Harvard Study Questions "Long Tail" Theory 177
mjasay writes "Remember 'the long tail?' That was the idea that there was gobs of money to be made in the more obscure tastes of any given market, enabled by the web. In recent research highlighted in the Harvard Business Review, however, the long tail theory comes under withering criticism. Not only is a hits-based business more profitable for vendors according to the new research, but the research suggests that consumers also derive more enjoyment from the hits, rather than the tail. In short, the researchers find that 'the tail is long and flat, and therefore that content providers will find it hard to profit much from it.'" Long Tail advocate Chris Anderson defends his theory, and it seems that most of the debate centers around how you define "head" and "tail."
Already knew this. (Score:2)
Re:Already knew this. (Score:5, Informative)
A lot of the bubble wasn't due to the theory. It's failure was do to bad business. The We Sell Each Product under cost's we make it up by selling more of them. Or lets do it over the web it is only 3 times as harder to do it there then a person can do at home. And the concept a CS degree will help the company more then an MBA. SCREW PROFITS WE WANT COOL TECH!
After the bubble pop the net matured a bit. People didn't jump in thinking they will be rich, just enough to get by. The moderating approach is what saved the net echonomy. the 1990's everyone was trying to get Rich! Rich!! Rich!!!
I don't understand (Score:5, Insightful)
why are they concentrating on how *profitable* the long tail is?
As far as I see it, the long tail isn't about PROFIT, but about how much society wants the entertainment.
How many REALLY old songs would you like to hear again? Well, given that each year older adds another pile of songs, the profit in EACH TITLE is spread thinner and thinner. Because what I'd like to hear again from the 70's isn't what YOU'D like to hear from the 70's.
The long tail is showing that copyright lengths ARE damaging society. And it not being profitable enough to make a business on shows that there is NO BUSINESS LOSS in shortening copyright to a time where works are still wanted.
Really, copyright now is more about the accountants' abject fear that someone else is making money and not them.
Shit, if you're not SELLING a good, why not let someone else do it, or even just release it for free and forget about it? Because in that case, there's no money for you to make. That you don't want to spend the effort to MAKE the money in the first place seems irrelevant to your accounting brain.
So I don't understand the ribbing. It's arguing that it isn't profitable when that's not what the long tail is about. It's about demand continuing BEYOND the profitable age of entertainment goods.
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The long copyright term is not for the one-hit wonder bands, or the b-movie produced during the war to sell bonds. It's for the cream. It's for the Beatles. Cindella. The one in a thousand quality movie or band that people still think have meaning to them even now, 40, 50, 60 years later.
All those still make boatloads of cash for the IP holders.
Everyone else holding IP from way back is holding on hoping for something like the current 'rickrolling' to happen, where suddenly something obscure from wayback
Re:I don't understand (Score:4, Interesting)
Re:I don't understand (Score:5, Interesting)
Then why not make those people/companies pay imaginary property tax on those imaginary properties?
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Really, copyright now is more about the accountants' abject fear that someone else is making money and not them.
Don't you mean lawyers' ajbect fear?
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I'm not familiar with how "the long tail" is normally used, but TFA definitely isn't about copyright lengths. The article's "long tail" refers to obscure products with less sales potential.
For example: very few people like accordian music. So few people that if you built a "brick and mortar" shop dedicated to
Re: "What Society Wants" (Score:2)
I'll leave it to my betters to unearth an official article, but the "hits" concept goes after the broadest common baseline, which means that taking artistic risks gets discouraged.
However, "Society" *does* need a content stock to be able to study from and produce Grace C First Attempts without fear of owing more than the national budget of a small country.
Re:Already knew this. (Score:5, Insightful)
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Redbox only carries hit films (well, they carry some crap too, but the point is, it's a very limited library.)
Of course, Redbox is banking on their convenience and not their selection.
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And Netflix has an extensive collection of Anime, Foreign, TV, obscure movies, etc. That's the reason I subscribe to them. If all I ever cared about was giant $200M grossing movies, I could have kept renting at Blockbuster (and just complained about their constant price raises).
The long tail exists in some areas. But if your store only exists to sell how-to knitting movies you're going to have to keep your costs REAL low to survive. Like... $0.
