Review – The Long Tail: Atoms and Bits

The Long Tail, the title of the book by Wired magazine’s editor Chris Anderson, is a phrase that has entered the popular business lexicon with nearly as many interpretations as there are people quoting it. The term describes a graph showing very high sales and demand on the left (the head) and the rapid decline of the same on the right (the tail). This decline, while initially radical, flattens out and goes on to the right without ever actually getting to zero. Anderson’s book is about:

  • what is significant about this tail
  • what enables it to be important today with digital distribution, social means of production and effective filters and search capabilities, and
  • what makes this a game-changing opportunity for businesses, consumers and society.

Anderson writes that the Tail is significant because it means nearly unlimited choice for the consumer. The choice, enabled by search and filtering technologies like Google and Amazon reviews and recommendations, along with “broadband delivery”, can mean that anyone can easily have access to items that were previously niche. Reasons for being niche included lack of local availability, no knowledge of their existence, and the inability to customize or create items or services that more closely modeled more specific consumer desires.

The nearly unlimited opportunities for businesses include digital distribution of products or services for free (or nearly free), the ability of works or products (that previously would have kept businesses in a straitjacket) to be discovered by customers on a global scale, and the strength and breadth of social media such as recommendations and reviews to create awareness and “word of mouth”. The democratization of the toolset to create and distribute digital work such as music, video and electronic print has enabled a broader group of people to take part in the marketplace, lengthening and thickening the Tail. Due to the lowering of costs of production and distribution, the overall market is now much larger and Anderson maintains that most of this is in The Tail.

One of Anderson’s premises is the “death of water cooler society”. Previously, with such limited choice in television and movies, the business of The Hit enabled a behavior where people would gather around the water cooler to talk about the previous night’s episode of Dallas or Magnum, P.I. or the blockbuster being shown at the local theater. With unlimited choice, he writes that this disappears. Consumers are more likely to watch a show or movie that more closely matches their individual tastes. While I agree that more choice fattens the Tail considerably, the Head is not irrelevant. While he admits as much, he maintains that it changes the nature of the hit. All I know is that people still ask me, “Haven’t you seen Iron Man yet!?”

Much of the discussion seems to be around atoms and bits; atoms take up space, bits do not. The analysis of The Head was illuminating and shows the durability of that market if only because there has been so much effort put into researching all there is to know about shelf and floor space in retail. Social beings that we are, we have moved a lot of our community to the mall and the experiences available there (there are certain product-based online communities that provide similar virtual experience). It is interesting to note how many of those businesses have companion sites online to assure presence and awareness.

Businesses that can operate on a purely digital basis like music, streaming video and online print media, have the ability to take the fullest advantage of The Tail. Real goods manufacturers and retailers have a more interesting problem, as they can certainly take advantage of the small production, digitally-enabled awareness and e-commerce, but they still need to ship something physical. In B2B scenarios like the one presented last week in the propane industry, I wonder how much opportunity there is in The Tail if there are only a certain set of players in the market.

I need to arrive at how to approach Anderson’s book. Is it an analysis of some significant market and societal trends and where they may take us, or is it more of a manifesto which not only presents a way to go that is good, but portrays older models as bad or as missing the point? Anita Elberse’s article in the Harvard Business Review which takes Anderson to task, and the subsequent exchange between them, leads me to believe that agreement upon semantics is critical; we inhabit a period of transformation of models and markets, and the two pieces together provide a “both/and” interpretation instead of “either/or”.

Semantics revolve around the definitions of Head, Tail, Hit, Niche and the use of certain percentages. For example, Elberse writes that hits cannot be ignored, and Anderson actually agrees. The difference is how to approach the production and distribution of hits and their effect on the market opportunity. We have agreed that this is an unprecedented time of change for the markets and models, and the fact that there is so much study, research and alteration in the enterprise around “the community” and The Tail gives lie to that. Businesses are trying to figure out how to maintain their existence while being transformed into 21st century agile entities. The “both/and” interpretation means taking the challenges confronted by and the fears of mainstream businesses, as hinted at by Elberse’s article, and holding them in the same place as the opportunities, vision and culture change related by Anderson. People love simplicity, but “both/and” thinking can be difficult and uncomfortable.

One thought on “Review – The Long Tail: Atoms and Bits

  1. Pingback: Book Reviews - TLT « Net-Centric Economics

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