I finally got around to reading The Long Tail by Chris Anderson, Editor-in-Chief of Wired Magazine. If you are not familiar with the “long Tail” concept (which seems unlikely) the basic idea is that while you can make a lot of money selling hit movies, music, books, etc, you can also make a surprising amount of money selling a little of a lot of less popular movies, songs, books, etc.
Amazon.com has been one of the biggest poster children of the Long Tail effect. As they started their business they carried many more books than it was possible to carry in the local Barnes and Noble. Both Amazon and the local book store would carry the latest New York Times best sellers but Amazon would also carry books that were not economically viable in a local store. They might only sell 100 copies of one book a year, but they might have a million books that they sell 100 copies of. The long tail is a graph of a demand curve.
I have been putting off reading this book not because I thought the idea was uninteresting or unimportant but because I had not grasped the depth of the idea and just how much more there was to glean from this simple idea. Anderson no only explains how Amazon.com is a natural progression from previous long tail ideas like the Sears & Roebuck catalog but also how the long tail is not one demand curve but the some of a larger number of niche demand curves. This is made most obvious as he analyzes how the music business sells fewer “hit” Cds any more but has numerous niche hits and an amazing variety of niches. Part of what is driving the long tail is the ability to search and find products of interest.
Anderson’s book should be a must read for anyone who is interested in business or working in a business that is effected by the change in demand curves, which is just about everyone. It is a well-researched and insightful book about a topic that was deeper that I realized.