Just because the long tail lets customers find you (when a bri
Redbox explained (Score:5, Interesting)
Redbox is a vending-machine movie rental system. I walk into the Wal-Mart a mile from my house, and there's this big, well, red box sitting there. It operates on the opposite of the "long tail": it only has a couple dozen of the very latest movies, has many (but not infinite) copies of each, costs $1 per night (just swipe your credit card), keep 'em as long as you want (after a month, just keep it - for $29 you've already paid for it), rental & return is rediculously simple with none of the "video store" hassle.
Instead of having everything anyone might be looking for (the "long tail" model), it has a few things that most people will probably want (say, the "dirt cheap blockbuster" model). Turnover of content is very high, so there is most likely something sufficiently interesting (for a buck a night, that's a lot) there at any time. Content range is very narrow, so customers can browse very quickly; covers of most movies available are shown on the front of the vending machine, so one can review what's available in just a few seconds (a thourough list is available by touchscreen) even while someone else is actually using the machine. And with rentals being just a buck a night, getting something or keeping something a few days is trivially cheap.
It complements Netflix/Amazon thus: instead of getting exactly what I want in a few days, I get something satisfactory right now. My "long tail" providers can find anything I specifically want within a few days, but if I simply want a couple hours' entertainment now I can get something suitable, dirt cheap, in a few minutes. And when I take a rental back, it's just too easy to pick up another. It also fills the gap between "long tail" services and TV's "you'll watch what we want when we want" model.
That the box is located at the entrance to a store which thousands of people frequent with great regularity, rather than being a special trip, completes the winning business model.
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It gets a little hard to tell what's what when someone has his head up his ass and his tail between his legs.
This may be true. May be. (Score:5, Funny)
But then try to explain porn websites. There is a lot of tail to be hit there.
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Re:This may be true. May be. (Score:5, Funny)
But then try to explain porn websites. There is a lot of tail to be hit there.
And lots of head too...
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Yah, but you have to admit that the stuff involving long tails is very much a niche product.
Wish I could help... (Score:3, Funny)
it seems that most of the debate centers around how you define "head" and "tail"."
I'd help but I'd need to link to some pages that I shouldn't browse at work...
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The economics analysis group 'Queen' did what I consider to be the definitive analysis of the 'long tail' in their seminal work, Fat Bottomed Girls [wikipedia.org].
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Just another POWER law ... (Score:2)
e like everywhere
CC.
Bullshit (Score:4, Insightful)
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Re:Bullshit (Score:5, Interesting)
Precisely: their study is flawed, because they're basically saying that by dropping the obscure content that only 1% of their customers want, they're losing only 1% of their customer base (or less).
If they were examining a service that caters _specifically_ to that 1% niche, things would be much different. If your business involves selling purple spikey beanie babies, and you stop carrying the purple spikies, you go out of business. If your business involves selling ALL beanie babies, then you only lose the few weirdos who wanted *ONLY* the spikey ones, if and only if there is a competitor to fill in the void.
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In-N-Out (Score:3, Interesting)
But In-N-Out is successful not because they offer limited choices, but because they do such a good job with the choices they offer. I'm not sure if not offering chicken, salads, etc makes their burgers better, but I know they do what they do better.
Re:Range (Score:3, Insightful)
Definitely count me in this category.
Serious subjective feelings get involved if you know they carry the large range, and that it's not just This Month's Selections.
I decided to spend a couple thousand on books I know I'll *eventually* want to read, but can't stand the Out Of Print process kicking in because they're headed right for the Long Tail.
Stocking Laterally is a huge part of this. If I go on a rampage, I'll tend to buy multiple titles from an author's spread right then, and no other time. Next Month
Re:purple ... (Score:2)
"Buy One Get One Purple Spikey Beanie Babies"
Sounds like a 90's sales pitch tag.
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Not more successful, just that offering a greater supply (Of less popular music) doesn't increase the demand - Which gets a great big "Duh" from Economists around the world.
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I'm not sure where you got 1% from. The claim is that they'd be more successful with the top 10% than the bottom 90%. (Assuming customers would go elsewhere for the top 10% or just not buy at all, instead of switching.)
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Re:Bullshit (Score:5, Insightful)
I can see where low volume stuff isn't worth the hassle.
The whole premise of the Long Tail idea is that it's NOT a hassle for internet companies like Amazon and Apple to keep the low-volume stuff in inventory. That's what gives them an advantage over brick and mortar. If Amazon only sells 5 copies of the The "Long Tail: Why the Future of Business is Selling Less of More" a year, it only needs to keep 5 in inventory. If a chain store wants to sell the book it has to keep hundreds in inventory to ensure they have at least one in each store.
