The Sometimes Fallacy of The Long Tail 113
There's been a lot of talk (maybe too much talk, to paraphrase Bono) about The Long Tail and how it changes everything about what people consume, how hits are made, what people want to hear, how everything big is small again -- but people have taken that perhaps too far as Lee Gomes contends in a recent blog post about hits. Lee's piece is well thought-out, and I think raises a very valid point that whereas there is value in the Long Tail idea, sometimes people take it too far and that "Hits" still count for a lot. His earlier piece is a more direct critique of The Long Tail and worth reading as well; we covered that piece about the Long Tail a couple weeks back.
Is this news? (Score:5, Informative)
Bad news for hype-driven marketing and economics people, but Pareto got it right in 1897!
Re:Is this news? (Score:5, Interesting)
That means of course that the remaining 99.2% of the inventory generate 70% of the rentals. If they "got rid" of this catalog they would lose a lot of customers.
Of course the data is very coarse, as Spider-Man II happens to fall into the 99.2% category. They need to start analyzing in terms of percentiles; 0.8% generates 30%, 1.5% generates 40%, 8% generates 50%, 17% generates 60%, 42% generates 70%, 78% generates 80%, etc, all the way up to 100% of the rentals.
Re:Is this news? (Score:3, Informative)
Using this we can estimate, that the first 50 items are good
Re:Is this news? (Score:2)
Oh, I didn't know they had Gigli.
Re:Is this news? (Score:3, Interesting)
It's the 'new hits' that are expensive to maintain in a catalog like Netflix's; the 'long tail' is cheap.
Really the economic consideration is "do I have to have Spiderman II in order to stay in business?" And it would appear that the answer, for now, is a resounding "yes."
The reason that the hits are expensive is because each one is like a pig going through a python. For the first week that a big hit movie is out, re
Re:Is this news? (Score:1)
Re:Is this news? (Score:2)
They sell them for 7 bucks a pop to their renters for a big fat profit.
Re:Is this news? (Score:2)
Yes, they'd lose a lot of customers - but they'd also no longer need as much warehouse space, less labor, fewer handling/sorting machines, etc... etc... The loss in revenue would be balanced by lower costs. It's a pretty complex
Re:Is this news? (Score:3, Insightful)
And I'd argue that the very vastness of their selection is a major part of what makes people subscribe to them. The loss in customers can easily outweigh the savings of cutting their selection.
While 90% of their traffic may come from 10% of their stock, part of their att
Re:Is this news? (Score:3, Interesting)
It's great news for them. It means that if they build up enough hype, whatever they are selling will become part of the 20% of products that generates 80% of sales.
Anyways, the long tail is only relevant to the brick and mortar world if the store owner can afford to keep lots of slow selling product in stock.
This may not be news, but I won't listen (Score:1)
And hence why so many people want to download music they do want to hear.
More than 80 percent of the top 20 playlist I hear is total carp.
Re:Is this news? (Score:2)
Used bookstores have been doing this for decades. Contrary to what seems to be the popular opinion on Slashdot - not everything in a brick-and-mortar store needs to sell quickly, so long as *on average* you sell enough to meet costs and provide profit. Even if all of your stock is slow moving, you can still run a brick-and-mortar store as a 'pipeline'. So lo
Re:Is this news? (Score:2)
Re:Is this news? (Score:2, Informative)
Re:Is this news? (Score:2)
I prefer Sturgeon's corollary: (Score:2)
Bono (Score:4, Funny)
Re:Bono (Score:3, Funny)
Wrong Bono [wikipedia.org], Sonny. [wikipedia.org]
You believe Wikipedia!? (Score:5, Funny)
Re:You believe Wikipedia!? (Score:1)
I have corrected the article to match your comments. The U2s are one of my favorite American rock bands.
U2's from America? (Score:3, Funny)
Re:U2's from America? (Score:1)
Re:U2's from America? (Score:2)
Re:You believe Wikipedia!? (Score:2)
The problem with your assertion is that the number of people who know nothing, or who "think" they know something, vastly outnumbers those who actually do.
Re:Bono (Score:2)
Re:Bono (Score:1, Funny)
it that counts. What's that Gnasher?
Woof!
