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'Long Tail' May Not Wag the Web Just Yet 132

Carl Bialik from WSJ writes "Expanding on an article he wrote in 2004 (and discussed on Slashdot), Wired magazine editor Chris Anderson argues in his best-seller 'The Long Tail' that the web is changing commerce from a hit-driven business to one focused on niches. But Wall Street Journal columnist Lee Gomes questions Anderson's data, and adds, 'I don't think things are changing as much as he does.' Gomes writes, 'At Apple's iTunes, one person who has seen the data -- which Apple doesn't disclose -- said sales "closely track Billboard. It's a hits business. The data tend to refute 'The Long Tail.' " ' On his blog, Anderson responds that Gomes 'stumbles over statistics and more, and in the end simply makes a muddle of what might have been an interesting debate over the magnitude of the Long Tail effect.'"
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'Long Tail' May Not Wag the Web Just Yet

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  • The web has FAILED!
  • Look at Amazon sales (Score:5, Informative)

    by Anonymous Coward on Wednesday July 26, 2006 @02:37PM (#15785974)
    Amazon doesn't keep their sales rankings private. There is clearly an element of hits ("best sellers") and long tail (everything else that isn't new). I've seen books from the 90s go from the 500,000s sales rank to the 1,000,000s range and back over the course of a year.
    • The cool thing is that through AWS (Amazon Web Services) Amazon lets you into some of their data. An example here is the sales history of Running Blogs with Slash []. TicTap keeps 60-day sales rank history. I'm guessing with this book there was some free publicity on June 13 and July 19, because the ranks shot up a whole lot. You can then see it died out for a while, then shot back up.

      First off, Amazon sales rankings aren't that useful []. But, it's still interesting to look into them. For example, look at the []
    • Is that meaningful? (Score:2, Interesting)

      by yankpop ( 931224 )

      So what? How many copies do you need to sell to get an Amazon rank of 500,000? How many for 1,000,000? I'm guessing that to qualify for a rank of one millionth you'd have to sell somewhere in the 0-1 copies range. So if two people bought your book in the last week you might 'spike' to 500,000th, then drop right back down until your next sale in 2020. Hardly a compelling argument to support the importance of the long tail.


    • 500,000s sales rank to the 1,000,000s range and back over the course of a year.

      We call this "noise." What you are seeing is the effect of a random event on low absolute values.

      One extra person bought/did not buy the book to create the variance, whereas one extra/lost sale of a best seller doesn't even register.

      One sale is a datum, not data. Noise is meaningless - unless you're an epidemiologist.

    • Books aren't songs. Book consumers can think better than music consumers (overall), pay more in money and time so are more committed, and have to wait for delivery. In other words, book "hits" are completely different than music hits, and are much more similar to book niches.

      Of course, I hope publishers decide "the long tail" is BS, and concentrate solely on hits. Because the new music hits they manufacture are worthless, and I want them to stop hogging the copyright on all the long tail stuff. So we can al
  • by LunaticTippy ( 872397 ) on Wednesday July 26, 2006 @02:38PM (#15785977)
    I don't see how having 3 million songs could not change everything. Even a good record store will only have a few thousand different CDs. Naturally the most popular will match the top 40 or whatnot, but there are millions of extra choices that will sell every now and then. As it grows to 30 million, we can expect the long tail to kick in more and more.
    • It's a question of shelf-space. My local Blockbuster has mostly "hits" on the New Releases shelf, and an even larger percentage of "hits" among the year-old titles they've decided to keep on hand.
    • by khasim ( 1285 ) <> on Wednesday July 26, 2006 @02:50PM (#15786070)
      It is possible with items that take no physical space (music on your iPod or NetFlix rentals), but not so with anything else.

      For items that take physical space, the limitation will be the space available to the average consumer.

      If 100 titles account for 90% of your sales and you have 1,000 titles that account for the other 10%, adding 10,000 titles will just give people 11,100 options to take up their limited space. If they have space for 100 items, then most of them will be focusing on the same top 100.
      • It is possible with items that take no physical space (music on your iPod or NetFlix rentals), but not so with anything else.

        It is true that data takes essentially no physical space, but it is not true that it takes no resources. A file sitting on a filesystem is maintained in various ways; it is scanned to build file databases, possibly moved in a defrag, possibly copied in a RAID configuration or backup. These operations take a tiny but nontrivial amount of processing time. There is also the extra cost
      • In many modern consumer economies, however, the top 10 only appeal to a minority group though. American Idol may be the most popular show of the decade, but still many more people who watch TV don't watch it than do.

        The fat head (or whatever the opposite of the long tail is -- if that catches on, I'm claiming credit) might be the most lucrative market segment, but if you only cater to it, you're still cutting out the majority of consumers.

