Long tail phenomena is a direct consequence of this effect and on the Web we bookmark a lot but vist a few. It’s a human condition that will exist until humans can have an intelligent dialog with a sentient Web that does all the work.

A case in point is how we find out about new Web services. It takes a lot of work to move this information down the pipe (Techcrunch.com being a good example). a 2D map search engine shows how difficult the problem is without ontologies and shared data.

Services such as Digg and Twitter and to a lesser extent social media sites, act as ticklers to the common conscience of people on the Web.
If you don’t get enough tickles, you don’t participate. Just remember, prior to search engines we relied on phone directories, mail media and word of mouth. The long tail existed then and will continue to exist until the effort to find things intelligently becomes a no-cost ubiquitous commodity for every person.

Sometimes, not knowing makes life easier.

2. Gerry Springer once told me after I asked him whether he pays people to go on his show:”do you really think in a country of 300M people there are not 10M idiots who love my show and 100000 who would pay me to be on it?”.

Long tail offers a conceptual platform for new age independant common folk to make a living from whatever they have to offer.

I have not read Ms. Elberse’s paper so I cannot comment on the validity of her findings or conclusions. What we are all really responding to is TechCrunch.com’s own conclusions drawn from her paper (which I assume and hope that they have read).

That being said, Anita Elberse claim is immediately questionable due to her own admission that “She defines head and tail differently than Anderson”. You cannot disprove an argument or experiment using different definitions of the key terms. It is in this violation of the rules of both rhetoric and scientific method that her argument starts on shaky ground – or at least as her argument reads in TechCrunch.com’s article.

The use of relative terms like “much money” also tends to weaken Ms. Elberse’s presentation of her findings. As an entrepreneur running a business from a home office, “much money” has a very different meaning than it does if I am CEO of an international corporation.

Makes you wonder what a Harvard Business School education is worth nowadays.

Google validates – not challenges – this thesis:

1) Its marginal cost for each additional page indexed or search query delivered must be vanishingly small while its revenues per click should be larger.

2) The perception that Google covers the long tail / everything under the sun makes users far likelier to use Google for mainstream searches. So not only is Google’s marginal cost for covering the long tail small, actually that cost could be allocated not just to the long tail but also to its mainstream business.

3) Google’s coverage of the long tail seems to have grown inversely with the marginal compute and storage costs of doing so. Google no longer displays the size of its index on its homepage but I recall seeing that number move from a billion to 8 billion over the years when it did publicise that information. In other words, it appears plausible that Google only increased long tail coverage as the marginal cost of doing so became affordable relative to expected marginal revenues.

What this seems to mean for other businesses trying to monetise the long tail is that if the marginal cost vs marginal revenue component of the business model does not work & scale, there is no long term future for the business. Not an encouraging thought but sobering nonetheless.

A friend of mine forwarded Lee Gomes’s WSJ article questioning Chris Anderson’s Long Tail theory, referencing a recent Harvard Business Review article by Anita Elberse.

Setting aside Lee’s original Long Tail skepticism, possibly because it sugges…

The long tail can work for an intermediary who aggregates a lot of different items and pays for them on consignment. It doesn’t work so well for the creators of those products who may only sell a few untits, or none at all.

But, even more importantly, the statistics themselves don’t necessarily bear out the conclusion. All they really tell us is a fairly self-evident fact – that, yes, popular music and moves are, in fact popular….

I think the head gets shorter and that’s what really matters now.
I also think that the tail will wag the dog at least in a “countervailing” fashion. The problem with such analyses is that overstretches a small deficiency to make an extreme case.

Pareto’s Principle is that there will ALWAYS be a top that significantly outperforms the rest (and it doesn’t matter the content of the list, check out the Forbes 500 Richest lists). The Long Tail will always exist too. The Internet just allows selections from the Long Tail to move up faster/easier with the right kind of marketing.

The TV show “Friends” used an unknown lead-in song for the show, and the band was put on the map where they sold a lot more songs/CDs that they otherwise would not have. Many times unknown songs put in movies become hits. It’s just that people have a chance to experience the material, not that the material is good/bad on its own.

So go discover the Long Tail.

La gets half the story right when he/she says, “…they’re making 50% of their revenue (rentals) on things outside the top 10%. That’s exactly where the long tail starts… For QF to stop supporting long tail content, not only would they kill half their business, they would likely kill their whole business.”

Exactly. The other thing their LT tells them is how many copies to stock, of which products – what’s sometimes referred to “depth” of items. Quickflix (and Netflix) use the aggregated future rental requests of customers to forecast exactly how many copies of which titles they need to have in stock to meet customer demand for rentals.

Just because Quickflix displays a product for rental, that doesn’t mean it owns a copy of that product. It’s putting it out there to test whether it *can* rent that product, and if so, how many copies it should have in stock to satisfy demand.

DVD titles for home-use rental vary greatly in price according to a number of factors, and an online DVD rental business can greatly influence its profitability by buying the right depth of copies, at the right time, to optimise cost of inventory.

Offering both the head and the tail of the market helps establish exactly where the most *profitable* products are for an online DVD rental business. The reason why Blockbuster’s physical stores are a losing business is they are unable to forecast demand and tweak profitability – they have to stock mostly expensive blockbuster titles and then hope they can merchandise them hard enough to make a profit.

“Conversely, if I was selling a red number 5 button for my polycom soundpoint ip 550 phone, there might only be 10 people in the world who might buy that, if I’m lucky. Prior to the Internet, I might have only sold 1, but with the Internet, I’ve experienced a 1000% increase in sales. Still, selling 10 is not worth it.”

This is true if your only product is red number 5 buttons but if you are are selling thousands or even millions of products each year then selling 1 button a year is fine because you’ll be making thousands or millions of single digit sales every year and this will add up to significant income. Amazon and eBay have got particularly smart to this by essentially aggregating sellers and taking a cut along the way. They don’t have to pay for warehousing (which is a hassle if you have to store large, obscure items that might only sell once every few months) or packaging and they don’t even have to provide significant customer support. That, for me is where the long tail really comes into its own. These two can offer pretty much any product I might want even though they don’t actually sell it themselves. Effectively they’ve become product search engines rather than retailers in the traditional sense.

I think that we also forget that sites that sell both blockbusters and obscurities also editorialise and advertise to their users so purchases are not simply determined by individual tastes. This is important because clearly there will be greater ROI for DVD retailers who push the latest blockbuster to all their users rather than an obscure reissue. Quite simply more people have seen (and are therefore more likely to buy) Spiderman than Le Cercle Rouge. This creates a positive feedback loop that pushes these products to top of sales and review charts.

When looking at the longtail, don’t look at “social media” – films / music.

Look at other items to get the picture.

DUH!

A thousandth of a percent of $500 million is $5000 – one is the take for Indiana Jones 4, the other is a decent side income for a personal hobby creating how-to videos online.

Even at a millionth of a percent, $5 in ad revenue is more than it costs to deliver that content online. Aggregate that over billions of videos and you’ve got Youtube. Maybe HBR can look into them next.