A lot of people mis-characterize the Long Tail as "making money by selling obscure stuff." That's only half of the definition. The other half is building a business where it does not cost you anything to keep lots and lots of obscure things in inventory, or alternatively, having access to millions and millions of customers, so if you sell to 1% of your market, it still adds up to something. Long tail does not work unless all of those 1% niches add up to 80% of the total market or unless you sell to 1% of a billion people. The internet helps businesses do both of these things.
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If Amazon only sells 5 copies of the The "Long Tail: Why the Future of Business is Selling Less of More" a year, it only needs to keep 5 in inventory.
Right, but they don't have to even keep 5 in inventory. All they have to be able to do is deliver each of those 5 copies shortly after they're ordered. Or where it becomes even more clear is in the Amazon MP3 store, where is costs them nothing but a relatively tiny amount of server space to keep an obscure track "in stock".
And this helps in two ways. Not only do they make lots of little profits from each obscure sale, but people are more likely to go to their site because people know that you can buy da
Re:Bullshit (Score:4, Insightful)
No, that's backwards. (Score:3, Insightful)
They'd have fewer sales, of course. But the fewer sales would be a tiny portion of the sales of their most popular items.
But a company that ignores the most popular items will have a very difficult time making a profit. That's the "tail" portion. Which was claimed to ... eventually ... be MORE profitable than the most popular items.
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I call bullshit on this. You mean to tell me that Amazon.com and iTunes Store would be more successful if they only carried the most popular 1% of their stock? How about *ANY* bookstore, not even just the online ones.
From a quick read, that's not what I get out of it; and I think that the impact would be different for say Amazon than iTunes due to the marginal costs. For Amazon, Netflix, et.al. there is a cost to maintaining, buying, and storing a large catalog of
obscure titles; iTunes and other all electronic distributions have minimal costs for carrying the n+1 title, so that even 1 sale could cover them plus the ability to say we have thousands of songs / movies for download is good for attracting customers.
For Amaz
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One thing I am curoius how or if they tracked...
Yes 90% of the customers buy 10% of the goods, but what is the breakdown for each customer? Personally MOST of the time I buy in that 10%, but I also go to amazon for that other 90% (even if it only makes up 10% of my buying)... if amazon can't deliver that they then not only loose that 10% of my buying but the other 90% because I will just move to a store that handles my full needs better.
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One thing I am curoius how or if they tracked...
Yes 90% of the customers buy 10% of the goods, but what is the breakdown for each customer? Personally MOST of the time I buy in that 10%, but I also go to amazon for that other 90% (even if it only makes up 10% of my buying)... if amazon can't deliver that they then not only loose that 10% of my buying but the other 90% because I will just move to a store that handles my full needs better.
I guess the question is - will any store chose to handle the full range? You might find a specialty store that deals in the 10%, but can they compete with Amazon for the other 90%? Buy.com comes to mind as one that might do that, any else?
It's the Wal-Mart model - we carry what sells; and are tough to compete with on price, if you want you can sell the other stuff since its sales are too small to be worth it to us.
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Brick and Mortar stores? No. Other online stores quite possibly.
I can recall years ago I did the bulk of my bookshopping through Abe Books. They handled the obscure stuff really well (back when amazon didn't) but didn't have all that great of a 'top 10' support. As amazon moved into the obscure space I shifted there since they supported both cases well.
There are still books that I can only get on AbeBooks or other such obscure sites (scientific journals and adult material both fall into this catagory)..
Re:Bullshit (Score:4, Informative)
A specialty store would focus on a wider selection of a particular type of good. So the cheese shop might have 50 varieties, and the plumbing supply place will have 50,000 plumbing parts in stock. The margins here are high, because the customer needs a particular type of a hard-to-get item.
Amazon and iTunes have a business model that scales out enough that they can pay the bills by selling high-volume, low-margin items while making a profit on low-volume high. When you build a giant, automated warehouse in the middle of nowhere, the marginal cost of storing one more book is very low.
Killing the slow-moving stock would kill Amazon, because that's where they make money!
On the other hand, carrying high-volume, low-margin items in a speciality retailer can kill the business. If a high-end steakhouse started selling $3 roast beef sandwiches, their customers would either leave, get crowded out by people buying sandwiches or stop buying $50 steaks.