        This is exactly the problem with traditional cinema distribution the
    • by andrewman327 ( 635952 ) on Wednesday July 26, 2006 @02:53PM (#15786093) Homepage Journal
      As a fan of very obscure music, I am glad that there is a place I can find it. Try finding A Flock of Seagulls' third album in just any store.

      I think that a lot of the comments here are missing the point. You do not have to advirtise for the bottom 50% of music. It already has a devoted niche following. Just realize that it will never be as popular as the chart toppers.

      • How strange (Score:3, Insightful)

        I have "Story of a Young Heart" on vinyl, bought it when AFOS was still somewhat popular. I was listening to a cassette I made of the album in my old truck (cassette only) just last weekend.

        It's true you don't have to advertise. It doesn't cost anything really to have it available for download. Just sit back and rake in the .99 every few months or so.

        I'd like to see the music industry change in a lot of ways, but one really cool thing would be for the top 40 to account for 10% instead of 99.9% of sales
        • In my experience, I have a very hard time recalling the names of bands/songs/albums for genre's that I like or have liked in the past. So, the search criteria helps there, not following the crowd that is. But, if you call looking at the top 40 and hearing new and cutting edge songs in order to find new and interesting artists or genres, then, I guess, following the crowd it is.

          In my fellow posters words, though, how arrogant..
        • Re: having obscure music available.

          It's true you don't have to advertise. It doesn't cost anything really to have it available for download. Just sit back and rake in the .99 every few months or so.

          [sigh] the same "doesn't cost anything really" fallacy.

          Sure - it doesn't cost 'anything really' for a single piece of obscure music. The problem comes when you are handling a couple of million obscure bits of music - those little costs start to add up fast. Even if it only costs a (US) penny

          • Re:How strange (Score:3, Interesting)

            by Eivind ( 15695 )
            If you're storing a million songs online, then frankly, $10.000/month is a very small cost. If you sell these songs for an average of $0.69 then you need to, on the average, sell one copy of a song every 5 years or so to break even.

            It's true, songs that sell less than 1 copy every 5 years don't turn a profit, but that's still very different from a record store. Try stacking a record-store with all songs that sell atleast 1 copy ever 5 years....

            Besides, sysadmin-costs and so on do not go scale O(n) with

          • I have 100,000 songs on a $100 drive. It'll last 3 years average. That's 3/100th of a cent per song per year. All the other costs are sunk. You're going to have a datacenter anyway. You're going to have racks. Servers. Just a few hundred watts extra.

            I'm not claiming it's free to sell millions of songs over the internet. I'm claiming if you're selling millions of songs it is insignificant extra cost to have a huge catalog.
      • Too much is nonfindable as it is. Where can I buy "Natural Tools" by "Weld" ? I had it once, and loved it. Alas, the CD went missing, and after that I've been unable to find *anywhere* to repurchase it.

        I suspect a very large portion of copyrighted works become unavailable a LONG time before copyright expires.

      • I think that a lot of the comments here are missing the point. You do not have to advirtise for the bottom 50% of music. It already has a devoted niche following. Just realize that it will never be as popular as the chart toppers.

        I wouldn't quite go as far as to say "don't advertise". However, the focus of targeted advertising campaigns should remain on the big hits, where a small percentage sales increase may yield big numbers. Long tail advertising should probably rely on broader swaths... not single

    • I think you're on to something that's the key all this (I haven't read the book, so I'm probably making a weak version of the points the author makes):
      What do people do when they can choose from everything?
      I mean seriously, what if you could go anywhere, see anything,listen to anything, etc.

      This explosion of choice is partly a product of the internet, but also a product of dropping prices on consumer items. Most middle class Americans can now afford any work of music they want,
      • Well, California has suffered from booms before. 1849 for example. Back then it was very difficult, but still millions did it. People do tend to fall into herd mentality.

        Things have already changed a bit, though. When I was a kid in the 70s there were just a couple of TV shows that people talked about. We have much more choice now. It is kind of neat to run into someone into Red vs Blue or Venture Bros. or some other thing that simply couldn't exist in the 70s. There is a lot of crap too, but that's
    • Although I've never used itunes I think the main difference between netflix and itunes may be that on netflix you have detailed reviews and ratings for every title no matter how far down the tail it is, whereas on itunes you don't have ratings? and so buying the longtail is more of a risk.

      Also I think there may be a psychological difference between a buck a track and 17 bucks per month. When you are buying at a price per song, you are thinking about whether you are likely to get your money's worth, however
    • I think this Long Tail business is just another way of verbalizing The Innovator's Dilemma: we are at the point where a disruptive technology has been deployed (the Web), but the market hasn't caught up yet.

