Customer Reviews

The Long Tail: Why the Future of Business is Selling Less of More

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Well, timing is everything... and isn't always fair. Had I not just completed reading Jeffrey & Bryan Eisenberg's "Waiting For Your Cat to Bark?" before picking up "The Long Tail," I would probably have given this book 4 stars.

Chris Anderson has done a very good job of showing us the new "economics of abundance," or the connection of supply and demand thru technology and the Internet.

Question: What happens when everything in the world becomes available to everyone?

Answer: A market that never dies... markets for every niche, and vice-versa.

The Long Tail.

Using corporate examples like Google, eBay, iTunes and Netflix, Anderson lends an interesting perspective on how these companies have grabbed the Long Tail theory (consciously or unconsciously) and used it as the foundation for their staggering success. For customers of these companies, being online means unlimited "shelf space" - access to hundreds of thousands of bits of information, products and services they'd never been exposed to otherwise.

But how does the ordinary businessperson experience the success of the eBays of the world? Here, Anderson falls short. He states his "secret" to The Long Tail:

1. Make everything available
2. Help me find it

It's the "help me find it" part that Anderson ignores. In fact, it's the end of the book... you're left hanging, thinking, "So how in hell am I supposed to help people find me?"

Taken for what it is - a good presentation of a present-day theory (and one that was adequately covered in the original article in Wired magazine), the book is fine. But to really understand what it takes to make the Long Tail theory work for you, you must get a copy of "Waiting for Your Cat to Bark." It's in-depth coverage on not only how our economy works today, but understanding how people buy, how to understand what they're looking for and what you need to do to create persuasion magic not only on your website but in all your marketing materials.

This is not a time for "build it and they will come." Understanding an economy is only the first step. The real question is - what are you going to do about it to make yourself an integral part of the Long Tail?

It's too bad "The Long Tail" and "Waiting For Your Cat to Bark" can't be sold in a box set - they were made for each other.

The long tail is the colloquial name for a long-known feature of statistical distributions that is also known as "heavy tails", "power-law tails" or "Pareto tails". In these distributions a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually "tails off". In many cases the infrequent or low-amplitude events--the long tail--can cumulatively outnumber or outweigh the initial portion of the graph, such that in aggregate they comprise the majority. In this book the author explains how due to changing technology it is now not only feasible but desirable in business to cater to the "long tail" of this curve.

The author explains how in traditional retail, you have the 80/20 rule, with 20 percent of the products accounting for 80 percent of the revenue. Online, instead, he sees the "98 percent rule." Where 98 percent of all the possible choices get chosen by someone, and where the 90 percent that is only available online accounts for half the revenue and two-thirds of the profits. He also explains how filters and recommender systems that help people find what they are really looking for are crucial ingredients. Thus, in a nutshell, Anderson's theory is that mass culture is fading, and being replaced by a series of niches. Thus the subtitle of his book, "Why The Future of Business Is Selling Less of More."

The author explains that the three forces of the long tail are:
1. Democratization of the tools of production such as GarageBand for musicians.
2. Minimization of the costs of distribution which in turn minimize the cost of consumption such as wideband internet connections.
3. The connection of consumers to one another to minimize the noise down the tail, such as this Amazon review system.

In this brave new world of niche markets, the author explains the new producers, markets, and tastemakers all of which are largely driven by the technological forces of cheap hardware and increasingly sophisticated recommender systems that tap the on-line purchasing habits of consumers and match individuals with the products that are likely to interest them the most. Anderson goes on to explain the power of Long Tail economics by citing sales and trend data in three media: books (Amazon), music (Rhapsody) and movies (NetFlix). He postulates the seemingly incredible claim that Walmart is in fact elitist, since they are constrained by physical space to offering only the most popular products. This is another basic premise of the book - that until the birth of the Internet physical space constrained retailers to offering only the most popular 20% of items because they represented 80% of the purchasing power.

The author's arguments hold up the best when he examines the entertainment industry. It is obvious that the recording industry is at a loss as to what to do about the fact that their sales are fading fast other than to blame piracy and sue consumers that dare decide that an overpriced vanilla-sounding boy-band CD is not worth the price. You can also see the desperation in the movie industry too, that has resorted to begging people to go to the theaters at the Academy Awards, but continues to mainly output recycled and formulaic products and reaps the expected mundane ticket receipts.