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If you were actually selling both those items in your store, you would be catering to the fetish market. If you were selling them on the web, they'd probably be in your top 10%, not the bottom 90% like your joke suggests.
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Hmm, might I suggest you investigate your competition? - Perhaps a trip to Black Rose in the DC market or perhaps the summer or winter Fetish Flea in the Boston area may give you some marketing ideas. - $400-600 per belt for the simple ones in stainless steel & a good buggy whip goes for $40+. And canes, expand into canes, always a good market there for replacements.
Hmmm (Score:5, Funny)
...it seems that most of the debate centers around how you define "head" and "tail".
Bill? Bill Clinton? Is that you?
If I understand correctly.... (Score:2)
Seems reasonable to me. I get all my CDs either from CDBaby or artists own sites, or from Amazon. It's been at least a decade since I set foot in a "record store" with bongs under the counter and some pompous indie snob behind it
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It sounds like the Internet and other technologies that support globalization and scale favor the mega-retailers
Actually, it's government granted monopoly rights and marketing budgets that favour scale and mega-retailers. Channel control, payola and marketing costs get amortized over many more sales, making it very easy to crowd out most middle folks. Had it actually been a competetive field, people would have tended to buy the $1 Walmart print of the top ten songs, rather than the labels print, thus limiti
I don't know about this. (Score:5, Interesting)
Correct me if I am wrong, but the basic gist I got was that the 'long tail' theory states there is a lot of money to be made in 'niche' or 'subculture' elements, and the critics say this is wrong. I can wholeheartedly disagree. It's not easy to extract the profit from niche markets, and the long tail probably doesn't add up to the 'head' so to speak, in most cases, but there is certainly a lot of money to be made.
Take TV for instance. Your 'Heads' there may be ABC, CBS, NBC, and you could call things like The Discovery Channel, The History Channel, Comedy Central, Sci-Fi Network, etc the 'tail', as I understand it. And there is quite the potential for the 'tails', in this instance, to make even more than the 'heads'.
This is just as far as I understand it, mind you.
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conventional stores want to stock the few products on the far left, because then tey dont have to keep very much money tied up in a lot of stock to satisfy the needs of the customers on the far right of the curve, who d
Re:I don't know about this. (Score:4, Insightful)
It's not the shape, the shape is fixed...
It's a standard power curve... it agrees that the hits make up lots of the sales, the thing is how many.
Integrate from 1 - 10 off the curve, you see the sales of the Top 10 sellers... they sell a lot, they sit in the front of book stores. Go to 1-100, and you have probably only doubled sales.
Long tail observes that theoretically, the curve goes out to infinity and never hits zero, which is what the Internet makes interesting.
A mall book store can stock 5000 books, a big box book store 20000, and Wal-mart's book section, 1000. Wal-mart moves a lot of books because they stock the 1000 most popular books and move them readily. The mall book store have 5x the inventory and probably about the same in sales, because they aren't moving as many of the top 1000 because of Wal-mart. The Big box store, with 15000 moves more... maybe double the mall bookstore with 4x the inventory?
You see diminishing returns... so sales people observe the 80/20 rule, 80% of your sales come from 20% of your customers/products, etc., it's the power curve... But long tail observes that if you can only carry 100 products, 80% will come from your top 20%, but if you carried infinite inventory, the long tail exceeds the bulbous head because it's infinite.
The average bookstore apparently stocks around 15k books (when I first read the long tail argument), the most profitable books. If you looked at Amazon's sales, their "big sellers" were the sale 15k books as everyone else, so you would think 80/20 rule, that's 80% of revenue, the other 1M+ books were just there because they were slightly profitable, brought customers in, etc. Turns out, the majority of the sales were from the books AFTER rank 15K, the books that booksellers don't carry.
This brings one to two conclusions:
1. 80/20 rule is a function of limited inventory, if you take the tail to its conclusion, the tipping point is around where others drop off, with half before and half after, so the bulbous head is 80% of 50% of sales, or 40%... still important, but not the final say in revenue... Long tail means Internet changes the economics of inventory... I go to a Wal-mart OR Website for my "common" stuff, Internet for everything else.
2. Amazon.com does well on the long tail because the others can't play there. The normal shops compete for the first 15k, Amazon has a competitive advantage for the rest of the inventory, and therefore makes profits. -- This leads to the natural conclusion that the long tong tail is a natural monopoly, only one player can make money stocking it. Wal-mart owns the common 20% of items, Amazon sells the rest, and we all get out of retail because Retail = Wal-mart + Amazon.com.
