Review of The Long Tail

In “The Long Tail, Why the Future of Business is Selling Less of More” which first appeared in Wired magazine in October of 2004 and then was published in 2006 by Hyperion Books, the editor-in-chief of Wired Magazine and author of the book, Chris Anderson, asserts that when you can dramatically reduce the costs of connecting supply and demand, it changes not just the numbers, but the entire nature of the market. In this book, Anderson examines what happens in the market when people have an unlimited set of choices. He does not ring the death knell for the blockbuster or the superstar but he does declare an end to their supremacy.

On his long tail Web site (http://www.thelongtail.com/), Anderson summarizes his thesis as follows:

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.

“The Long Tail” is an economics book intended for readers who are interested in doing business in the new digital era, particularly on the internet. The book seeks to answer three principal questions.

1.       What’s the size of the Long Tail (defined as inventory typically not available offline)?

2.       How does the availability of so many niche products change the shape of demand? Does it shift it away from hits?

3.       What tools and techniques drive that shift, and which are most effective?

The Pareto Principle, also known as the 80-20 rule, takes center stage in Anderson’s book. The Pareto principle holds that 80% of the effects come from 20% of the causes. As a purely hypothetical example, it might be that 20% of the books written in 2008, will account for 80% of the sales. While there is some dispute about whether this principle manifests itself as 80-20 or there is some other more accurate breakdown, as a general notion, it serves the purpose. As a result of this principle, businesses frequently focus their efforts upon that golden and productive 20%. Anderson sets his focus upon the remainder, the other 80% or the long tail.

Anderson uses anecdotes and data analysis to support his thesis. His analysis is compelling and sound; however, I would have liked more diversity in his examples. He relies heavily upon the music industry and I would have liked to have seen more examples in other business sectors. This is not to say that he did not use other business sectors for examples, it was just more heavily weighted on music than I liked. I’ll chalk that up to a matter of taste.

If all things continue on the present trajectory, the future of the micro-trend and the niche product look bright. The long tail thrives in an environment of freedom. There are questions, however, that are left unasked in this book. What impact can law and regulation have upon the long tail? Is it possible for a dominant company or technology to corner the power of the tail for itself? Much of the creativity and productivity that drives the power of the tail is due to the current openness of the internet. Anderson acknowledges that much of what transpires in the commerce of the Web is illegal. What happens if governments, industry, or both, exert their influence to dampen the free flow of bits and bytes? Will the rules of scarcity once again assert themselves into this digital economy? What would the chilling effect be? I believe that Anderson’s book would have been improved if this issue of artificial control had been examined.

“The Long Tail” provides an excellent primer to anyone who wants to orient themselves to the business of the Web. I just spent a week in Houston at the Microsoft World Partner Conference with 15,000 people who do conduct daily business on the Web. I was in many meetings and presentations and I noticed that most speakers no longer bothered to provide context for a discussion of “The Long Tail”. It was generally assumed that everyone had read or at least knew the general tenets of the book. It was referenced often. If for no other reason, I recommend reading “The Long Tail” to anyone who is looking to use the internet as their store front or using the internet as a marketing tool. The ideas contained in this book have become main stream for those who find themselves interested in this niche.