Does the Long Tail grow the pie or simply slice it differently? In other words, as the number of available products grows many-fold with the infinite shelf space of virtual retailers, does it encourage people to buy more stuff or just less popular stuff? Several readers have written to ask about this, some arguing that at most the Long Tail will shift demand because consumers don’t have extra time to consume more content and they don’t have extra money to pay for it.
I've touched on this some in the economics of abundance
discussion, in particular noting that scarcity of human attention is
indeed a limiting factor in demand. But in general, the answer depends
on the sector: some do seem to have huge opportunities for growth as
their niches become widely available and some do not.
Although human attention and spending power are finite, you can get more for your time and money. Some forms of entertainment, such as music, are "non-rivalrous" for attention, which is to say you can consume them while you're doing something else. For instance, some explanations of the rise of average hours of TV watching in the 70s and 80s were because a generation had grown up used to television on in the background of their lives; as the novelty wore off it went from a rivalrous to a non-rivalrous medium, and thus we consumed more of it.
Other media, such as text, can be consumed more efficiently and with
higher quality through better pre-selection. Indeed, it’s quite extraordinary how much
able to increase our consumption bandwidth of information,
speed-reading pages of Google search results and custom RSS feeds.
I may not read any more words than I once did, but they're more likely
to be meaningful to me, thanks to much better filters
(better at suiting my own interests than, say, the editors of the New
pre-selecting what I do read. So because the words are more relevant,
my meaningful bandwidth has increased; I have, in a sense, compressed
But once you combine the scarcity of disposable income with the
scarcity of time, some non-rivalrous media may become rivalrous.
The reason people have the television on in the background is because
it doesn't cost them anything to do so. But if that were pay-per-view
video, you can bet it would suddenly have become the center of their
attention. This then favors all-you-can eat subscription services in
the Long Tail stakes. You're likely to consume more if it doesn't cost you more to do so.
So, bottom line: human attention is more expandable than money. The primary effect of the Long Tail is to shift our taste towards niches, but to the extent we're more satisfied by what we're finding, we may well consume more of it. We just won't necessarily pay a lot more for the privilege. I hope that doesn't screw up anyone's business model.