The Long Tail: Why the Future of Business Is Selling Less of More

I'm a decade late, but I've finally read The Long Tail. The nice thing about having read this now is that it's clear just how true the vision of this book really is. From the entertainment media that Anderson analyzed to Kickstarter moving up the starting point of the long tail of physical goods from post-manufacture to pre-manufacture, we live in a world where niches are normal. This isn't to say that we've fully adapted to them or fully realized the opportunities, but being a long tail consumer is now mainstream.

Even though the ideas in this book are now common place, Anderson's book still provides a useful framework for thinking about the long tail. The first, and perhaps most important thing to remember is that the long tail is show more still the long tail. The still are hits. Even within niches there are hits and tails. However, what the long tail represents is moving from a world where access to content is cut off after the short head (e.g., because of limitations in physical shelf space) to where availability extends far beyond what use to be available.

Anderson models three factors as driving the shift to the long tail. The democratization of the tools of production allows many more people to create content. Talent is not limited to those who become popular, so some of this content will be quite good. Just as important, some of this content may be truly excellent but in a specialized area that doesn't have mainstream appeal. My personal favorite example is video blog style adaptations of classic literature -- something I love, but which would never get made if the only distribution channel were main stream media.

Because there is no so much content, aggregation and distribution mechanisms become vital to success. Aggregation of digital information takes the expected forms -- search engines both general and specialized -- but aggregation in the physical world also aids the long tail. E.g., centralizing goods in warehouses (or decentralizing through peer-to-peer selling) can give consumers more choice than just relying on what's available in local stores; a nation might have enough demand to make a product worth stocking where a city does not.

But so much content, is not useful if it cannot be easily found. Most of what is in the long tail is low quality, and much of it might be great but not what you are looking for. The long tail is only valuable if you can find what you want. Ranking and filtering provide this search functionality. Another important effect of ranking and filtering is to lead people down the tail. Most people don't start with niche tastes. These tastes develop over time as individuals build more expertise in that niche.

None of these ideas is particularly complex, but that is what gives them power. The long tail is interesting because it is, to some degree, inevitable in a world of dramatically increased availability.

One quibble I had with the book is Anderson's misinterpretation of Barry Schwartz's frame of satisficing and maximizing. Schwartz and Anderson likely do have fundamentally different views of the value of choice. Nonetheless, Anderson still misrepresents satisficing. He represents it as settling for the choices available. Schwartz's presentation of satisficing is more nuanced -- not, admittedly, because he thinks a flood of choice is good but because he acknowledges that it is inevitable. As Schwartz presents it, satisficing is not about settling but rather about being clear about what you want. If you're clear about what you want, you can change your mindset to be satisfied with once you've found options that fit your criteria even if you later learn of new options.

Overall though, this was worth the quick read. show less

Great book. Anderson illustrates a new theory very well and expands and supports it throughout the book. Does NOT suffer from the "Non-Fiction Fade" like so many pop science / pop economics books do (the tendency to start with a strong and interesting premise and then devolve into weaker arguments and logical stretches in an apparent effort to fill a book with a journal article's worth of material), although he first described the concept in a "Wired" article. As with any description of a new concept, there are multiple examples that may seem repetitious but really serve to illustrate from multiple perspectives. Since the book is only about 225 pages long, I didn't reach that "milking it" or "beating a dead horse" feeling at all with show more this book and I often do with these kinds of books.

Anderson not only describes a new economic model, but also analyzes it - breaking it down to the three components that make it work - the democratization of production capacity, the democratization of distribution capacity, and the linking technologies that bring them together with interested consumers. I think it's a must read for anyone interested in the way the digital economy is different and who thinks about how it is going to change culture and society. show less

The Long Tail is paradoxical. The economics of the Internet favors niches, yet also favors large aggregators, small numbers of large companies such as Google or Amazon or Ebay at the head of the niche aggregation curve where most business is done. The Long Tail opens new opportunities for niche aggregation, but niche aggregation requires high volume, it works for the few large players in the head of the tail. The first one to successfully capture a long tail opportunity is winner take all. This is a constraining factor of the technology that creates a few large dominate players, just as broadcast TV with a limited number of channels was a constraining factor that created the three big networks NBC,CBS,ABC.

If the number of niches are show more unlimited on the Inernet, what is the constraining factor that creates a few large players like Amazon and Ebay?

Information and goods on the Internet are in effectively unlimited supply (roughly speaking). Economics is defined by what is scarce. So if in the online world information and products are not scarce.. what is, what is the online economy based on? The long tail is a result, an end product, of consumer attention: eyeballs. Consumers attention is the scarce commodity, when products and information (and information about products) are in unlimited supply, the constraining factor is peoples time and attention - the long tail graph is an artifact of where consumer attention is focused at any given moment. See Richard Lanham's "The Economics of Attention: Style and Substance in the Age of Information" (2006) for IMO an excellent recent book on this subject that delves further into an "economics of attention" (BTW the bibliography of The Long Tail is short mostly websites and magazine articles).