Alex
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Absolutely not. The general shape is fixed, however the specifics are not. Per Eric Flint, sales of his old books spike whenever a new book of his is printed. Thus the curve would have additional peaks rather than a single head w/ subsequent fall off.
The real point of issue is - is there sufficient value in the tail to warrant a niche market. The answer is 'obviously' - so long as you define the 'tail' as far enough towards the head.
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Absolutely not. The general shape is fixed, however the specifics are not. Per Eric Flint, sales of his old books spike whenever a new book of his is printed. Thus the curve would have additional peaks rather than a single head w/ subsequent fall off.
What he said. The general properties will be that the curve is large on the left, and small on the right. You cannot even say if the curve is going to be concave up or down. beyond that, it will depend on the mar
Re:I don't know about this. (Score:5, Interesting)
I haven't read the book, but your explanation is how I understand the theory.
In the case of Amazon, I think your second conclusion, that Amazon does well on the long tail because they're the only ones there, is what is actually happening.
I buy a lot of esoteric testing, stats, and linguistics texts. That, in fact, is all I buy, and I buy a lot of them. And Amazon is the only place that carries them.
Same thing goes for CDs. If I want, say, the new NIN (ignoring for the time being that the last couple NIN releases I've actually gotten from his website), I go down to Tower Records (still alive here in Japan). If I want Freezepop, I need to go to Amazon.
Actually, in both of these cases, as long as I'm going to Amazon for the relatively unpopular thing, I might as well pick up the popular thing there while I'm at it.
I guess what I'm saying is that I don't think the long tail is necessarily a model for everyone, because if everyone did it, they'd see no returns. But for any particular market, a single long-tail retailer can make a bundle. Everyone jumps in and everyone loses money. It's a function of how big you are, not what you carry. Amazon basically has no competition on the "long tail" products, so they get 100% of that business. They have the luxury of doing that because they are frickin' huge.
So, all told, it just doesn't seem to me that the long tail is something just anyone can use, which is pretty much exactly what the study found.
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It depends what you mean by niche. Really the theory says that everyone has niche tastes but may not be aware of their niche. So offering them a variety of less well known products similar enough to the ones they like....
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Networks are the Head, the second tier networks are the normal tail that we look at... Youtube is the long tail.
The networks have steadily slid from 80% - 40% of television viewing AS the number of cable channels expanded, so the tail got longer.
Youtube introduced a long tail to television.
The question will be, who gets more viewers (total person-minutes watched)
1. The Networks (Head)
2. Second Tier Cable (Tail)
3. Cable in General (Head + Tail)
4. Youtube + Other Web Video
Long Tail theory indicates that 3
Makes sense (Score:5, Funny)
I know I "derive more enjoyment" from my definitions of "head" and "tail".
No kidding. (Score:5, Funny)
When you see anything being hyped on the cover of "Wired" magazine as the 'next big thing,' chances are it's a complete load of crap.
Pope's corallary to Sturgeon's Law. :)
OK, no protection for the tail then... (Score:2)
OK, so how about no copyright or patent protection for stuff in the tail then, since there is no money to be made there right. Well, you can have a copyright there is you use a Free Copyleft license.
Any howls about all the money that would be lost yet?
How about the RIAA and MPAA cannot bring suits based on sharing from the tail?
Any howls yet?
all the best,
drew
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Read what I wrote again...
If there really is no money to be made in the tail then copyright serves no purpose there.
So, is there money to be made there or not? (I am not taking a position on that in this post.)
all the best,
drew
The long tail most definitely exists in one area. (Score:4, Interesting)
Porn. People do pay much higher sums for rather obscure or taboo things.
The problem with the "long tail" is that companies assumed it scaled. By definition it will only apply to a fringe. There is only space in such fringe areas for one or two dominant players; these players may make gobs of cash, but only in relation to their market size.
Of course large vendors aren't going to find it profitable to appeal to multiple fringe markets. The level of effort involved to support each individual small market is high and then combined with a number of markets means you end up burning through more manpower per dollar than a smaller dedicated company. It's the same problem of having too many products/SKUs/whatever, see DEC/Apple pre Jobs for an example of failing this way.