      Example: Lets' say that Anderson's correct and Amazon makes a disproportionate amount of profit from low-sellers. Why is that? probably because the prices of the low-sellers have already accounted for *higher costs* than Amazon is incurring. I.e. those low-selling books still had to be edited, marketed,
      • It's a very strange market. Now that music, e-books, video, etc. has zero duplication cost and print-on-demand is viable there is effectively infinite supply. Price would tend to zero without government intervention. I don't know if supply and demand even make sense with intellectual property.
  • Duh (Score:4, Insightful)

    by TubeSteak ( 669689 ) on Wednesday July 26, 2006 @02:39PM (#15785982) Journal
    Ecast says 10% of its songs account for roughly 90% of its streams; monthly data from Rhapsody showed the top 10% songs getting 86% of streams.

    Part of the problem is, of course, advertising.

    The biggest sellers are always the most heavily advertised/talked about.

    How do you advertise the other ~90% of your catalog?
    Hint: You can't. Not in any specific way.
    • "How do you advertise the other ~90% of your catalog?"

      You can, but at the expense of the other 10% that is currently generating 90% of your income. What successful company in their right mind would risk that kind of cash cow?

      • Re:Duh (Score:2, Interesting)

        by Brickwall ( 985910 )
        "How do you advertise the other ~90% of your catalog?"

        The following snips are from Slate's recent article on the long tail:

        "At Slate, our inventory is our articles. We publish 20 or so stories every weekday, but we also have a backlog of about 33,000 pieces in our archives. Because those stories are freely available to our readers, a chunk of our traffic each day comes not from our "hits"--current pieces that are promoted on our home page, which typically draw tens of thousands of readers--but from olde

    • And I'd be willing to bet that those same 10% of songs represent over 90% of the airplay on pop, pop country, and hip-hop radio stations.
    • Re:Duh (Score:3, Insightful)

      by jdcool88 ( 954991 )
      The best way for these sites to advertise lesser-known products is to adopt the recommendations format of Amazon. I have found a lot of things on Amazon through their recommendations that I wouldn't have known about otherwise.

      Alternatively, they could use a program similar to Pandora.
      • The best way for these sites to advertise lesser-known products is to adopt the recommendations format of Amazon.
        Well, yes and no.

        Yes, that would draw more people into the ~90% of music that isn't wildly popular
        they would be advertising their recommendation 'feature', not the obscure music.

        Too much choice = too much noise.
      • by Kadin2048 ( 468275 ) <slashdot,kadin&xoxy,net> on Wednesday July 26, 2006 @03:19PM (#15786270) Homepage Journal
        An excellent point -- there might not seem to be any way to advertise the other 90% of apparent "non hits," but that's only when you consider advertising in the traditional, fixed billboard and shelf-end type of way.

        Advertising can take a lot of different forms, and I think Amazon is just scratching the surface with their recommendations. As advertising companies become less obsessed with just shotgunning a "message" out to as many eyes and ears as they can, and hoping they hit the right audience in the process, and instead catch on that you can get a lot more bang for your buck when you don't try to sell the same product to everyone, I think the "recommendation engines" type of ad-delivery will play a bigger role. (Because, when you get right down to it, the difference between a "recommendation" and an "advertisement" is just the context.)

        There are always going to be hits, because people always want new stuff. Even if everyone had access to the entire back catalog of human civilization, for free and on demand, there would still be 'new hits.' Not as big, probably, because right now there are a lot of people who only listen to hits because they can't find the stuff from the back catalog that they want, but they would still happen.

        What has to happen is that the music/movie companies have to realize that "hey, we make just as much money if you buy a song from 1994 than if you buy a song from 2006." That's the key thing that I don't think they've really understood yet, as evidenced by their seeming refusal to advertise anything but the newest stuff. A sale is a sale -- particularly when selling a back-catalog song doesn't mean that it's been sitting in a warehouse for 10 years, doing nothing but tying up capital.

        What I see happening is more individually-targeted advertising that takes into account consumer preferences and offers up stuff from the catalogs for them to buy. Once you've accepted that it doesn't matter whether the consumer buys "MI:3" or "Dr. No," as long as they're both your products, you can advertise whichever one they're more likely to buy. In fact, it's stupid not to advertise whichever one you think they'll buy, because to do otherwise risks losing a possible sale. It just makes good marketing sense.

        This requires that you have a lot of information on the purchasing patterns and preferences of each customer, but that's not hard to get (and a lot of people will give that up freely, if it means they get good recommendations).

    • Sure you can advertise the other 90% of your content. Look at what Amazon does. They look at what you've bought and said you like and they find other things you might like. Sure, as a consumer, I can't even look at 5% of what amazon could sell me, but a million consumers can cover 95% of what they sell, and actually be interested in buying it.
    • How do you advertise the other ~90% of your catalog?
      Hint: You can't. Not in any specific way.

