Chris Anderson's "The Long Tail" concept and applications

¶ … Tail

The theme and idea that Chris Anderson puts forward has made a huge impact on people involved with technology, with content, and with marketers. The thesis Anderson works with is that because of the digital revolution, which brought with it the ability of companies to sell products online (and avoid the costs of brick and mortar facilities), retailers like Amazon and Netflix have made enormous amounts of profits from selling items that are not necessarily popular mainstream items.

The country is past the age of big blockbuster movie and song hits, and niches are taking the place of the record stores, for example, that in the past would carry popular music. Today, a dizzying variety of music can be ordered online from Amazon or other digital retailers. As Anderson says in his "The Long Tail, in a nutshell," traditional retail stores go for stocking just those items on shelves that are sure to sell; and shelf space is finite, so judgments have to be made as to what to stock on those shelves.

But retailers like Amazon and iTunes can stock "virtually everything, and the number of available niche products outnumber the hits by several orders of magnitude" (Anderson). That multitude of offerings makes it possible for people in Alaska or Alabama to go online and order an obscure CD or book that no department store or bookstore would ever be able to carry, because inventory in brick and mortar stores is always limited by shelf space.

The economics of abundance -- when there are infinite choices it makes consumers happy and the cash register rings night and day for the online retailers because the potential consumer audience is multiple millions of people -- fits right into Anderson's philosophy. The public is known for having what Anderson calls "narrow interests" -- a grandpa in Florida may want a book on WWII that no bookstore would ever carry while a teenager in Hawaii might be looking for a Star Wars banner from the original launch of the Star Wars series -- and this is just part of how the American culture is "shifting from mass markets to millions of niches" (Anderson).

In the music business, which thrives online (iTunes is an extraordinarily busy and flourishing business), the market for songs that aren't hits or even on the "top 40" is as big or bigger than the hit market is. The long tail in this story is like a long snake because the tail is very long (rare and out-of-the-ordinary items) and the head is very small. On top of the long tail, the cost of distribution in the online genre is well below the cost of running a brick and mortar business, and moreover, companies like eBay, KitchenAid, Legos, Salesforce.com, and Google have used Anderson's concept (or developed it before Anderson had his brainstorm) all have long tails.

Among Anderson's rules -- which dovetail with Information Systems (IS) -- he includes lowering costs to enhance profits; thinking niche (there can be no "one-size-fits-all" in his world); giving up the urge to control a market; and offering consumers a long-tail's worth of worthy choices. As to the economics of abundance, there shouldn't be bottlenecks that block the free flowing path between supply and demand. "Everything becomes available to everyone," Anderson writes, and he knows he is not the first one to expose this concept but he clearly is a trailblazer in his field.