Friday, October 15, 2010

Book Review - THE LONG TAIL by Chris Anderson

Off topic, perhaps, but still interesting to me...

Right before I read THE PIXAR TOUCH, I read this book by the editor of WIRED magazine, Chris Anderson. It's title is THE LONG TAIL: WHY THE FUTURE OF BUSINESS IS SELLING LESS OF MORE, and it deals a lot with online retailers such as eBay, Amazon, Lulu, iTunes and Rhapsody, as well as with the blogging industry such as it is. Anderson examines how it becomes profitable to offer consumers more choice, beyond the culture of "hits", as it were - hit TV shows, hit motion pictures, hit songs, and hit books.

I found it interesting that this "fringe", consisting of mostly "niche" products and works, is providing a significant portion of the sales and profits from most of these online businesses. These are the products that the big box retailers, the big record labels, the big publishing houses, do not care to carry, simply because it makes no sense for them to do so. There's limited capacity. Limited shelf space. Limited screens to show films on. Understandably those sellers and publishers and labels and such want to spend their time, resources and space on the big ticket, big money making items. The hits.

The hits are the "short head" of the market, the part where relatively few products account for most of the sales. The "long tail", by contrast, is the part of the market extending out past the first 100, the first 500, the first 1000 maybe, works. So while a conventional retailer must figure in the costs of having an item physically present, a "long tail" retailer can stock larger and larger numbers of works. Songs, to Rhapsody and iTunes, take up just a small part of the digital storage available. Amazon can store ten times, maybe more than that, the number of books that your friendly Borders brick-and-mortar store can stock. eBay does it even more differently - they don't have anything to do with the merchandise. The author also mentions Alibris, a network of used bookstores that, like eBay, simply aggregates the information about merchandise located all over the United States.

One thing that struck me (and other Amazon reviewers too) is that most of the examples Anderson gives are from entertainment product fields. eBay is not stricty that, but other than media, I don't know how this would work. A "long tail" is possible where the means of production have become cheap, where almost anyone can record their music, write and publish their book, even make a film. But perishable products certainly do not fit the model as well, nor do products that take specialized manufacturing. There aren't a million people out there making, oh, say, plastic buckets. Or car parts. Etc etc.

I consider this post to be off topic, but I think there are some tie-ins with Disney and Pixar. Disney may well have been sort of a part of a "long tail" back in the early 1900's when they were making animated films and struggling financially. Back then there was no internet of course, but movie houses were different - they were almost like social gathering places. Not like multiplexes today. There were places to put Disney products in almost every small town in America. Of course, today, Disney is part of that "short head", wanting copyright protection extended on everything they do to protect their investments. (As they should.) But back then, they were making films that, really, they didn't know if there was a market for them.

And Pixar, well, there is a classic example of the production technolgy being used for something that no one exactly knew what would come of it. The idea of making a feature animated film with only the computer was far-fetched back then. The tools of production found their way to the dreamers. Much like independent filmmakers today can make films on a shoestring. (I heard about a new film about a sports talk show guy, something like Nice Guy Billy or something like that, made on a budget of 25K, and it will not be released in theaters - it is going right to NetFlix, iTunes, On Demand platforms, and of course DVD. The director talked about how he had a camera and film editing tools, and was able to make the picture so inexpensively. Classic long tail - a film that otherwise would be seen by virtually no one outside of a major city with an art film theater will now be ONLY available through these long-tail types of outlets.)

I keep thinking about how the long tail relates to my own entrepreneurial ambitions, but I'm coming up dry so far. I'll keep thinking on it though. In the meantime, this book is a worthwhile addition to my (and maybe to your) library. A quick read and full of interesting theories and information.


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