Re:Bono (Score:2, Funny)
I was pro bono until I got sucked into the lucrative practice of defending drug smugglers.
Re:Bono (Score:1)
I've never been pro bono. I want to get paid for the work I do.
Re:This is a trick... (Score:2)
Talk about IRONY (Score:5, Funny)
Re:Talk about IRONY (Score:2)
So ultimately it's evidence for his theory, not against it.
Re:Talk about IRONY (Score:2, Funny)
Re:Talk about IRONY (Score:3, Interesting)
Re:Talk about IRONY (Score:2)
Hit's don't go away, of course (Score:5, Insightful)
Where in a brick and mortar store, which suffers from space constraints so the ROI for any give stock has to be fairly high, the internet shines because the space constraints are looser and therefore the ROI for any given stock can be less and STILL be profitable.
If a Tower Records can only carry the top 10% of goods to be profitable, Tower Online can afford to carry the top 20% of goods and still be profitable. The top 10% will still sell, as always, but the next 10% may contribute up to 30% of the profits despite only being in the second percentile.
As efficiency increases, then each percentile after that becomes "more" profitable, relatively. If Best Buy online can afford to carry the top 30% and remain profitable, with the third percentile adding 11% of the profit and the second percentile adding 25% of the profit, they will sell more, necessarily, than Tower.
So all things being equal, the store with more inventory can sell more. The store with greater efficiency can afford to carry more.
Re:Hit's don't go away, of course (Score:3, Informative)
Re:Hit's don't go away, of course (Score:5, Informative)
The problem with the online world is the "favored" positions are incredibly small. Additionally, having a larger catalog just means that when someone searches for something they are bombarded with many, many more possibilities. This actually deters people from making any choice at all. So, in a somewhat counter-intuitive way, having more potential choices reduces overall sales.
There are some that can say that everything that is known about consumer marketing is utterly false in an online environment. So far, the results are mixed from what I have heard. We are certainly not seeing the sort of abandonment of B&M stores that was touted as "just around the corner" in the late 1990's. That might happen - or it might not - but it is likely to take at least a generation before it does. Old people, even those using the Internet, are very unlikely to abandon shopping habits formed over decades.
This means that for the short term, most of this "long tail" stuff is nonsense.
Re:Hit's don't go away, of course (Score:2)
Google, for example, is a solution to the problem of "favored" position. Rather, search is the answer. Instead of wandering around Target's Home, Beauty, Electronics, and Appliances sections looking for an electric razor (guess where I found it!), I just type in "razor" at Target.com and
Re:Hit's don't go away, of course (Score:1)
I think the "favored position" can be a very difficult thing to put a finger on when we're talking about marketing on the web.
Sites like Amazon keep track of what I've looked at recently and what I've purchased in the past and make an educated guess of what they should put in the "favored position" for me. If their system makes a good guess, it could recommend something that only 1% of the population likes, but it may be just what I want. There is nothing quite like this in B&M stores.
And then it
Re:Hit's don't go away, of course (Score:2)
Never heard of a Bloomingdales personal shopper eh? (Which just refines the point - the marginal cost of doing that kind of personalization is high, and thus requires a high profit. Bloomingdales can afford to do so...and still makes a killing)
Re:Hit's don't go away, of course (Score:1)
Heard of? Yes... but I don't know anything about them. I don't think I've ever been in a Bloomingdales. (I've heard they have some in the Chicago area, but I have no idea where.)
So let me rephrase... This is prohibitively expensive for the vast majority of B&M stores.
Re:Hit's don't go away, of course (Score:2)
The Internet's low barrier to entry means that the sheer volume of total supply has increased dramatically. Before the Internet, there was a large section of demand for obscure and otherwise "non-hit" material that could not be met by traditional brick and mortar stores. Now these needs can be met, without sacrificing any
Re:Hit's don't go away, of course (Score:2, Interesting)
Layne
Re:Hit's don't go away, of course (Score:2)
There's more than one model in the brick-and-mortar world.