Re:The long tail most definitely exists in one are (Score:2)
Re:The long tail most definitely exists in one are (Score:3, Funny)
Are we talking porn, or prostitutes? I just can't see paying much, let alone much more for porn. It is mostly not to my tastes, but usually "good enough" to get the job done. Kinda like politicians, except the porn actually helps to get the job done, unlike politicians.
I'm just SO glad this ain't a German site (Score:2)
Mostly because the German word for "tail" is also used for the male anatomy.
no. (Score:2)
As anyone who has ever tried to promote something on the web knows, it's an uphill struggle. There's a massive inertia curve -- especially if you have a niche subject. If you can't go to a high traffic site and find potential customers, or use the synergy of a similar site, then you're going to have to spend a massive amount of money promoting your site using old World media -- newspaper ads, flyers, word of mouth etc.
Adsense
Copyright stuff (Score:2)
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Why do you say "mad" instead of "down-to-earth"?
Stephan
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It's not just a statement; it is an agreement .. so its a hurdle. Imagine hurdles like that on every website..
On the other hand, why do you think it is an improvement?
Stephan
I call BS as well (Score:5, Insightful)
For a brick and mortar store, concentrating on the sure hits makes a lot of sense. Funny story, my dad had to pick up a new alternator for a 30-year old truck. The local parts store had one in stock. The parts man looks the box over and says "Yep, had this one on the shelf for about 18 years." That's a bit longer on turnover than most businesses would shoot for. But when you're talking about cheap warehouses in the bad part of town doing all of their selling and shipping online... this whole argument could probably be solved with access to Netflix's database and a few queries. My hypothesis:
1. A huge percentage (35%?) of their business will be new releases.
2. The next biggest percentage would fall into the "perennial classics" category, i.e. the kind of movies that aren't new releases that a Blockbuster would have, movies that do a steady, dependable business.
3. Everything else would fall into the "obscure shit" category, the stuff that Blockbuster does not carry because it's too infrequently rented.
I will wager that the revenue from #3 more than pays for itself AND serves as a draw for customers who rent across all three categories. Joe Customer chose Netflix because they carry obscure Asian chop-chop flicks but will also rent Cloverfield from them since hey, he has an account.
As another example, say I want to pick up some obscure, out of print book. I hit Amazon first out of force of habit. Good news, they have it. That makes it all the more likely for me to type in Amazon when I want to buy the next top-seller I saw on the Daily Show. If Amazon didn't have the obscure books I want, I might go to some other site by default, and then they'll be getting all of my New York Times Bestseller business.
If we're talking about a brick and mortar store, the carrying cost of the truly obscure could well be too high to justify itself. With online stores, there's no excuse not to carry the obscure.
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If we're talking about a brick and mortar store, the carrying cost of the truly obscure could well be too high to justify itself. With online stores, there's no excuse not to carry the obscure.
Except that it still costs Amazon to buy and store the obscure title.
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They don't have a huge stock of new releases with an in-stock guarantee like blockbuster but they have a BIG selection overall (much more efficient shelf space usage than a blockbuster for sure). They maintain old films, do TV seasons, have a lot of foreign/anime, and I think they even have a "back room" if you know what I mean. They don't have the adve
define profit (Score:2)
Is "the long tail" just the "anti-blockbusters" (Score:5, Insightful)
In the "blockbuster" model you don't concentrate on "the top 10000" or even "the top 1000", you push very very few products... a dozen at most (the example they use of book publishing... they only pushed *two* blockbuster titles at a time).
The article is turning that over, and interpreting "the long tail" as being only the "anti blockbusters", the products selling a few copies a year. But once you have the product in your digital inventory you're paying virtually nothing to keep it alive, so instead of trying to figure out what the top forty next month is going to be so you can stock your stores with it, and shoveling albums out into the cold after six months on the shelves, you *can* keep it all available.
It's not a matter of "this end vs that end", it's "you don't need to worry about the ends".
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Well, the thing is, a consumer doesn't have a need for everything. Take for example music: There is a definite long-tail model here. However, there is a limit to how much music you can listen to in a given time period. So the length of the tail is directly proportional to the number of consumers. Then you have to realize that people still tend to form groups, even if it's 5 people, or 50 or whatever. So the long tail pictured in all the literature is a smoothed out version of what's actually there. Th
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Then you have to realize that people still tend to form groups, even if it's 5 people, or 50 or whatever. So the long tail pictured in all the literature is a smoothed out version of what's actually there. There's the exponential decay but if you zoom into that line, you'll have a series of peaks and valleys where groups form. If you sell to those groups, you can make money.