      Hint: It's called P2P advertising, or as my grandma used to say, "Tell yer friends!"
    • >The biggest sellers are always the most heavily advertised/talked about.

      When all songs cost basically the same (say, $.99 as most do on iTunes), that's true.

      But what if the "hits" cost $.99 and the "old stuff" cost, say, $.50?

      How many people would sort by price and suddenly start buying on PRICE instead of what the latest advertising is pushing?

      When all songs cost the same, there is no tail.

    • The only gaming machine i have is a PSP.

      The shop that sold it tome asked me about itand i told them so.

      StillI keep getting advertisements for other gaming platforms and far and between forPSP titles, novelties and news.

      Companies are sitting in a gold mine of information and are doing naught with it
  • Mr. Anderson told me in an email...
    Mr. Anderson writes that as things move online....
    I was thus a little surprised when Mr. Anderson told me that he didn't have any examples...
    Mr. Anderson told me the lack of an example of misses...
    By Mr. Anderson's calculation, 25% of Amazon's sales are from its tail...

    My NEO!
    • Agent Smith: Did you know that the first internet was designed to be a perfect online experience? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program. Entire fortunes were lost. Some believed we lacked the programming language to describe your perfect internet. But I believe that, as a species, human beings define their online persona through suffering and misery. The perfect internet was a dream that your primitive cerebrum kept trying to wake up from.
  • by tcopeland ( 32225 ) * <> on Wednesday July 26, 2006 @02:43PM (#15786026) Homepage
    > [...] sales "closely track Billboard."

    Right, but isn't that the point of the long tail? If Dan Brown sells a bazillion copies of "Da Vinci Code" and I sell 500 copies of PMD Applied [], we're both happy since we're meeting the expectations that we budgeted for. Of course, he's then a billionaire, whereas I've still got my office in the laundry room, but, er, anyhow.
    • I think you're right, they seem to be missing the point of the "long tail." (By they, I mean I've read something like this recently at [].) The long tail seems to be taken to task for not being "big" - but it's not supposed to be big, it's the left-overs for the niche merchants and individual artists.
    • Your plug-fu [] is strong, master, you must teach me.
    • by deinol ( 210478 ) on Wednesday July 26, 2006 @02:54PM (#15786094) Homepage
      Right, but isn't that the point of the long tail? If Dan Brown sells a bazillion copies of "Da Vinci Code" and I sell 500 copies of PMD Applied, we're both happy

      No, Apple is the one that is happy. The point of the 'Long Tail' is really that a lot of money can be made from large stocks of low volume items. Particularly with digital merchandise where no product needs to be stocked or with things like print-on-demand where the product is produced quickly to meet actual orders. You may only sell 500 copies, but when Apple sells 500 copies of 100,000 different less-known artists songs they make a hefty amount of money.
      • Not only that, but when you become the most reliable source for those 100,000 lesser-known items, customers will tend to come back to you for the hits as well.
      • No, Apple is not happy about carrying a huge inventory of tracks that rarely, if EVER, get downloaded. But it is part of doing business.

        The tracks that get almost no play still takes space on your hard drive, eats space on your index, require time to enter information, etc.

        It is highly unlikely that 80% or greater number of tracks in iTunes will every sell enough to recoup the costs.

        Only reason they do it is because the other 20% or so more than make up for the rest and you need to be able to say "we

        • How much does it really cost to put an album on iTunes though? The hard drive space required is laughably cheap (probably about one penny's worth), and assuming that loading it onto the service requires the equivelent of some tech loading it into a CD-Rom, hitting "rip" and then just double checking to make sure the Gracenote info is correct and tagging the price, well, that's a 10 minute kinda job (if that). This also assumes some large blanket license (there is no way they're negotiating with each band
          • It does not take much money to get the song in the database. However, there are A LOT of songs that practically never get touched (I used to workf for a music distribution company). I would say there were about 80% of the catalog that averaged less than 1 download per month.

            So I have spent (and spending) about 80% of my capital investment, and more importantly, on going maintenance cost, for stuff that hardly ever get touched.

            These items will NEVER break even (due to the maintenance - ie. power, share of IT
            • So would your setup really only cost 20% as much, if you didn't host that extra 80% of music?

              • Do you have a point?

                So let say even if you got rid of the 80% of the title and you only keep the 20% that actually makes money. Let's say it costs twice as much since you are losing the cost benefits from scaling (unlikely, it probably would be closer to 20 ro 30% increase in cost, but lets just assume the worst). That would STILL BE 60% LESS to maintain then the old infrastructure with 80% catalog that lost money.

                So what is your point?

    • > [...] sales "closely track Billboard."

      Right, and Billboard and iTunes both only look at, care about, and pimp "head content". There is not nearly enough tail content in iTunes to make any real determination as to how it affects sales.

