Jul. 16th, 2006

The Long Tail

The ether is buzzing with coverage of Wired editor Chris Anderson’s "The Long Tail".

"[The Long Tail is] an example of
an entirely new economic model for the media and entertainment
industries, one that is just beginning to show its power. Unlimited
selection is revealing truths about what consumers want and how they
want to get it in service after service, from DVDs at Netflix to music
videos on Yahoo! Launch to songs in the iTunes Music Store and
Rhapsody. People are going deep into the catalog, down the long, long
list of available titles, far past what’s available at Blockbuster
Video, Tower Records, and Barnes & Noble. And the more they find,
the more they like. As they wander further from the beaten path, they
discover their taste is not as mainstream as they thought (or as they
had been led to believe by marketing, a lack of alternatives, and a
hit-driven culture).

"…If the
20th- century entertainment industry was about hits, the 21st will be
equally about misses."

"For too long we’ve been suffering the tyranny of
lowest-common-denominator fare, subjected to brain-dead summer
blockbusters and manufactured pop. Why? Economics. Many of our
assumptions about popular taste are actually artifacts of poor
supply-and-demand matching – a market response to inefficient

The Internet offers unlimited shelf space and virtually frictionless distribution, allowing business to make hits out of misses, giving the re-run industry an entirely fresh lease.

Although his examples are drawn from the entertainment industry, it appears to us that many other businesses will benefit from the explosion of demand further down the demand curve.

Take for instance computer storage. Companies like Isilon Systems (a Mortar client) provide customers with relatively limitless capacity for storing digital content — like movies, music, books, pdf documents, photos, and large images — and are well positioned to benefit from demand for systems designed to ease the storage and retrieval of data.

And as corporations store more and more data, they will feed an expanding tail of demand from users; and evergreen demand for Isilon.

Each of us too is contributing to the Tail.

Every photo we take, document we create, video uploaded or song downloaded has to go somewhere. I know I’m not the first to save several generations of video players just so I can be sure I’ll be able to play back old tapes.

Each action fuels demand for aging content and systems. And the efficiency of the Internet in aggregating the interests of small numbers of widely dispersed users ensures the continued (and profitable) existence of the means to access, store, retrieve and edit content even long after the originators have crumbled into ashes.

Now the long tail seems to be everywhere.

What is this blog if it isn’t a classic Long Tail business?  With every post I am marking my trail on the web and giving those close to me one more reason to dig up my words at some future date. (As my friend  at SixApart chuckled this weekend, "Blogging really is like crack. Once you’re hooked. You’re hooked").

And as we pointed out in the recent post about HP’s new campaign "The Computer is Personal Again,"  the insight that our legacies are increasingly captured digitally has inspired a new line of laptops and, in turn, a different way of thinking about personal computing.

We are not the first to grapple with the long reach of the long tail.

As Nathaniel points out on his blog, the development of the railroads across the continential US was an early (but certainly no less disruptive) example of Anderson’s  theory:

"In the mid-1800’s, America was almost two separate nations—one on
the east coast, and one on the west coast, separated by rugged, untamed
land. California had been growing steadily, and then the gold rush hit,
and all of the sudden it wasn’t growing anymore—it was exploding.
Various businessmen saw the huge potential of connecting the east and
the west overland, largely to make it easier to trade between the two,
and they eventually convinced the government to finance a great
race… In 1869, the two tracks were
connected at Promontory Summit, Utah, and the first Transcontinental
Railroad (in the world, actually) was completed."

the railroad did a lot more than just allow easier trade between east
and west: it also opened up the interior to a level of settlement not
previously possible. Points inland that would’ve previously taken weeks
or months to reach by wagon suddenly became accessible to those who
weren’t interested in being completely isolated from civilization…"

"The transcontinental railroad was to the real estate of inland America as iTunes
is to the music marketplace of today. It enabled people to move away
from the “hits” of the coasts to the “long tail” of the interior, and
many jumped at the opportunity. The middle of the country exploded with
growth, which while far from being painless still allowed many who
never could have imagined owning land or being a business owner to do
just that."  Blog.Talbott.WS

That’s always the way with great business books. Look around. The Long Tail is suddenly everywhere.

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