Monday, November 26, 2007

The Long Tail

I finished reading “The Long Tail” by Chris Anderson. I really enjoyed reading this book, though I was familiar with the Long Tail concept from previous readings.

To introduce the theory of the Long Tail, Anderson writes:

Increasingly, the mass market is turning into a mass of niches…Our culture and economy are increasingly shifting away from a focus on a relatively small number of hits (mainstream products and markets) at the head of the demand curve, and moving toward a huge number of niches in the tail.

The author identifies three forces representing a new set of opportunities in the emerging Long Tail marketplace:

  1. Democratize Production
  2. Democratize Distribution
  3. Connect Supply and Demand

He then explains these opportunities in detail in chapter 5 (The new producers), chapter 6 (The new markets), and chapter 7 (The new tastemakers) which are in my opinion the most important chapters of this book. Somehow the following chapters repeat the same information though they include interesting real life examples.

Below, in table form, are some characteristics of each of the three driving forces of the Long Tail. (Reproduced from the table on page 57)

The first force is democratizing the tools of production. The distinction between "professional" producers and "amateurs" has blurred, as the tools of production and creativity has become cheap and ubiquitous.

The second force is cutting the costs of consumption by democratizing distribution. “Aggregators” are a manifestation of this second force. Anderson gives several examples of Long Tail "aggregators". Google aggregates the Long Tail of advertising, Bloglines aggregate the Long Tail of online content (blogs), Wikipedia is an aggregator of the Long Tail of knowledge and those who have it.

The third force is connecting supply and demand, introducing consumers to these new and newly available goods and driving demand down the tail. Anderson stresses the need for “filters” that should help us find quality in the Long Tail. As he puts it Amplified word of mouth is the manifestation of the third force of the Long Tail: tapping consumer sentiment to connect supply to demand. The first force, democratizing production, populates the Tail. The second force, democratizing distribution, makes it all available. But those two are not enough. It is not until this third force, which helps people find what they want in this new superabundance of variety, kicks in that the potential of the Long Tail marketplace is truly unleashed”.

In the last chapter, Anderson summarizes the Long Tail concept and writes:

The secret to creating a thriving Long Tail business can be summarized in two imperatives:

1. Make everything available.

2. Help me find it.

He then finishes by giving nine rules of successful Long Tail aggregators:

Rule 1: Move inventory way in...or way out.

Rule 2: Let customers do the work.

Rule 3: One distribution method doesn't fit all.

Rule 4: One product doesn't fit all.

Rule 5: One price doesn't fit all.

Rule 6: Share information.

Rule 7: Think "and", not "or".

Rule 8: Trust the market to do your job.

Rule 9: Understand the power of free.

I highly recommend this book. Chapters 5, 6, and 7 are must read for everyone who wants to get a big picture of the three forces of the Long Tail.

1 comment:

susan smith nash said...

This is a great post -- wonderfully clear and pertinent to elearning.