If you can keep ROI high on faster moving items, you can balance them with lower ROI items. (Used and rare bookstores have been following this model for decades.) Big Box Retail uses the model you state - because their costs are high (from having to locate near malls and high traffic areas), the competition is fierc
the long tail isn't an amazing concept (Score:5, Interesting)
that's it
it's not like the internet is going to come along and change simple human psychology:
1. the internet is not going to make less people behave in herds
2. the internet isn't going to make more people behave independently
take an old concept, spruce it up with a buzzword, and people think gold has just been discovered. pffft
perhaps the most ironic thing about the idea of the long tail is that the concept itself is now a mass media driven success story with a herd-like following
"fear of offending the flock" (Score:2)
being emotionally pegged to the reactions of the flock, whether positively OR negatively (fear/ anger/ hate/ disgust), means you aren't truly independent of the flock
Re:"fear of offending the flock" (Score:2, Interesting)
Re:"fear of offending the flock" (Score:2)
Re:the long tail isn't an amazing concept (Score:2)
2. the internet isn't going to make more people behave independently
No, but the internet can enable you to control those herds. I can't remember the exact term, but I marketing and PR gurus often targets the social "herd leaders" in viral marketing to be more efficient.
Re:the long tail isn't an amazing concept (Score:2)
Re:the long tail isn't an amazing concept (Score:2)
I actually think you're completely wrong and the Internet (or something like it) could do exactly that. Now I'm certainly not denying the power of group think or the culture of cool, yet ultimately we're all individuals regardless of how homogenized our retail masters might wish us to be.
you're crazy (Score:2)
in 1850, if someone had a hit song in new york city, you can bet san francisco wouldn't know about it. heck, if someone had a hit song in one neighborhood of new york city another neighborhood a mile away might never hear it
now? madonna has a hit song on the charts in london at the same time in tokyo and new york city. talk about bigger herds!
same with the printing press, same with movies, same with the tv
in
Re:you're crazy (Score:2)
On this we completely agree. My point is that technology once forced societies to get information from a (very) limited number of sources, and I would purport that this merely fed into the herd mentality. However, the number of information sources has been increasing exponentially. Getting the word out is easier than ever, but getting everyone to hear your message is more difficult today than ever bef
You need the whole tail... (Score:4, Funny)
Re:You need the whole tail... (Score:2)
A lot of people are just not getting this. You can make a certain amount of money selling the top hits and your business can be profitable in the current market. If you carry less popular content as well, it will sell more poorly, per title. If it costs you a significant amount per title, then this is poor business. The issue
Re:You need the whole tail... (Score:2)
So what does this imply to the blogosphere? (Score:5, Funny)
Re:So what does this imply to the blogosphere? (Score:1)
I so would have Digged that comment... (Score:2)
(P.S. Overly-zealous mods: please excuse the mention of Digg, its to make a joke.)
Re:I so would have Digged that comment... (Score:1)
Re:So what does this imply to the blogosphere? (Score:2)
(Secret message within.)
We lose money on every transaction - (Score:2)
(Web 2.0 my ass)
Although I actually did work for a web company that was cash-flow-positive, once. Then they got sold to VC's and had to stop making money.
I am confused (Score:2)
what does the 'u' in BuG FoG stand for?
Re:I am confused (Score:1)
Re:Skew the curve (Score:1)
Yeah I know. It doesn't really. Just like "long tail". The problem with the long tail is it gets caught in the door or you can't keep it under your robe.
Cowardly Lion
I recognize the words (Score:2)
Area under the curve matters, not tail length (Score:5, Interesting)
If anyone talks about the "long tail", ask them if they know how to integrate the area under the curve. The simplest number for evaluation purposes is the value for which half the area under the curve is before that point, and half is after. What's that number for movies? For books? For audio CDs? For iPod downloads?
Netflix says that 30% of rentals are from the top 50 films, so the halfway point is probably below 100.
This is a killer issue for companies that have huge hardware inventories. Consider Digi-Key [digikey.com]. They have the broadest inventory of electronic parts in the industry, with over 70,000 parts. Which is a big win for them, because you can usually use them as your only supplier. So there's an Internet-based company that really does profit from the "long tail".