    • Yes, some say the point of the tail is the length. That with proper margins you can even make money off of small volume stuff.

      But more people use long-tails to state that if people could buy off-brand and specialized products as easily as they can buy mainstream stuff, the off-brand stuff would gain a disproportionate boost in sales. That is, big brands have advantages due to inequal distribution in traditional channels.

      Since iTunes is equal access, it should show off-brand stuff selling at higher rates tha
  • The long tail is supposedly the collective worth of the niche markets. It may add up to a lot more than the mainstream market, but I believe the tail is naturally distributed among the smaller, specialized suppliers. iTunes can potentially offer to cater to those niche markets, but would someone go to a popular music service to purchase his unique and less popular music?

    The sum of the unpopular music sold, or niche commodity for that matter, may be larger than the sum of popular music sold. Whether or not t
  • It seems to me that the only time you're going to see an obscure product selling better on the web is when it's on a page that's focused on a niche. This is just because most web sites with a large stock make it hard to find quality niche products. You really have to dig to find gems sometimes; and digging isn't what folks seem to do a lot of on the web unless the product's expensive or the digging is fun to do.

    A music example is electronic dance music. I don't go to iTunes for this stuff, because all th
  • If you don't understand profit, you probably shouldn't write at the Wall Street Journal. Profit = revenue - cost.

    It seems that Mr. Anderson's book (I RTFA, but not the book) claims that higher sales in the tail will increase the profit of the tail and this will change the economics of the web. This doesn't make much sense to me, and the article rightly points out that there is not that much interest in the tail.

    But that's not the point. The point is that to stock "tail items" (niche items) in a brick-and-mortar store COSTS a lot of money. It costs money in terms of the hit-items you can't stock because you've got limited inventory space (opportunity cost at work). But the cost of stocking niche items digitally is far, far less. The promise of profit from the tail is not based on increased revenue as much as it is on decreased cost.

    Take the example of Apple's iTunes sales. Even if they do closely track Billboard sales, this doesn't change the fact that Apple is profiting MORE from their tail items than a brick-and-mortar store would be.

    It seems as though both of these guys are missing the point: the promise of the tail is not in increased revenue, but in decreased cost.

    • I think you're on the right track, but you miss 2 important points.

      First, the additional availability of the niche products in the long tail will help to increase their sales. For example, I bought a book on metaprogramming from Amazon. I'd been looking for that book for a long time, but was never able to find it. Amazon's ability to (virtually) "stock" that niche item was a major factor in me buying it.

      Second, it's not the individual items that matter. It's the sum of the items in the long tail that add up
    • The idea of the long tail is the area under the curve. If he height of the curve represents the amount of money going to any one item, the area under the curve is the total amount of money available. That area is supposed to be more or less constant: people will spend a fixed amount of money on books, music, etc. They may spend a bit less on music if the music itself is cheaper, but in general the assumption is that things will even out so that prices would rise and/or people would buy more music.

      The long
      • The long curve is about shifting the curve so that it's flatter.

        This is incorrect. See the wikipedia article on the topic: []

        The curve represents sales of a type of commodity. Say CDs. The height of the curve is the volume of sales. The curve has a very high "hump" near the left - representing that a few select titles (the hits) make the majority of the sales. The "long tail" doesn't refer to shifting anything, it refers to the narrow part of the graph to the right o
    • The other point of the "long tail" is to allow more people to find employment at home doing what they like doing, or to pick up extra money where it might have been impossible even in mail order. The decreased costs you mention is key. I can set up a web store for a small amount of money, a very tiny fraction of buying retail frontage which couldn't be supported by my product line yet. Even the shelf space in a store might cost more than my web hosting costs.
    • I absolutely agree with you.

      Just think of how many bags of sugar are on store shelves in the hopes of a sale for $0.79. The cost to make a product available to your target market via brick-and-mortar distribution is ridiculous! How many Treo700p units were necessary in order to have them sit on Sprintel shelves across the country? How many of those will be sold before another two generations makes them obsolete?

      The reality is different for digital content. Negligible storage and duplication costs me

    • It seems as though both of these guys are missing the point: the promise of the tail is not in increased revenue, but in decreased cost.

      I don't know about that. I would be more likely to buy books from a brick and mortar bookstore if they have the books that I want (this is ignoring the issue of cost - doesn't discount mass market paperbacks).

      Case in point - I wanted to buy Conventions of War (Dread Empire's Fall) at the bookstore, but they didn't have it. If that book isn't there, the probabil

      • I'm not trying to be rude, but this is exactly the problem I'm talking about. Business decisions are about profit. One of the most prevalent reasons for making bad decisions about business is the failure to think in terms of profit.