However, I think that the author overlooks two points. First, people crave some kind of common conversation with their fellow man. If we are all broken up into groups of a dozen each that all have the same politics, like the same music, and watch the same movies, then the community at large is duller for it. Take "American Idol" for example. It is obvious that this is not a hit show because America thinks that the winner is going to be the next Elvis Presley. In fact, the winners usually represent the plain vanilla output that has brought the recording industry to its knees in the first place. Can you see someone as gritty as Joe Cocker ever winning this contest? It is the audience participation and the feeling that you are part of the outcome that is the appeal. Also, people flocked to the very successful Harry Potter movies and the Lord of the Rings trilogy just as much because everyone else was going and taking their kids to see them and thus they were part of society's "common conversation" as they were because of the quality of the films. The second point that the author overlooks is that the monopolies whose death he cheers due to the "long tail" are simply being replaced by other monopolies. Who else but large businesses with the resources to mine the hugely diverse "long tail" shall prosper in the long term? A case in point is that the author himself keeps coming back to the same companies when he talks about "long tail" success stories.

In summary, although this book is a bit repetitive at times, it makes some good points. The author does a good job of tying the old familiar "long tail" statistical graph to the rapid change in purchasing habits over the last ten years, which is something that nobody else had succeeded in doing until he articulated the trend.

Chris Anderson has written a thought-provoking book in The Long Tail. It's about the new economics of culture and commerce. While I enjoyed thinking about the main premise - that the Internet has dramatically changed the interplay between supply and demand - I once again concluded that the book could have been a lot shorter (possibly a result of my taking the book "Blink" to heart).

The title refers to the shape of a classic downward-sloping demand curve if you graphed popularity (x-axis) vs. demand (y-axis). Think about book industry where the demand for a few titles (bestsellers or even top 100) is very high, but demand for the 200,000th most popular book is sporadic at best. Consequently, Barnes & Noble stores can only carry books with a certain level of demand and will miss a lot of the niche topics that are out there.

But, because of the Internet, the demand captured in the 'long tail' of this curve, comprised of thousands of niche businesses, represents a vibrant business. For example, while the typical Barnes & Noble will carry 100,000 titles, Amazon offers 3.7 million and says that 25% of their sales come from books outside of the top 100,000 titles. They claim, and the premise of the book is, that as companies offer increased supply (because in the new Internet economy, they can), demand seems to follow supply and, in fact, increases.

Another related trend is the transition across business lines from 'hit' to 'niche', which is exemplified by the popularity of myspace.com, ebay, itunes and google (representing the long tail of advertising).

The six main themes of the book are:

1. In virtually all markets, there are far more niche goods than hits, as a result of improvements in the basic tools of production (i.e. Internet).
2. The costs of reaching these niches is now falling dramatically thanks to digital distribution, search and a critical mass of broadband technology.
3. There are a range of tools - from recommendations to rankings (think search) that help to shift demand down the long tail, and help people find useful/relevant niches.
4. The effect of all of this is that the demand curve will eventually flatten, with the hits becoming relatively less popular and the niches growing in popularity.
5. All of the niches add up to comprise a market that rivals the hits.
6. The internet can reveal a natural shape of demand, undistorted by distribution bottlenecks, scarcity of information and limited choice of shelf space.

I would recommend this book to all those interested in a well thought out premise on how the internet has radically altered many business models due to various supply and demand characteristics and the ability to exploit demand that would previously not have been profitable.

This is an important book, and its also an easy read. It's a must-read for anyone who works in media, retail (whether physiscal or e-commerce), or supply chain management, or who thinks they might do so some day. I would also recommend it to general audiences.

I cannot give it a higher rating because of the following quibbles with Anderson's writing and ideas:

1) Anderson's writing still reads like magazine journalism (it especially betrays his time at _The Economist_), and therefore doesn't "stretch" very well into book-length material. The repetion and upbeat, example-laden style do a disservice, in that they encourage skimming.

2) In the chapter on "The Short Head," Anderson is foolishly optimistic about the "abundance" of the long tail/e-comm world, going so far as to say that classical economics' central theorem -- that finite resources need to be allocated among infinite wants and needs -- is no longer valid. But resources are still scarce: if they weren't, Amazon would not charge you any money to deliver a copy of Anderson's book to your house!

3) Anderson offers a rose-colored description of e-comm "filters" and the way that they can bring customers from best-sellers into the long tail. I have had lots of frustrating experiences, for example, with Amazon's recommendations, which tend to push me further down into "niches" than I want to go, don't always recognize that once you've bought a Penguin Classic you won't be interested in the Everyman Library edition of the same book, and don't make lateral connections between niches that would be obvious to anyone browsing in a physical bookstore. Similarly, searching for the most current edition of a reference or textbook can be frustrating -- reviews are not carried over from the previous edition, editions that are 10 years out of date may be ranked ahead of the current edition, etc. (These are the frustrations of someone who has been on the 'Net for 15 years and works with e-commerce technology all the time; how my parents fare on Amazon, I dare not guess.) I say this not as a condemnation of Amazon's technology, which is constantly (and usefully) evolving, but merely to point out that e-commerce in general is not as user-friendly as Anderson depicts it.

