Notes on The Long Tale

The Long Tail by Chris Anderson is a book about what happens in a market where the cost of production and distribution becomes negligible. The long tail refers to a statistical distribution where the distribution curve never drops to zero.

Short-Tailed Markets

In a market where the costs of inventory are high, such as in a standard book store, the store can only hold a limited amount of products in stock. The store will naturally want to keep the best selling books in stock to maximize their profit. This is often referred to as the 80/20 rule. 80 percent of the sales come from 20 percent of the products.

The 80/20 rule and the inventory limitations changes the buying patterns of the customers since they will buy what is available instead of going to great lengths to get something that is hard to get or even completely unknown to them, thus re-enforcing the rule.

Long-Tailed Markets

The reduced costs of product inventory and distribution due to the Internet and Just-In-Time techniques is changing the rules. Amazon is reporting that sales from books that would not normally be kept in stock in a normal book store provides one third of the total market share. And the share is growing rapidly.

There are three things that enable the long-tailed markets: production tools that enable cheaper small scale production, cheap and simple distribution tools, and a new connection between producers and consumers.

Production

Cheap, simple production tools, such as Garage Band, iMovie, blogging tools, etc. enable enthusiasts to create acceptable music, movies, podcasts, articles, etc. at virtually no cost. And they do. The production in the tail is not driven by money. In the tail the drive comes from the need to express oneself and to have fun. People who do things for themselves instead of for money often produce better products.

Distribution

The digital media can be distributed via any of thousands of channels, YouTube, Vimeo, iTunes Store, Pirate Bay and DC++. Music and video are easily downloaded to iPods and other portable players. Books are available as audio books or available as PDFs to read on-screen or to print at home. Bloggers are writing millions of articles everyday, available to anyone, for free!

The Connection between Producers and Consumers

Google is The Start Page for the Internet and it enables the connection between producers and consumers. It also enables the consumer-to-consumer connection. The trust in advertising is steadily decreasing while the trust in individuals continue to rise. Google enables me to find like-minded people that are happy to give recommendations to anyone who is interested in what they do or are interested in. We are the critics in the Internet age.

There is so much information available that the need to filter is higher than ever. Google provides this filter with the assistance of numerous blogs and other social tools. The filter has moved from pre-production to post-production making it possible for us to choose what fits our needs instead of the needs of publishers that are ultimately driven by money and professional critics with different taste than ours.

But, the professional critics have not disappeared, they have just become less important. And in the abundance of information that the Internet provides it can still be a good choice to rely on external agents instead of trying to make all the choices ourselves (see The Paradox of Choice).