Digi-Key doesn't get much attention as an Internet company, but they're one of the most successful ones. They had online ordering early, and it works really well. Not just the web front end, which looks boring but has what users need, like the ability to search by component parameters. They have a near-complete collection of online data sheets. When a part you've ordered previously is about to be discontinued, you get an e-mail, so you can order a final supply before it goes away. And they have an incredibly effective order fulfillment operation. Orders entered before 7 PM (yes, PM) Central time ship the same day by FedEx. They actually do that, consistently. When you order from DigiKey, you get a confirmation e-mail when the order goes in, and another when it ships, with the FedEx tracking info. The shipping confirmation often comes in within fifteen minutes of placing the order. Now that's operating on Internet time. And that's for orders which might contain twenty different electronics parts in small quantities.
That's a real "long tail" company.
Re:Area under the curve matters, not tail length (Score:2)
Sure, the simplest number for stupid marketing and BS babble is something arbitrary like the 50th sales percentile. The simplest number for evaluation purposes is not the 50th percentile of sales, but rather the point on the curve at which holding the inventory becomes unprofitable.
E.g., one can compare meaningless figures, or one can evaluate meaningful figures.
Re:Area under the curve matters, not tail length (Score:2)
Sorry - but I call bullshit. Digi-key's model long predates the internet - and isn't exactly uncommon among dealers in bulk commodity parts.
Re:Area under the curve matters, not tail length (Score:2)
Digi-Key has pushed up the level of service expected in the electronics parts industry. Before Digi-Key, you placed an order, waited days or weeks, and got back 60-80% of what you ordered, plus back order notices. Most of the electronics resellers didn't really stock everything in their catalogs; they'd order from suppliers on many items. Digi-Key really does stock everything they say they stock, and you can check before ordering how many they have on hand. Sometimes they're out, and they say so.
Tha
Re:Area under the curve matters, not tail length (Score:2)
Re:Area under the curve matters, not tail length (Score:1)
Re:Area under the curve matters, not tail length (Score:2)
What I'd really like, in both cases, is a search-for-similar or a one-up kind of search system. If I enter a part number that's discontinued or wrong, it'll show me similar part numbers and let me get into the parametric search screens from that point. Maybe it's possible, but all I've ever managed is to find the exact part number, click on it, and go to the exact part number de
DigiKey rocks (Score:2)
All their electronic components have to be trucked into Thief River Falls, sorted, counted, catagorized, and stored. Then the orders come in: 32 of a73907-30948-30, 2 of 39047038-alkd39-08, 1 of 90892938-dkfjk-29, etc...
Thousands of orders, every day.
I can't belie
Do I Understand This? (Score:5, Insightful)
1. Mass media enables mass marketing.
2. Mass marketing leads companies to target "the sweet spot."
3. This pays off, and so reinforces the idea.
4. Companies become more and more focused on the center of the market.
5. The tails become under-served, the center gets over-served.
6. White Stripes, Pulp Fiction, Clerks, et al. do it for the artistic vision.
7. Hungry tails turn White Stripes et al. into overnight sensations.
8. Meanwhile, companies continue to pump the center.
9. Overfed center can't consume all the mass-market product.
10. Idiot misinterprets this as the the curve flattening, rather than companies over-serving one market and under-serving another.
11. Idiot publishes a pop-business book, which appeals to the mass of idiots that make up the heart of the market.
12. Some companies buy it, and rush out to the tails.
13. Some of these get burned, and so they backlash against Idiot.
14. Gomes writes a backlash piece.
15. With any luck, we can get the companies to rush back to the center, and start all over again - feeding the economic market for half-witted business books. (not casting aspursions at all business books, many of which are good, just the ones that are the business equivalent of Dr. Phil)
All the while, the market hasn't changed at all. It's a bell curve, same as it ever was. Gomes isn't so much sharp, as just not quite as idiotic as the heart of the pop-business market.
People really have a problem with subtle points (Score:5, Insightful)
The aspect of the "long tail" argument that I think makes sense is not that there will no more hits. In fact, the entire Long Tail argument is really predicated from the get-go that the popularity distribution will remain the same, albeit possibly with a scaled-down top end. (But even a hit that is 25% of the best hit of today would still be a big hit.) The point is that there is an untapped "long tail" that it is now possible to reach economically. The tail has always been there, but it has been difficult to make serving it work economically.
There will still be people who deal only in hits, it's just that there will also be people who deal only in the tail, and the latter may become very large, too, perhaps even Amazon-sized, whereas before this was essentially impossible.