Overall the long tail is probably useful to finding the inefficiencies from the old models of scarcity adapted to the new internet models of abundance - shame on any reader who does not come up with at least one new way to become the next Internet billionaire. Probably the greatest legacy of this book will be to introduce "power laws" into mainstream vocabulary in the form of the proper noun "Long Tail" (capitalized), and power law thinking can lead to powerful results (see Google's search algorithm for one). show less

It should come as no surprise that the editor of Wired magazine, that bible of all things technological, should be overly enamoured with the significance of the internet, but even so, only someone totally besotted with it, and apparently unaware of the world beyond it, could have written a book like The Long Tail, being as it is informed so deeply by such a utopian (or dystopian, depending on how you look at it) view.

Chris Anderson believes the internet has changed the fundamentals of economics, for all places, for all time. He's not the first to think this, of course: legions of young investment bankers, now deceased, made a similar mistake in those first few giddy months of the new millennium before the bubble burst. I can still show more remember the hubris; the outrageous scepticism which greeted ginger mumblings that things might be in la-la-land. Traditional business models were over. No longer did you need to have anything old fashioned like cashflow, or a business model which might actually render some profit. Well, those young bankers, and their clients, got burned, and even now their successors and survivors shudder at the prospect of making the same mistake. And while Chris Anderson hasn't made that particular mistake, he's made an analogous one: he's assumed that some undeniable developments in that (actually fairly slim) part of the economy that he knows about will necessarily revolutionise the whole caboodle.

For Anderson now, just as for those currently redundant young masters of the universe then, we're on the cusp of a brave new world.

And, just as they were not, he's not completely wrong, either: There *is* a phenomenon called the long tail (there always has been; the difference is that it's now sometimes economic to venture down it). And it's true, that opportunity it has been created by confluence of technological developments we're beginning to call the digital revolution. It's also true that the internet has radically changed, forever, some business sectors: those that deal in the digital revolution, and in particular "intellectual property", which has been most profoundly affected by it: publishing; the music and film industries, and the industries surrounding the web itself.

But it needs to be kept in perspective. For the rest of the economic world - and for those not dazzled by the e-froth, that's quite a lot of it - it's business as usual. The long tail won't matter a damn. As long as there's a physical good that needs to be manufactured, shipped and warehoused somewhere pending sale, the long tail - which is as there as it ever was, will be just as inaccessible.

The point is that the long tail wags only for those artefacts whose main value is intangible - which can be practically separated from the physical "thing" that contains them. For example: shorn of the intangible intellectual property inside it, the physical manifestation of a book, as an artefact, is (largely but not completely) valueless. A compact disc, as an artefact, is completely valueless. The digital revolution has allowed each of us, as never before, to quickly separate the valuable bit from the physical bit. Being a string of ones and zeroes, and thanks to Moore's Law, the cost of replicating the valuable bit of intellectual property is nil. Once consumers can accept the valuable bit without its "thing" the supply/demand curve looks very different, since the supply curve starts at an enormous amount, for one unit, then immediately drops to a micron above zero for the second, and flatlines there until infinity. The only limiter is demand. And, though Anderson doesn't think so, demand isn't unlimited. You can only listen to so many CDs, and read so many books.

But for trucks, and bricks, and oil, and commodities most of the long tail effect will be muted at best, and unobservable for the most part. Sure: businesses will be able to minimise warehousing costs off the high street, on a more dispersed basis, but it won't do much other than save some marginal costs. Someone still needs to store your oil. Oil isn't a collection of ones and twos. Neither are bricks, nor SUVs, nor - well, most things in the economy. But, this doesn't seem to faze Anderson, who rounds off by saying, apparently without irony, that when the technology of "solid state printers" (which render three dimensional objects in polymer from computer instructions) develops, no longer will be need to warehouse much at all. I guess we'll just teleport things to our customers. Good Grief.

Anderson makes some enticing comments about the inherent shortcomings of intellectual property law given the digital revolution, but then doesn't really follow them to their logical conclusion. It could have been a nice, and ground-breaking, book had he done this, but the opportunity was lost, and this book sits a fairway down the tail of decent Web 2.0/new technology business books floating around at the moment.

Curate's egg. show less

The Long Tail: Why the Future of Business is Selling Less of More (2006) by Chris Anderson has been so discussed, cited, and praised the past few years that listening to the first few chapters I almost felt that I knew it all already. The basic gist is that businesses can profit from selling just a few units of lots and lots and lots of different products instead of just focusing on selling lots and lots and lots of units of a few "hit" products. On a graph, the traditional hit economy appears as a short head, while the niche economy appears as a long tail, thus the origins of the term. Anderson's original article on The Long Tail is still online at Wired (Issue 12.10 - October 2004) and is worth reading for a summary of the theory show more behind this book.

