The Long Tail
Book review:
The Long Tail is an important book for business, IT and culture in the future. The book look into the power of our internet that have evolved into a potent force after the tech bubble. You may think it is another book that speak the good of technology and all the jargons only geeks can understand. However, the book actually dealt with the economics of internet and suggest how business can benefit from it.
Basically, Chris Anderson is trying to say that our consumption is shifting to the niches with the help of internet and technology and allowing us to find things that we like (of specific interests rather than generic interests). This has caused the rebalancing of Pareto’s 20/80 principle. The long tail part gets thicker and the head gets thinner.
If what he says turn out to be true, the way we consume products and run our businesses will be revolutionalized. Read it as it give us an insight of the future.
Book summary:
Long tail is just culture unfiltered by economic scarcity – abundance. This economy is making changes in the proportion of Pareto’s 80/20 rule. Hits/blockbusters are selling less in quantity and niches are becoming more popular. Head = hits and Tail = niches. Power is shifting from big producers to the masses.
Three forces of Long Tail (why Long Tail arises and thrives)
| Force | Business | Example | Result | |
| 1 | Democratize production | Long Tail Producers, Toolmakers | Digital videocameras, desktop music and editing software, blogging tools | More stuffs created, increases the length of the tail |
| 2 | Democratize Distribution | Long Tail aggregators | Amazon, eBay, iTunes, Netflix | More access to niches, thickens the tail |
| 3 | Connect supply and demand | Long Tail filters | Google, blogs, Rhapsody recommendations, and best seller lists | Drives business from hits to niches |
Context out of abundance
In a world of infinite choice, context, not content is king. Helping users find what they want in a world of abundance. For e.g., Rhapsody has billboards customized for each user.
We are moving from an information age (abundant information) to the recommendation age (presenting contextual information from the abundance)
|
Information Age |
Recommendation Age |
|
Abundant information |
Filter out contextual information |
|
What the seller says |
What reviewers say |
Rankings should be done within a genre (or subgenre) and not across genres. Some genres are more popular than others but that does not mean there are no leaders in these genres.
Filters: Guesswork vs measurement
|
Limited Shelf Space |
Unlimited Storage Space |
|
Atoms |
Bits |
|
Uses pre-filters (predict what consumers generally like) |
Uses post filters (measure consumers’ behaviour) |
|
Filtering carried out by store managers, management |
Filtering carried out by individuals using tools like Google |
|
Serves generic interests |
Serves specific interests |
2 Principles of Long Tail
1) Make everything available
2) Help me find it
9 Rules for Long Tail aggregators
- Move inventory way in (large collection) or way out (store as bits not atoms)
- Let customers do the work (“crowdsourcing”)
- One distribution method doesn’t fit all – Offer more than one distribution method. Different customers have different preferences in consuming goods and services. E.g., you can get a particular video fro podcast, video on demand, download, satellite broadcast, web streaming, purchase/rent DVD.
- One product doesn’t fit all – One size fits one but many sizes fit many.
- One price doesn’t fit all – Offer a price at one time. E.g. in eBay, buy now price is higher than auction price. iTunes offers sale of single track but cheaper if bought as part of whole album.
- Share information – Share reviews or specifications that can answer questions that could have halted a purchase. Translate buying patterns into useful recommendations.
- Think “and” not “or” – Offer this and this, not this or this – don’t limit choices.
- Trust the market to do your job – Use post filters, not pre filters. Let customers decide what they want. Measure their behaviour and respond.
- Understand the power of free – Offer the services free to attract the traffic (like TV).
For Singapore readers: Buy at S$18.45 here!
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Excellent summary of the book!
The only thing that I think you got wrong though is this statement:
“The long tail part gets thicker and the head gets thinner.”
Actually, the head remains just as thick, as you can see. Its the tail that is getting a LOT LONGER (thus the “long tail theory”), but remains just as thin. Many people will be selling many many many goods, but only at small quantities per person.
In other words, its going to become a world of small entrepreneurs, no longer about big ones dominating the scene.
If I did not remember wrongly, the author mentioned that “the head gets thinner and tail gets thicker” because people now can access their niches much easier than before (thanks to the power of internet). This means that they no longer need to be limited by mainstream culture (the head), so they will go out and look for their personal niches and in a way, increase the sales of smaller enterprises (thickens or lengthens the tail).
The head may still be thicker than the tail, but it may not be as thick as before. Maybe instead of dominating 80% of the market, they only dominate 60%.
Pls correct me if I am wrong :)
I don’t remember Chris saying that it gets thicker, but if you do, then he said it. :D
Bottom line is that the tail gets more consumers now. Definitely though, in the future, he predicts the head will not be at 60%, 50% or even 40%.
His argument is that the Pareto Principle of 80/20 will disappear altogether due to the internet and that the head will still be thick compared to the tail but that it will reduce to 20% of total sales and the very very very long thin tail will constitute 80% of total sales- the exact reverse of the situation today.
Haha. I cannot confirm what he said exactly as the book is not with me now. But one thing for sure, you are right that the tail definitely gets longerrrrrr…