        In your case, you are talking about revenue. You point out that if they don't stock enough books, they will loose revenue because you won't by the book. But what you fail to acknowledge is cost. There are at least two types. First of all, they have to pay rent for every squ
  • by Anonymous Coward
    For instance, did he look at the amplification of the hits relative to the niche markets? For instance, if a hit sells 100x as many songs as a niche piece of music before iTunes, and the hit sells 2x as much but the niche sells 50x as much, the hit still has 4x as many sales, but the niche song sold much more than it would have otherwise.
  • missing the point (Score:4, Interesting)

    by blamanj ( 253811 ) on Wednesday July 26, 2006 @03:01PM (#15786148)
    The point of the "long tail" isn't that the sales stop being weighted towards the "hits". You still have a power-law distribution, that doesn't change. The point is that today, the distribution is artificially restricted, because items are dropped from availability. When you extend the number of products available, you make more money from the "tail" products and the portion that came from the original set of hits is smaller.
    • I'm glad somebody pointed that out.

      There's a reason it's called "the long tail" and not "the long club-foot." The tail tapers out -- it's not very big, in terms of sales volume per item. It just goes on for a while (hence, long).

      Right now, the tail is chopped off because of the costs of maintaining a huge physical inventory. It's only economical to keep the stuff in stock which generates a certain number of sales per week, because it costs a significant amount of money to keep it there. Digital distribution
  • Misses the Boat? (Score:4, Insightful)

    by vitaflo ( 20507 ) on Wednesday July 26, 2006 @03:09PM (#15786198) Homepage
    Of course hits are going to continue to outsell the "long tail". I think what the author here misses is that when I buy a "hit" off of let's say Amazon, I may also be buying a long tail item as well. And I may be buying both off of Amazon *because* it lets me buy the long tail item as part of my purchase.

    Stores always want the most selection. If it was all about hits, why stock anything other than the Top 40? Because people want other things as well, even if the Top 40 sells the most. What the long tail does, is makes offering selection much cheaper to the stores.

    Say you have a mom and pop store in a town. They need to take a risk to buy one or two copies of a relatively unknown book or CD. Since they're not buying in bulk they don't get as much of a discount from their distributor. Then they have to hope someone in that area wants to buy it. If not, they're stuck with it because their customer base isn't large enough.

    With an online store, suddenly your potential customer base is millions of people. Many more than the thousand or so that may come into a local store. Now you can order a small bulk order of an obscure item and most likely you will find people who want to buy it, regardless of where they are located.

    In fact, people who find obscure items at your store will probably be more willing to buy other things from your store because you sell the niche items they like. Some of these may even be hits!

    I think this is why the Long Tail is important.
  • So long as mainstream media still publishes flashy ads with peppy backbeats business will still be a primarily hit-driven model. What I understand about the "Long Tail" effect is that niches that are out of the current meme can last forever and pick up sales as trends shift and individual taste develops. A failure is no longer an "indefinite" failure, but can be recalled if and when the consumer chooses to do so, leaving an awfully large window by which one can measure 'success' especially if and when an
  • by Rachel Lucid ( 964267 ) on Wednesday July 26, 2006 @03:12PM (#15786219) Homepage Journal
    Personally? I think the 'long tail' effect is going to be highlighted more in the blogosphere.

    Case In Point:

    Person A likes something really popular at the moment(Say, Pirates of the Caribbean), but also likes some less popular things at a constant rate for a longer period of time (the DS Lite, Gaia Online, Crocs) and some niche things that have a burst of interest for a short time period (Sonata Arctica, Super Princess Peach, Jibbitz)

    Person A blogs about all seven items in a single entry, and most likely spends more time talking about the niche things in total than on the really big popular item. Likewise, while information about PotC is probably easily accessible on Wikipedia or elsewhere, the user may have to seek out (and link to) niche sites for the less popular items, and thus lead her readers to these niche sites as well. The niche sites generate interest for the niche item, and boom, we now have more people wanting the niche.

    It's the rough equivalent about how Shopping Centers usually have an 'anchor' in the form of Wal-Mart or a Bookstore, and then have the specialty shops around it to fill out the real estate. As more people notice themselves doing this with their blogs/LJs/MySpace/whatever, the niche items gain swing and soon gain a sizable portion of the market in this way.

    The internet's main impact on the Long Tail is its ability to piece together far-flung bits of interest in an item, allowing them to congeal into a sizable force. Saleswise, however, the impact is only noticable to internet sellers (or big volume concrete sellers, like department stores), since smaller concrete retailers still find the costs of marketing to a niche prohibitive unless they dive into specialties. However, with the Long Tail, the consumers of these niche items become far more entrenched than before.
  • I would submit that the long tail, in any form, creates false hopes for content creators. Consider the economics of being in a band with 4 members plus a couple of multi-talented support crew (e.g. manager, equipment engineer, lyricist, sound engineer, etc.). Such a group needs to clear $120,000/year after expenses (equipment, vehicles, gas, marketing, etc.) just to stay above the poverty line (20k/person before taxes). That's suggest a gross of $150,000 to $200,000.