Anderson contends that the Hit Economy is actually unusual in economic history. Examples of the hit economy include Casey Casem's American Top 40 (which I listened to devotedly as child), television programing dominated by three networks, and blockbuster films. All were designed to appeal to a lowest common denominator to attract as many people as possible with the outlets for production controlled by a few. Prior to mass broadcasting culture was regional, and thus the things people bought as well. Today, internet communities are gathering around common interests in niches similar to the old regional cultures although the people using them are geographically disparate.

While Anderson credits the internet with providing the resources that allow the Long Tail to flourish, he also provides a history of the Long Tail dating back to Sear, Roebuck's Wish Book in 1897 and 1-800 numbers in the 1960's. The internet allowed the democritization of the tools of production and distribution and allowing enterpreneurs like Jeff Bezos of Amazon and Jimmy Wales of Wikipedia to find success. The economics of scarcity were replaced by the economics of abundance. It turns out that customers really like lots of choice contrary to the earlier conventional wisdom. The difference is that consumers need filters like recommendations and reviews.

I like the examples Anderson cites such as the history of house music, the study of jams, and the punk rock revolution. He makes a very compelling argument of the advantages of niche markets for the future of business. On the other hand, I wonder how permanent this change is. Anderson makes a point of the last big blockbuster pop album being an N*Sync record from 2001, their success in sales not repeated since. Yet this is a very short period of time. Despite the influence of the internet on exposing niche bands to communities who'll support them, whose to say that commercial forces won't co-opt these new tools of distribution and production to recreate the Hit Culture? I've read bloggers who are already complaining that blogs are no longer successful unless they have a staff of multiple writers with commercial support behind them. Another example was the success of the internet phenemom Lonely Island conquering Saturday Night Live with their "Lazy Sunday" skit. But is that the case? Could it not be said that the SNL's of the world will just keep swallowing up the Lonely Islands? show less

I picked up a bunch of business books last weekend at the secondhand bookshop and have learnt a valuable lesson - whilst fiction books still remain relevant even if published 20, 50, 100 years ago, the same cannot be said for business books, particularly those orientated around digital businesses. Note to self - check the publication date next time!

This would have been a great read had I read it in 2006 when it first came out, but 13 years later it is outdated as technology has moved so quickly. To [[Chris Anderson]]'s credit he was pretty much on the ball in this book about the extent to which the internet would affect our shopping habits for music, television and movie media and general products. By 2006 many of these patterns had show more already started to emerge, but were nowhere near developed to the extent they are today. For example, he refers to Blockbuster in this book, which hadn't yet been completely killed off by the market shift towards Netflix.

It was still an interesting read, as the long tail (i.e. finding hugely successful markets at the niche end of shopping habits) is what's made zillions of dollars for Jeff Bezos and lots of smaller entrepreneurs. Very simply, although less people buy certain goods at the long end of the tail (on a graph of purchasing habits), when you aggregate the numbers of those people times the number of niche products they're interested in purchasing it creates a huge overall market, and online stores (which aren't limited by physical shop shelf space) have enabled businesses to capitalise on that.

Still some interesting points to take from the book at a general business level, but just too outdated for where we've moved on to (Instagram wasn't even a twinkle in someone's eye in 2006, and Etsy and YouTube were just getting going). I think there's a more up-to-date version of this book that would have been a better read.

2.5 stars - interesting and well written, but just dated. show less

I was very excited to read this book. It's a neat idea that I felt captures the 'silver lining' to online retail. I saw it as leveling the playing field between the big guys and the little guys.
In a nutshell, Anderson says that, thanks to the Internet, web-based businesses can hold their own against big box retailers. Since big box retailers have a limited amount of shelf space they can't carry everything. So they only carry a few things they can sell a lot of. Whereas online shops have no physical limits and which allows them to sell the "fast moving" items as well as the item that sells once every 2 years.
So the big boxes sell one item. But it's bought 1,000 times and the little guys sell 1,000 items but only make one sale per show more item.
This idea opens up all kinds options for web stores to carry niche items. I believe the world would be richer for it. But I have some reservations with Anderson's ideas and methodology.
This book started as a blog Anderson was keeping. Back in the beginning he interviewed some online businesses and formed his ideas and theories. Over the years, thousands of folks commented and helped out and a book was born. But what Anderson didn't do is go back to those businesses to see if his ideas panned out. He's just now written the book, but based on the old initial data. When reporters asked him if, in the years it took to write the book, he was able to see his ideas bloom at some of the companies he mentions, he said he hadn't looked. Why wouldn't he look?
If he had he'd see that a couple of the companies he bases his thoughts on had changed their strategies and made adjustments, because things weren't working out. So Anderson is writing from old assesments. No real harm in that. Unless you are a small business owner and think you just ran across a rock solid business plan and try to implement it yourself. So be careful.
So I think the basic idea here is solid. Or maybe I'm just hopeful. But I have serious problems with Anderson's case studies and evidence.
For more information look for an article that ran in the Wall Street Journal by Lee Gomes in the summer of 2006. show less