14 Nisan 2023 Cuma

Notes from the book "The Long Tail"

Dear Readers,

Today, I am going to share some of my notes from the book called "The Long Tail" which has been written by Chris Anderson. At the first view, thinking about the time of publication the book, I should admit that the author's ideas are beyond his time. If someone has read the book at the day of the first edition, s/he may not understand everything. However, after more than 17 years, since we are living at the world of Long Tail, it is more comprehensible for more people. 

Let's go back to the book and let me share the notes I have taken.

The products can be classified as hits and niches. Hits are the best sellers which can be found in all physical or digital market places. But, the niches are the ones which are mainly targeting a small group of individuals or targeting everyone but not sold in high quantities. 

The pareto law states that the 80% returns are coming from 20% of the products. This might be true for the physical stores (i.e. book stores) since they have limited shelf capacity to store books. Therefore, they will tend to display only the hit books rather than the niches.

However, if you are running digital business and since you don't have a capacity restriction (such as places/shelves in the bookstores) you can put all the content to be sold. Therefore, for the companies running their business under digital, 98% of their products can be sold at least once (i.e. Apple).

To understand the Long Tail, we can look into the sales of Rhapsody in December 2005. Rhapsody was a subscription based streaming service which was offering 1.5 million tracks in the year of the publishment of the book. 

The vertical axis shows the number of downloads where the horizontal axis shows the first n products in ranked order. For example the track ranked as the 5.000th was downloaded approximately 7-8 K times.

If you run a physical store and have a place of 5.000 types of items, you should cut at the 5.000th item and don't allow the rest of the items into the store. However, in the digital world you can accept every item regardless of being digital or physical since you are not restricted with shelves. The Long Tail is the name for the products which are usually cut out by the pysical stores.

In the following figure you can see the product variety difference between the digital stores and their rivals.

The following is a fine representation of what we mean in terms of the physical and digital competition. 

The mass market is turning into a mass of niches and the Long Tail era is supported by the following six forces:

- There are far more niche products than the hits

- The cost of reaching those niches are falling dramatically

- Powerful filters help the consumers to find the right product for their own use

- The demand curve flattens. There are more niches and less hits than before

- Niche products come together to compete against the hits

- The nature of the demand is revealed due to the new behaviours of the customers

There are three features of the Long Tail which are explained in the following table. Long tail democratize the production and gives tools and opportunities for all people to produce. An ordinary person can take a video and broadcast it in Youtube. The result is lenghtening of the tail and it allows new microcelebrities to show up. Plus, it democratize the distribution whereby the marketplaces or digital platforms are listing or broadcasting the products of the people or the businesses. The result is the flattenning of the tail. Finally, it connects suppy and demand with having strong filters that enable the people to track information or find the right product for their use. The result is driving the business from hits to niches.

The third feature is also done by the consumers. Since they recommend the products they use, they influence the others to get the same product or service. Therefore in the book the authors claims that we are not in the information era, we are in the recommendation era. 

The era we live can be called as Pro-Am Era. Pro-Am comes from the cooperation of the Professionals and the Amateurs. Think about a movie. Twenty years ago, only the professionals had the equipment and the knowledge to make a movie. However, now, any person, if s/he has any mobile phone is able to make a movie. 

The Long tail accounts for a big variety products that have quality ranked from awful to great. However, in a physical store, the variety will be bad to good only.   

Most of the companies run their physical business as well as their digital business. The following figure shows the economic cutoff point for the type of the businesses.


Amazon is one of the leading practicers of the hybrid business. They can issue books whenever they get the request from the consumer. It means that they convert bits to atoms.

We all heard that 80% of the revenues of a company usually comes from 20% of the products. These are the products ranked according to their number of sales. This 20% products are also accounting for the 100% of the profits. However, in a Long Tail retailer, the best hit products represent only 2% of the entire inventory where the 8% is the other product collection which can be also found in the physical stores. However, 90% of the products which are available only in the online inventory can not be found in physical stores. Eventually, all three types represent the same amount of profits.    

The consumers might experience a decision fallacy in a digital marketplace due to the abundancy of the products. This may not be as that level in a physical store since there are not a lot of choices for the customers and they can get immediate help from the employees. 

Let's finalize the notes with a saying from a philospher Raymond Williams. 

"There are no masses, there are only ways of seeing people as masses." 

Thank you for reading this content. See you in another article. 


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