: Whats extraordinary is that virtually every single one of those tracks [on Rhapsody] will sell. From the perspective of a store like Wal-Mart, the music industry stops at less than 60,000 tracks. However, for online retailers like Rhapsody the market is seemingly never-ending. Not only is every one of Rhapsodys top 60,000 tracks streamed at least once each month, but the same is true for its top 100,000, top 200,000, and top 400,000 — even its top 600,000, top 900,000, and beyond. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if its just a handful of people every month, somewhere in the world. This is the Long Tail.

The New Yorker wrote:

Both eBay and Google turn out, in Andersons account, to be long-tail businesses, too. On any given day, about thirty million individual items are bought and sold on eBay, many of them cheap and obscure. Barely a decade after Pierre Omidyar founded eBay, more than seven hundred thousand Americans report it as their primary or secondary source of income, according to a study by the market-research firm AC Nielsen. For Google, the long tail is populated by small advertisers. Major corporations pay to get their ads placed next to the results of popular search terms, such as luxury S.U.V.s and flat-screen televisions. But much of Googles annual revenue, which now exceeds five billion dollars, comes from tiny companies whose ads appear next to queries like Victorian jewelry and Hudson Valley inns.

The forces behind the long tail are largely technological: cheap computer hardware, which reduces the cost of making and storing information products; ubiquitous broadband, which cuts the cost of distribution; and elaborate filters, such as search engines, blogs, and online reviews, which help to match supply and demand. Think of each of these three forces as representing a new set of opportunities in the emerging Long Tail marketplace, Anderson suggests. The democratized tools of production are leading to a huge increase in the number of producers. Hyperefficient digital economies are leading to new markets and marketplaces. And finally, the ability to tap the distributed intelligence of millions of consumers to match people with the stuff that suits them best is leading to the rise of all sorts of new recommendation and marketing methods, essentially serving as the new tastemakers.

Overall, a book definitely worth reading for everyone in the business of selling.

Tomorrow: The Change Function

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Rajesh Jain

An Entrepreneur based in Mumbai, India.