4) I find the chapter on Wikipedia et. al. as "the long tail of content" to be the least persuasive; I would have preferred it if Anderson had stuck to his original scope (sales), and not taken a right turn into content creation/product development.

Overall, this is a fine book and it deserves the attention it has received.

When you want to eat ice cream outside your home, do you go to a store that offers only chocolate and vanilla . . . or do you go where there are many more choices? Most people will do the latter. That's the basic point of this book. If you're satisfied with knowing that point, you don't need to read the book. Instead, you could settle for Mr. Anderson's article in the October 2004 issue of Wired.

But if you are like the growing legions of people who enjoy knowing more about the quirks of micro-economics (such as those who were intrigued by The Tipping Point, Freakonomics and Fooled by Randomness), The Long Tail will provide much entertainment.

Let me explain what a long tail is. If you plot the popularity of various products (say, books on Amazon) with the most popular products at the left, the left part of the curve will be very vertical (the head) and there will be a long list of items to the right that will have relatively few sales (the tail). Mr. Anderson's point is that as it becomes economically viable to produce and distribute more low-volume products (such as print-on-demand books and e-books), there will be more items available to purchase at any outlet . . . and the length the tail to the right will grow. As more outlets can afford to make these items available, the thickness of the tail will also grow.

A physical store will only distribute a small percentage of the items, stopping where the offering no longer adds to its targeted rate of profits. An on-line store will have far more items (such as Amazon), appeal to more customers and sell lots of its volume in relatively unpopular items. The author estimates that 25% of Amazon's book sales volume, for instance, comes from outside the 100,000 top selling books.

Here's where Mr. Anderson begins to lose his way: He tries to describe the sociological implications. He sees, for example, a loss of common cultural items of the sort that talking about the Beatles appearing on Ed Sullivan once provided. He imagines a world in which everyone drifts off into various different niches and the size of the head becomes less vertical. While that may be true, it doesn't correctly forecast the amount of commonality in the culture. The sales of any given item over time may well be in both the head and the tail. Or an item could be a sleeper and always be in the tail, but if enough people buy it, the item will become part of the common culture. In addition, some elements of common culture don't appear in sales curves. I'm sure that yesterday's arrests in the alleged plot to bomb a number of airplanes have already become part of the common culture.

I won't go on to point out his other errors. I'm sure you'll notice them for yourself.

The other disappointment was that he doesn't do a very good job of describing strategy choices for product producers. It seems to me that the long tail is simply another argument in favor of intense individual product and service customization of the sort that Dell has been giving us for years in computers and related equipment.

My grade of 3 stars for the book is 5 stars for long-tail trivia and 1 star for sociological and producer analysis.

If you haven't read any of the following books, The Tipping Point, Freakonomics and Fooled by Randomness, I recommend that you read those long before you get around this one. They are much better books about micro-economic implications.

This book started off as an article in Wired Magazine, and it was an excellent one. But Anderson must have decided to cash in, because the book doesn't add anything that wasn't covered in the article itself. It's not a complex concept.

Read the article on the Wired website. Then go spend your money on something from a tiny niche market.

Chris Anderson is an editor for Wired Magazine. A couple years back he had (or stumbled upon) a great insight, namely that the internet and digital storage were changing the cost structure normally associated with keeping huge numbers of units in stock for customers and that was changing consumer buying patterns. That insight led to a Wired article that was apparently the most commented-on in Wired history. That makes sense; the concept is truly interesting and a number of companies (like Amazon) have based their business model on it. That said, I think you'd be better served to read Anderson's original article than his book.

In the book, Anderson repeats the same idea many times and gives a lot of examples almost always revolving around music sales. While Anderson touches on a couple of other ideas like Amazon and Wikipedia, his constant fall-back to the music example begins to make you feel like Anderson either got lazy on research or that there isn't much depth to the long tail concept.

Whatever the case is, it seems that reading Anderson's original article will save you a lot of time and give you his concept in a more powerful dose.

This isn't a bad book, but I'll bet it was a much better article. It's worthy of four stars for the insight Anderson had if for no other reason.

Like other reviewers, I found myself skimming towards the end, when the author starts to repeat himself. However, throughout most of the book, by attention was sufficiently captivated. If nothing else, it shows how people a decade younger than me are far surpassing my generation in terms of harnessing the internet.