    Getting that from iTunes means getting
    • I don't care how incredible your new-paradyme way to distribute music is. If iTunes is charging $0.99 a song to the consumer, a band is not going to get $150,000 from 150,000 sales through iTunes. Far from it.

      While iTunes might have the best business model in the world, they aren't going to do it for free very long. Sure, at some initial point selling music at cost without expenses pushes the iPod into people's pocket. But that only goes so far. Then, reality sets in.

      I think $150,000 income would requi
    • by Kadin2048 ( 468275 ) <slashdot,kadin&xoxy,net> on Wednesday July 26, 2006 @03:41PM (#15786417) Homepage Journal
      I think you're factually correct, but your conclusions are wrong. The long tail doesn't really help content creators who can't develop a large market for their work. Period. You can't make $200,000 a year, if you only sell $100,000 worth of stuff. "New media," or "the long tail," or any other buzzwords are not going to help you. (Creative accounting might, but not for very long.)

      Where I think you're off-base is to somehow imply that the situation that your hypothetical band faces is any worse than the situation they have right now. At least in this model we're discussing, they have the possibility of making a few bucks from their music alone -- perhaps enough to make simply recording music a pleasant hobby, if not a day job. It might be enough for a garage band who previously played only for themselves to justify buying some better equipment, or justify it instead of some other way of spending their free time.

      The band who is not going to make a professional career out of the "long tail" music scene, certainly wouldn't be able to do it in a purely corporate, hit-driven model, where your odds of success are comparable to what you'd find by playing the Lottery (and the effect roughly the same -- for every person who strikes it rich, dozens if not hundreds of other bands go bankrupt).

      If you were a band that could have done well under the old hit model, then you can still do well today; the 'hit effect' still abounds, and by cutting out the middle man, a band today or tomorrow could conceivably make more money selling less songs, but cutting out the labels' overhead.

      Furthermore, in your calculations you're leaving out the band's income due to non-music sales: concert tickets, merchandise, endorsements, etc. Those make up the bulk of a popular band's revenue today, under the studio-centric model, and that probably wouldn't change immediately. People are still going to want to go and see a band they like in person, wear that band's t-shirt, and companies trying too hard to be hip are always going to be willing to pony up dough to artists willing to promote their schwag. It's a mistake to assume that a band's main source of income must come from iTunes. In reality, a smart band would treat the iTunes income as a "bonus," and use it in ways that help to increase their real revenue sources.

      Nobody ever said that being a musician should be easy: that you should be able to just make music and then wait for the money to roll in. Succeeding in that business is like any other, it takes a lot of hard work; under a 'long tail' model, the most successful bands would probably be the ones that stay endlessly on tour, working venues small and large, selling high-markup merchandise, and using their music essentially as an advertising vehicle for self-promotion and to establish a fanbase. If the Internet allows them to derive income from their music directly instead of having to pay radio stations to pay it (as the studios basically used to do), all the better.

    • Let's go back to your assumption of having 12 'good' songs (averaging 8 downloads a week), 24 okay songs (averaging maybe 4 hits a week), and add on another 12 crap songs (maybe 1 download a week). (12 * 8) + (24 * 4) + (12 * 1) = A little over 200 downloads a week.

      That's $200 a week that the band can count on, if they sit on their ass. Now let's assume that they're not.

      Let's toss in that every concert they play, they manage to spike iTunes downloads enough to make an extra $100 each time, with a residual o
    • Lyricist, what? (Score:1, Insightful)

      by eldalonde ( 772750 )
      First of all, as the other poster said, while this situation may suck for a band, it's not really any worse than how it sucks now. Not to mention that playing shows is how most bands make most of their money. Anyway, that's been said already. I take issue with your breakdown of the payout a band gives. Essentially I think you have no idea how small bands that aren't in the mainstream operate. When I read that you would pay a "lyricist", I almost broke out laughing. Outside of manufactured pop bands (who ar
    • An alternative band economics tutorial for a mid-sized band with regional/semi-national touring (from an ex-band member):

      You have 3 members. You have a booking agent (who collects 5% commission on all gigs booked) and otherwise it's all you.

      You play 40 gigs. You make (a fairly liberal) $1,000 a gig. (Some places pay $100. Some places pay $2,500. Most places pay around $1,000. Plus free beer!) $40,000 - your agent's take ($2,000) = $38,000 in concert revenue.

      Your latest CD's production session cost you $30,0
  • by bennomatic ( 691188 ) on Wednesday July 26, 2006 @03:16PM (#15786251) Homepage
    My feeling about the long tail is that it means that books should never go out of print. With self-publishing houses like printing books on demand, there's no reason that I shouldn't be able to print a copy of any book I want, with any kind of binding, etc.