Converting this into a "THERE WILL BE NO MORE HITS (BAD!), ONLY THE LONG TAIL (GOOD!)" is really missing the point entirely, and arguing against that is arguing against a strawman as far as I am concerned. (Of course, arguing against a person who is actually saying that means isn't a strawman.) The ratio may change, in fact I think it will change, but due to network effects, there will always be bona-fide hits.
Re:People really have a problem with subtle points (Score:2)
By "people in general," of course, you mean people not in the long tail, right? The long tail people get the subtlety, it's just that it seems as time goes on that the long-tail-of-those-who-get-subtle-points (LTOTWGSP) is becoming a short stubby tail.
Either th
Re:People really have a problem with subtle points (Score:2)
I agree. Ultimately, this is why I think the "Long Tail" stuff is more sociology than business plan; starting a business with the express purpose of serving the Long Tail is still setting yourself up for failure. What will happen is that Amazon will use the power of the Internet and computers to eat your space, and you won't have the resource to fight them or do any better.
It's good sociology, and it's worth thinking and talking about, bu
Re:People really have a problem with subtle points (Score:2)
The long tail exists but what does that mean? (Score:1)
Price will drive the long tail (Score:4, Insightful)
But when unpopular songs only cost $.05, as opposed to $.99 for the "hits", there will be a lot of people who suddenly are driven, by price, to investigate, and (gasp) might even like, "unpopular" songs.
Even in the record stores, when I used to shop at them, I was always very glad of my affinity for classical music. My music was always in the bargain bin.
Of course all of this is up against the fact that much music, especially the "hits", are available for free on P2P networks.
Steve
Classical music... (Score:2)
Troll (Score:2)
Are you a rude prick, or do you just play one when posting anonymously on the Internet?
Steve
The long tail and eMusic (Score:5, Interesting)
Re:The long tail and eMusic (Score:3)
One long-tail-interesting aspect of eMusic is that the front page (the "browse" page) isn't smothered in the latest top-ten commercial chart-climbers... rather, the front page is covered in a mixture of artists and genres. eMusic can be pretty picky about what music they accept, and it shows... often as not, the music is excellent and worth a listen. iTunes' "front page" tends to be mostly chart-climbing-commercial music (not necessarily a bad thing, just an observation - lots of f
Choice and Overhead (Score:3, Interesting)
Promotion on the internet may best come from "word-of-mouth" sources, where hot links of the week propogate through blogs and link-lists and such. The SNL rap-spoof [wikipedia.org] is just such an example from earlier this year. Every past popular web meme [wikipedia.org] is just such an example. I think podcasts(audio & video) are underrated, since the future of web may be to "leave the chair" and use portables to continue the experience.
Perhaps in the future a portal will present a Busker-style downloadable playlist of music, completely copyright free "for personal use and sharing" - and then simply ask for donations that go directly to the artist. Popularity and payment mixed into one. For the large portion of music history, this is how such performance careers worked anyway. Then at least a band could make use of the File Sharing networks as a promotion layer, rather than constantly having them viewed as evil.
Like the Long Tail purports, lowest overhead can make the most profit from the smaller market segments. I cannot see a lower operating margin than online distribution from the artists themselves. The sacrifice is promotion: Labels fight hard for airtime, shelf space, billboard pasteup and DJ chatter. There is a strong argument that "the music world is full of crap and the public wants someone to cull the list for them." But perhaps if these concepts of web meme, genre/artist linking and a modern payment system all converge, things will change.
Thanks for the enlightenment (Score:2)
Long tail rejectionists: The integral from zero to just above the median is more than 50%!
Will we ever know who is to triumph?!?!
examples given are dirty (Score:2)
Medical genetics research all about the long tail (Score:1)
We tend to focus on the cluster of cases (which either is the long tail itself of a distribution curve), or controls (the middle of the curve where most people are).
So, from our viewpoint, the "long tail" is more interesting than the "bump in the snake".
From the study of the extremes, we derive knowledge that lets us treat the people in the middle.
Then further study allows us to fine tune that.
Um...what in heaven's name is this... (Score:2)
new economic theory (Score:1)