-
Great explanation for why certain businesses are succeeding
“ In "The long tail," Chris Anderson provides a unique explanation for the strong economic behavior of ecommerce retailers. The author begins by reviewing mathematical curves that characterize the relationship between two variables: number of times an item has been purchased (on y axis) vs. items available for sale (rank ordered according to "popularity of item" on the x axis). In traditional retailers (bricks and mortar), the curve follows a power law (e.g. y = 1/x)...but x is limited by the physical size of the store...
An amazon user wrote this on 2009-11-05.
In contrast, the sales curves for modern ecommerce businesses (e.g. amazon, rhapsody, itunes) take on a different shape: x is much larger--nearly infinite--and as the sales curve flattens out to the right, it drops down much more slowly than one sees for brick and mortar businesses (the tail of the curve is flat or "long." This effectively means that there is "surprising" demand for "niche" products that you would never see in brick and mortar stores (which cannot afford to stock the same number of goods). Amazon, itunes, etc. are effectively able to match demand for niche products with supply of niche products using powerful search tools and (in the case of amazon) third party vendors managing inventory.
Interestingly, Matthews points out that Sears was a pioneer in taking advantage of the long tail model of business economics. Certain businesses (ebay, amazon, itunes) have taken the long tail phenomenon to a new level by using the internet to lower their fixed and marginal costs...and by creating tools that effectively match buyers and sellers for their millions of niche products available for sale. After reading this book, the most interesting question that comes to mind is whether or not the amazon kindle will create the same economic wonders that itunes provided to apple via the power of the "long tail." The next 5 years will tell us...
” -
The Long Tail
“I am a graduate student in mass communication and though I was required to read this book for class, I have to say it is one of the better books I've read in a very long time. I would recommend it to any business owner, journalist and even to other college students trying to determine a career path. It is well-written, easy-to-understand and 100% relevant even though a couple years have gone by since it's release. If anything it is a little wordy, still great though.”
An amazon user wrote this on 2009-10-25. -
Repetition over and over again
“The facts presented by the author are perfectly valid ... but then he takes them, re-chews them over and over and presents them from 15 different perspectives. Come on, I've got the idea after the first 20 pages, I could use 30 more, but the rest is filler.
An amazon user wrote this on 2009-07-15.
There are two likely explanations: either the author is so engrossed in his theory that he likes to re-explain it from miriad different angles ... or he doesn't believe in the digital long tail (where his 50-pages PDF would land) and decided to produce a traditional book.” -
Interesting and informative
“Dubbed by editor-in-chief of Wired Magazine , the Long Tail is
An amazon user wrote this on 2009-06-30.
"The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare."
Anderson discusses how, in today's society, how and why traditional "brick and mortar" outlets are losing ground to online retail. On the surface, the Long Tail is about how it is easier to buy hard-to-find items on the internet. But Anderson digs deep to analyze why. He uses Amazon, Netflix, and Rhapsody as examples.
With physical stores, there is limited shelf space. So Wal-Mart and Best Buy can only stock CDs that their customers will buy. Looking online, however, Anderson has discovered that all CDs sell. It is not worth it for Wal-Mart to carry an obscure CD because the chances are high that it will merely sit on the shelf collecting dust. From the "brick and mortar" aspect, it is vying for shelf space with commercial artists, like Britney Spears and the Cheetah Girls.
On the other hand, 20% of Amazon's sales are from books which sell 10 or less copies. There is a market out there, its just so small that the economies dictate that physical stores not carry them. Even more astounding is the fact that with online music services such as iTunes and Rhapsody, where there is no "physical" song and its all just bytes or whatnot, there are no carrying costs, so the gamut runs wider and longer on what's offered. This is why companies that offer more will be successful, even if each product only sells a few units.
I enjoyed Anderson's writing style. He fairly presented both sides, and in addition, interviewed many companies to get different interpretations and perspectives. It is intelligent, without snobbery or pretense, which I applaud, and therefore highly recommend this book.
” -
Interesting, but of limited use
“Most people have heard various flavors of the 80-20 rule (20% of goods sold result in 80% of profits, 20% of the time of a project delivers 80% of the results, etc.). The 80-20 rule is usually invoked to suggesting focusing more on the little that results in a lot. This book, in essence, says the idea of applying that rule to products is coming to an end.
An amazon user wrote this on 2009-06-16.
First, the curves (technically called power-law distributions) are getting flatter. Expressed another way, the heads are getting smaller and the tails are getting longer, hence the name of this book. This is really the crux of the book, and it points toward cheaper means of production (of items from music to video to books, etc.), cheaper distribution (via the internet), and better ability for consumers to find new items (via Google and recommendations from proprietary sites or blogs) as all contributing to this phenomena.
Second, while the number of sales *per unit* is smaller in the tail, by having greater and greater varieties of items in the tail, one can still aggregate to very large numbers. For example, while the top 10 selling books in 2004 sold about 17 million units (combined), the million worst selling books sold about 15 million units. Closer to the center, about 220 books combined would sell that number.
Third, as more and more items go in the digital direction (where the concept of inventory doesn't apply - such as with digital music providers like iTunes), the cost to carry a virtually unlimited selection of products is nearly zero. Therefore it pays to carry everything- even a few sales should still add to profits.
Putting all this together paints an interesting picture of the future of retail, but is not very practical. In the book, the author mentions that it started with an article in Wired magazine. For those less interested, perhaps it should end there. Towards the end is some advice, but all of it is geared toward the aggregators/retailers, not the producers.
”