If you want to find the groups, last.fm is doing the research for you for free!
If you sell to those groups, you can make money. The spa
WTF, is this "Promote Chris Anderson Week" on /.? (Score:5, Informative)
Long Tail advocate Chris Anderson defends his theory...
You mean, this Chris Anderson [slashdot.org]? The "science is now useless because we have teh cloudz" guy? Yeah, after that gem of scientific insight, lemme rush right over and see what he's prattling on about in the world of finance...
Re:WTF, is this "Promote Chris Anderson Week" on / (Score:2)
Chris Anderson is an idiot, but he only popularized long tail theory, not developed it. Shouldn't hold a twit supporter against a good idea.
Re: (Score:2)
Well, I really just wanted to make fun of /. summaries that cast this guy as "somebody worth listening to" in two fields of knowledge in the same week, but yeah, I'll try not to hold his support against the idea.
I'll probably still hold the Harvard researchers' criticisms against the idea, though. ;)
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Yeah, poor summary there. ^_^
Eh, the thing with Harvard researchers though is they can be very narrow viewed in their targets. They often focus a lot on big players and methods that work well for big companies so the research tends to be slanted that way. While they have some really useful things to say they have to be taken with a grain of salt if you are aiming for small under-served markets or not planning to get huge.
A typical concept, which actually relates here, would be saying that nitches are not
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A simplier way to put my point... their pieces tends to make sense on a macro scale,... but apply poorly to little 'mom and pop' companies.
Success of the tail is dependent on the product (Score:5, Insightful)
The success of the long tail theory completely depends on the transient nature or durability of the product mix.
Amazon makes the long tail work because Amazon is still a big fat book store (and sells other things): books have a shelf life measured in years. Books do not decay, they do not fall out of fashion, they do not get replaced by next year's model (mostly). As such, Amazon can build up a long tail of obscure books and build a brand of a bookstore where you can find anything.
Zappos is trying this with shoes. The problem here is that Shoes fall out of fashion, so I am not sure that works. I used to work for a company that sold outdoor gear-- it kinda worked as some things were durable, but even then most equipment (and especially apparel) have a shelf-life of one season (one year).
Music may work-- someone's always searching for some Captain Beefheart or TSOL-- but certainly the biggest profit (because production costs are so low for massed produced copies) are in the big-hit ranges.
It all depends on the seasonal and long-term durability of the product.
Re: (Score:3, Insightful)
I think that you're partly right about the durability of goods, but there's so much more to Amazon's ability to extend the long-tail.
For one, there's the issue of quantity. If Amazon wants to guarantee stock on a really obscure book, it needs to have 1 or two copies of that book in one warehouse. If a brick-and-mortar wants to guarantee stock of the same book, then need 1-2 copies in every/most stores. For large brick-and-mortar stores, that could be thousands or even 10s-of-thousands of copies of that b
consumers? (Score:2)
If your enjoyment is constituted by conformity, the culture of mass-production works a treat, don't it? Lost in the the econometry is the adaptability of human desire.
Cause, meet effect (Score:2)
"Research suggests that consumers also derive more enjoyment from the hits..."
Really? More people like popular things than unpopular things? Or, in other words, more people like things which more people like?
Wonders never cease.
Not really conclusive (Score:3, Interesting)
As Anderson notes, the defintion of "head" and "tail" are important; Anderson was initially basing his information off of the result of switching away from retail space. If less than 1% of the items of a market can make it into the inventory of a Wal-Mart, then even if the top 1% is 32% of sales, the Long Tail is pretty powerful.
Around the "research suggests that consumers also derive more enjoyment from the hits, rather than the tail." From the article -
Popularity and quality are not completely divorced from one another; I'd expect the more popular titles to better, just not nearly to the same extent as their sales would indicate.
I'd be interested in "in-genre vs out-of-genre" ratings for the heavy users as well; while the article indicates that heavy users rate popular titles disproportionately highly, this may be a result of the heavy users (who consume a lot of obscure stuff) working primarily within their genre as opposed to across genres. If you like action movies more than romantic comedies, you're more likely to give the action movie the higher rating if you both of them and they're of equal quality. I think it's likely (though not certain) that heavier consumers stick more to their genre/tastes even among the popular items, which would result in them having a disproportionately high rating for popular stuff compared to lighter consumers. (The article does note the disparity is true for products as a whole - heavier/obscure consumers are more likely to stick to a single genre - but doesn't run the comparison among the popular subset of their tastes).
