(Not so) Long Tail…

December 28th, 2008 by Timo Vuorensola

In 2004, a man named Chris Anderson came up with a theory he was calling The Long Tail. It was an idea of the future of shopping in the environment where shelf space is unlimited – that is, of course, online.

Mr. Anderson’s theory dictated that in the future people will start buying a much wider spectrum of products online, now that they are easilly available, and they don’t have to stick with blockbusters – suggesting that in the future the blockbusters would die, and the future of business would be “selling less of more”.

Anderson called this Long Tail, because, instead of the traditional way where people buy what’s popular, so you need to sell popular stuff in order to make money, consuming habits scatter through a much wider range of products along the long tail of the marketing curve (as shown on the graph on the left, stolen from New Scientist.)

Now, the latest results of the Internet shops claim that mr. Anderson was wrong: it is still the blockbusters that rule. For example, Internet music business, that was one of the great examples of the long tail in effect, shows that out of 13 million tracks only 52,000 (0,4%) cover over 80% of the sales made online, and rest remain virtually untouched. And the same phenomenon keeps on repeating through most of the products on the Internet.

As an example, let’s take HIM and Älymystö, and a music store owner who wants to sell great ambient industrial noise. According to the traditional way, he’d have to sell HIM instead of Älymystö, because that’s what people were buying and that’s what kept him paying the bills. Now, according to Long Tail theory, he takes his shop off the street and moves it to the Internet, and starts selling Älymystö and hundreds of other noise musicians in addition of HIM and The Rasmus, and he would’ve believed he’d make the same income by more people buying only few units of different noise musicians that are wonderfully available through his webstore.

But what happens, he still finds out it’s the HIM the people buy, and nobody buys any units of Älymystö or other great stuff he’d loved to sell. So no matter the fact that now there’s a much wider range of stuff available, people still stick to the big sellers instead of exploring the tail.

This is also shown with Levyvirasto’s recent statement of the inexistent Long Tail effect there: half of the small bands at Levyvirasto don’t sell any units.

According to New Scientist, who wrote an interesting article on this topic, it’s because buying blockbusters is, in addition of being easy way to get entertainment, a way to belong to a bigger group, and that’s what people are all about: belonging to a group. Sort of depressing, but not very surprising.

But I still believe that Long Tail effect does exist, it just takes a much, much longer time for it to actually work. The evolution of consuming is, in the Internet era, always thought of taking maximum of 5 years and after that everything is changed. I’m much more skeptic, and even most of the small changes will take at least 6-10 years to actualize. Also, I think there’s a problem in the marketing – people are still fed with this blockbuster mentality, and the idea of “start exploring” still means “oh, HIM has done other albums, too!”, instead of really getting people excited of digging deeper into the long tail.

(Via Älymystö blog.)

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4 Responses to “(Not so) Long Tail…”

  1. Nimril says:

    Well, I think the problem at least for music persists as long as the music stores are not even trying to promote all the music they have. If a music store only presents the user what (s)he was searching for (HIM) there is no chance of getting the long tail effect. One step to right direction is recommendations based on similarity of the music. However, as long as this means that the store recommends also Paula Koivuniemi when I am browsing for Apulanta, there is something really badly wrong and again the long tail effect has been prevented efficiently.

    I have gotten some feeling of the long tail effect in a popular Internet music site where they promise to recommend new music to you based on what you listen to. At least I have found some new music that way. Interestingly, the previous experience in this category was almost a decade ago when you could download free music from the Internet pretty easily. At least I found some interesting songs that otherwise I would never have come across.

  2. Max Fun says:

    You had to take such an extreme example as Älymystö of all possible choices, didn’t you? :)

    Well, there’s an obvious obstacle for such a long tail effect to take place majorly in music business. Given there are practically unlimited pieces of music around, and no one will ever have enough time to listen to them all, there’s no point in checking out evenly through all the weirdest performances, too. People want to pick up things they are more likely to like, and the best basis for their decision – before knowing what each piece actually is like – can only be a recommendation from someone else. That recommendation may be from their friend, general popularity (charts, for instance) or by promotion. Of course, for music companies promotion costs, so they cannot promote but pieces that will lilkely sell way more than their cost. So, there will only be promotion for very few pieces. And this turns the sales curve back to a shorter tailed one.

  3. S says:

    Give it time.
    People are still used to the old way of doing things.
    They still get their bands and what they think they are supposed to be listening to from MTV and other mainstream outlets.
    It won’t be until the majority of people are exploring their independent tastes rather than those of others, prefiltered by media, that we start seeing some change.
    When tools like ( http://www.last.fm ) and ( http://movielens.umn.edu ) and others start to seriously be utilised.
    People like us who really live on the internet are still in a minority.

  4. bubi says:

    Little late response but still:

    Funny ways people think here about Abderson’s theory. First of all the theory itself has nothing to do with online selling or marketing. The Long Tail is just a metaphor to picture how companies could make their profit. The Long Tail can be made by numerous ways like online-selling, lowering the prices, manufacturing related things etc. etc. And by that you just have a big volume to sell things. I think people are little confused about the theory cause Anderson used Amazon.com as an example in his original article. (the key to success was Amazon’s referral-system).

    The digital market and selling is just the most obvious phenomenon to cling to in this discussion and are seen as the future of long tail profit making. People are still refusing to consume crap even they got it free or very cheap. It must have even some value to them. Levyvirasto is a good example. The half of the stock is absolutely rubbish there. Just young guys thinking “hey! let’s put our record to online market and make some money”. You do not consume things you don’t need at all ;)

    Now we have Spotify which could make a new twist how we are consuming music. And where lays the Long Tail then?