    A couple of years back, I was telling a friend about a great book I had as a kid, called "Who Needs Donuts" by Mark Alan Stamaty. My friend had just had a kid, and I was thinking it would be cool to get a copy for him, but it was long out of print. I shelved the idea for a few months, and then decided to try again, and if that didn't work, scan my old copy, which I had saved, and print a new one. In the intervening months, the book came back for a reprint, 30 years after its first printing.

    My feeling is that it shouldn't have been that much work, and there's no reason the publisher should have to print up a whole multi-thousand book run. The occasional nostalgia buyer would do really well for publishers and authors who have low-volume books.

    So if I want to find old editions of the Book of Knowledge from 1944, where the commentary following the story of "the first men on the moon" indicates that "maybe your children's children's children will walk on the moon", I should be able to.

    In short, no more dark ages. No lost wisdom. No lost idiocy, either.

    • Yep, this is exactly what this about. Technology and the internet make things such as older books and music available because of on-demand-printing, inexpensive storage and transfer.

      Seriously, what does it cost for a book publisher to store an electronic copy of a book and than kick out a single copy when somebody decides they want one?

  • Flawed Argument (Score:5, Interesting)

    by twofidyKidd ( 615722 ) on Wednesday July 26, 2006 @03:33PM (#15786359)
    Citing the iTunes store as representative of anything but a "Hits Business" is flawed. I think consumers who represent the statistics in the long tail don't shop at the iTunes store. While I know it's not a vaild argument to cite what my own purchasing practices are, I for one spend a lot less on music at iTunes and more at places like Om Records [], Defected [], and other independent label online stores. In fact, if I do purchase at iTunes, it's usually a very popular song which is consistent with iTunes being in the "Hits Business". The arguer is right about that, but wrong about who it accurately represents.
  • by ursabear ( 818651 ) on Wednesday July 26, 2006 @04:43PM (#15786770) Homepage Journal
    I think the whole discussion about the long tail is interesting and worthwhile.

    I think the truth between the two discussions (Anderson vs. Gomes) is more likely to be something in the middle, not at one extreme or the other. I don't think hits are going away, and I think hits make their mark on most any marketable thing/meta-thing. With that said, I think that niches are more meaningful and valuable than ever before.

    The book example is great - I get more access to niche publications because of the long tail concept, largely because of funding and popularity of hits. Said a little differently: the niche stuff generally sits alongside the hits, and generally benefit from some of the hits' halos.

    My music isn't hit music. That's OK, it's just stuff made from my soul, and I am not planning to quit my day job. The money made from niche availability on the internet (for me) fund dinners out, an occasional instrument upgrade, or a small household bill or two. Why is the long tail beneficial to me? Because when someone is browsing James Blunt [], they'll often see me on the front page in a promo, and sometimes (well, briefly) listen to my stuff too. Similarly, iTunes/Rhapsody/Emusic/Yahoo! Music/etc. browsers often buy the latest hits, but will splurge on a Jimmy Bear tune or two - how do they find my tunes? Because my niche music is available with the hits, and because searches sometimes come up with one of my funky little musings.

    My point is, that niche stuff isn't taking over the world, and hits aren't all there is. I think the niche markets of the world have been greatly enhanced by Internet access, and that they also benefit from proximity to the hits.
  • First of all, unpublished data doesn't count. Gomes has the privilege of not only analyzing Anderson's data, but of criticizing Anderson's analysis. Anderson has none of that. Nothing to see here - literally!

    Second, iTunes catalog is certainly skewed toward commercial catalogs, and not toward most musicians you'd find appealing to the Long Tail. Given this selection bias, is it any wonder Apple's data doesn't confirm Anderson's analysis?
  • The ironic thing is that this article wasn't on the front page of the WSJ. The article itself is part of the long tail.
  • In Anderson's Wired article, he illustrated his points using Amazon. With it's 1,000,000+ inventory, 52% of their sales were coming from outside their top 150,000 selling titles(IIRC).

    This was a valid insight, as the largest bookstores typically carry 150,000 titles. Anderson revealed that the size of the book market is more than twice as large as what the largest bookstores can carry.

    It was Bezos' decision to launch with 1,000,000 titles that drove this, plus Amazon's own set up, which makes it easy for

  • Here in the UK, I'd say the web has had a massive impact on the way I do shopping, and is starting to affect non-geeks as well.

    The UK is famous for it's "clone towns", i.e. cities where all they have are chain stores and no independants. I live in Portsmouth, which is a prime example.

    Chain stores take all the fun out of shopping. Plus, you can never really get what you want, so I do most of my shopping online. eBay and independent web sites are fantastic for this. And it's starting to cross over to normal p

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