When I was a teen, I was interested in non-mainstream music. The only way to discover this music was word-of-mouth from friends and peers, buying magazines like Alternative Press, and making the trip across town on the bus to shop at the independent music store. Nowadays, those interested in niche genres of music have MySpace, peer-to-peer filesharing, etc. You don't have to buy magazines, or travel for miles to find the music on the shelf. It's as close as your computer screen. Kinda makes the cassette dubs we made in my day seem like child's play.

The ramifications of sophisticated technology at next-to-nothing cost is a prevalent theme in Anderson's book. However, there are glaring omissions, and a problem in format. For example, he makes a big deal about how a quarter of Amazon's online book inventory sold cannot be found in even the largest book superstore. Before you strike the death knell for the bookseller industry, there's one name the author is remiss to leave out: Oprah Winfrey. For all Mr. Anderson champions consumers as the new tastemakers, she is the ultimate tastemaker, like it or not. And her recommendations are through her television show, not the cutting-edge technology channels mentioned in the book. Furthermore, those books can be found in any superstore, not just online.

Formatwise, a lot of the tedious repetition could have been weeded out, and replaced with more focused chapters. I would have liked to have seen chapters that only dealt with one form of media (one for music, one for books, one for television, etc). This would have been preferable to the how-many-ways-can-I-tie-a-scarf approach.

Hits are great for business. Wal-Mart carries a very small number of CDs and books compared to the number of titles that are published each year. And if a CD or book isn't selling, it's gone. They only have room for the gig hits.

The only problem is that the hits today rarely sell in the quantities they used to. People are finding the products they really want, ant the net is the facilitator. Our society is quickly leaving the mode of only buying the Billboard top 40 and the NY Times bestseller books. This brings forth a new business model.

Amazon also sells the hits, but they carry thousands upon thousands of books and CDs that are not popular. But somewhere out there, someone wants a book on the most obscure subjects, or a piece of music that few would ever venture into. Amazon has lowered the cost of carrying nearly all the available titles, so even if something sells one copy a quarter, they can still make money on it. Multiply this times millions of titles, and you have a big aggregate revenue number.

Downloadable products, such as mp3 files and ebooks have almost no cost to carry and list. These companies have huge margins and huge inventories.

Unfortunately, this book is most helpful to people who can build a business that follows this model. Carry "all" the products in a market, and you will increase your chances of success enormously. If you are creating a product that occupies the Long Tail portion of the market, this book won't help you sell more product. For that, read books on viral marketing. You'll need people to build a buzz abot your product. The Long Tail is a way for the merchant to make money, not really for the producer of any given product.

The Long Tail of economics only works as a model for "stores" that generate huge volumes of traffic. Traffic that will cover even the most obscure products in the catalog. Without massive traffic, you lack the customer diversity necessary to power the model. It could take millions of dollars in advertising and marketing to build up your traffic base.

Pick up a copy of this book for many examples of this phenomenon. It's a very engaging read, even if only a source of better understanding today's changing mass market.

Does the "long tail" apply to things other than music, computer software, and products that are composed largely or wholly of "information"? Anderson seems to have anticipated this interesting question, alluded to in comments below. Perhaps he was responding to comments or criticisms he received pre-publication.

In any case, in a fascinating passage, Anderson tries to make the case that there is a "long tail" for kitchen food processors! That's a pretty solid, durable, non-information product. He writes that KitchenAid only offers three colors in a given year, but many other colors are now available on Amazon or on the company's Web site. And those colors do sell to an extent, although white, black, and the colors available in stores predominate.

But what does this example really tell us? One of the basic ideas behind the "long tail," and part of what makes this an innovative business book, is the notion of "breaking the tyranny of the shelf." (Page 94). Whether expensive shelf space is outsourced to others or is simply not needed at all, a seller of books or music can avoid the expense and offer a wider array of products at essentially no carrying cost. But think of those turquoise and olive green mixers just sitting there, gathering dust and accounting for less than 1 percent of total KitchenAid sales. How long will KitchenAid keep them on its physical shelves?

Also, a current New Yorker article casts some doubt on what is becoming the conventional cheery understanding of Wikipedia, one of Anderson's favorite examples. Rather than a brilliant instance of the "wisdom of crowds," Wikipedia is portrayed as a chaotic, frat-boy culture that needs to impose dozens of rules to keep its acolytes in line. On Wikipedia, as in life, dedicated, thoughtful folks who write prudently and well tend to produce great, up-to-date stuff, and people with an ax to grind tend to produce tendentious nonsense.