As for the business suggestions, some of them seem ok, but others -
There's a difference between knowing something isn't actually any good and the amount you'd pay for it, especially for obscure products. Consumer ratings are not directly analogous to the price premium someone would willingly pay for something, and not simply in the people buying things because they suck market; things like completionism and other impulses that aren't connected to a work's quality will lead to obscure works being worth high price premiums regardless of quality.
While you shouldn't radically alter things, this is ignoring the issue of what the "head" is in the first place. If the "head" of an online store is bigger than the entirely inventory of a typical Wal-Mart, there's going to be a shift in marketing tactics.
But what about the inverse? (Score:2)
Much of TFA focuses on things like "20% of your catalog generates 80% of your revenue, so the 20% is more profitable and should be focused on.
But that kinda sidestepps the point. If I went to my boss and said 'Hey, I have a method where we can get 10-30% more revenue with no significant additional infrastructure outside content space' you better believe they would jump on the idea.
Conversly if I said 'hey, I can cut a small percent of our operating costs by reducing our content selection but it will cost u
Not oblig (Score:2)
Chris Anderson: You can't scare me with this Gestapo crap. I know my rights. I want my phone call.
Anita Elberse: Tell me, Mr. Anderson... what good is a phone call... if you're unable to speak?
Musicians and writers don't get rich (Score:3, Interesting)
The article is basically attacking a misconception about the Long Tail. It's a misconception that goes all the way back to Chris Anderson's book.
It is possible to get rich from the Long Tail. Amazon does it. ITunes Music Store does it.
What's lacking in the book is pointing out that the *content creators* don't get rich. The Net means you can now eke out a tiny amount of cash by delivering your content to people. And in aggregate, that's a lot of money. But for each individual artist, it's not much.
It doesn't mean the end of blockbusters, because people LIKE blockbusters. It means that you have more alternatives, so you can see something else, but in general, you won't. Most people like what most people like. Duh. The additional cash that goes to the "long tail" artists does make them a bit less profitable, but there's still plenty of profit in them.
So the Long Tail doesn't mean that your rock band is going to be as rich as Van Halen. It means that you can make a few hundred bucks, but it's not going to make you a living, much less a superstar.
Anderson completely missed this fact. He was all rah-rah about what it meant for consumers (who have more options) and big retailers (who make big money on small margins) but paid zero attention to the artists, who get tiny wins but not big wins.
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It's not just artists, it applies to everything. Most things follow a fad trend - even industrial equipment to some degree - there is a period where something is new and shiny & everyone wants one, then it's commonplace & everyone has one, after a while peop
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Good breakdown.
Though with long tail it looks like 'the rich get richer and the nitch go from zero to something', so while the artists don't make out like bandits it is still better for them then the pure blockbuster model.
Theory (Score:2)
Not Bullshit Actually. (Score:2)
Having now gone through the entire piece, I'm changing my take from skeptical to balanced. The research does not actually go against "Long Tail" theory at all (despite the researching saying it does, which is really confusing).
The end argument of the research basicly says that heavy customers do in fact dip into tail markets and having a good obscure selection can be really good for business but it is important to keep a good eye on cost/return on such content. Much of this is actually in the advertising/
flawed methodology (Score:2)
No one said it was a gold mine... (Score:2)
...except maybe the stock hypists.
My understanding was that the whole concept only became possible with IT and what it can do with both content delivery and supply chain management. Hence it is an interesting case study, not a fun business.
3 search hits on a *good* day on something that could take a year to sell is in no way a big cash cow, and you have to be a Walmart or Amazon to pull off the enormous operations side of it, because the tail must be massive to even work. And even then, the margins are slim
I never got the idea the long tail was a new idea (Score:2)
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I would suggest that the nature of the "long tail" itself makes any accurate (ie. statistics-based) research on this extremely difficult, if not impossible
Not to mention that the remenants of channel control tend to skew the data; marketing, availability, payola, etc, skews the data towards the head. Heck, much of what I listen to isn't even available on Rhapsody.
Researching on, for example, last.fm data would be more interesting, as their range tends to be far wider and the preferences less (but still) aff
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' Says the stupid college kid with no mortgage.