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Review: The Long Tail by Chris Anderson
I just finished reading the much-quoted, much-hyped book by Chris Anderson: The Long Tail - Why the Future of Business is Selling Less of More. It is a quick and compelling read at some 220 pages (not counting the notes and index etc) but there is nothing much new in the book if you have read the original Wired article by Chris or follow his blog. The theory can be summarized as this: the Internet is shattering the 80/20 Pareto rule in that the "monopoly" of hits is ending. Typically, at the "head" of the demand curve lie the hits -- what you may find stocked in your local bricks-and-mortar Barnes and Noble or Blockbuster. However, increasingly businesses are finding that the "tail" of the demand curve never really becomes zero and if you add up all the "niche" opportunities created in the tail, their aggregate can be a sizable chunk comparable to the head. Herein lies the success of the business models of online businesses such as Amazon or Netflix. For example, the average bricks-and-mortar Borders carries about 100,000 titles but about 25% of Amazon's book sales come from outside of its top 100,000 titles! This is nothing new and was the whole promise of the internet and the "eCommerce" clicks-and-mortar retailers (admittedly, Amazon being one of the pioneers). However, Anderson argues that it is only now that the web and the internet have reached a point where the web "becomes the unifying element of a revolution in supply-chain economics that had been brewing for years" (I like to dub it 'Revolution in Computing Affairs').
In the chapter titled 'Three Forces of the Long Tail', Anderson outlines a rather simple plan for achieving Long Tail success: Make it, get it out there and help me find it. The Pareto principle has been mentioned earlier but I purport that Long Tail economics can be explained, partly, by another economic theory: Say's law often quoted as "Supply creates its own demand" or in other words "If you build it, they will come". No time here to get into aKenyes vs Say debate and of course supply is not everything, as Anderson points out in the book, connecting that supply with demand through the power of the internet is one of the key elements of Long Tail success. He lists "filters", whether its bloggers or sophisticated recommendation engines, as the key tool that help us find quality in the Long Tail.
We have all experienced the Long Tail whether we know it or not. I recently found an old classic 1967 Pakistani horror flick 'The Living Corpse' on Netflix. I had looked for it in every video shop in Lahore during my last trip to no avail. But on the internet it has developed something of a cult following. Although the Long Tail is most apparent in digital media and online eBusinesses, Anderson provides several examples of the Long Tail in various verticals (offshoring taps the long-tail of labor; Open Source software relies on the long-tail of programming talent, Wikipedia, etc). But I must agree with the BusinessWeek review that some of the analogies (e.g. the Long Tail of flour/beer) are a bit outlandish. Similarly bizarre is Anderson quoting a blog in the book suggesting that "Terrorism and Al-Qaeda" are the Long Tail of warfare! The concepts around 'asymmetric warfare' are as old as the history of war itself and just slapping on the 'Long Tail' label does not mean much.
Nevertheless, I give the book a "must-read" rating (especially if you have not been following the hype) and it is well worth the time and 18 bucks. If nothing, it is fascinating to look at the various sales numbers from different businesses cited in the book in support of the Long Tail theory. It is also a commentary on the evolution of global pop-culture where the non-commercial/non-mainstream products are increasing in popularity with the help of the Web [2.0].
Tags: Long Tail, Book Review, Economics, Web 2.0 , e-Business
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7/23/06 12:17 AM
Yes I too have been reading this book. Alright so Chris Anderson developed The Long Tail Theory in Wired magazine back in 2004 to describe how economic business models of Amazon.com, Netflix, and others have created their riches. His book only recently came out.
The problem with this book is that the focus is purposely too broad to appeal to a wider audience and increase book sales. Even the author of “The Purple Cow“, Seth Godin told me that he wanted to appeal to a broad audience to help increase book sales. Think of how multi-level marketing and being an IBO works. Everyone sees how easy it is and thinks they will be able to make money when in reality the appeal is soo broad that the market becomes over cluttered.
The bottom line: Don’t think of every marketing book out there as a great resource. A great marketer who writes a marketing book is looking to.. of course… market their book to the largest audience to generate the most sales. Just don’t expect every book out there to solve your problems.
(www.CaffeineMarketing.com)