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July 25, 2006

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» Give Me a Long Tail from bizsolutionsplus
If you haven't read The Long Tail by Chris Anderson, don't wait any longer. The book may scare you, as it turns supply and demand economics on its head and makes us look at the way we do business in a brand new way. But it should also excite you, as Lo... [Read More]

» How large is the long tail? from Rough Type: Nicholas Carr's Blog
In his column in the Wall Street Journal today, Lee Gomes tries to debunk Chris Anderson's Long Tail theory, and on his Long Tail blog today, Anderson tries to debunk Gomes's debunking. It's an interesting - and important - debate, and I find myself ag... [Read More]

» How large is the long tail? from Rough Type: Nicholas Carr's Blog
In his column in the Wall Street Journal today, Lee Gomes tries to debunk Chris Anderson's Long Tail theory, and on his Long Tail blog today, Anderson tries to debunk Gomes's debunking. It's an interesting - and important - debate, and I find myself ag... [Read More]

» 'Long Tail' Big Load? from Gawker
Running Mischa Barton's nipple a close second for most overexposed item on the Internet, Wired editor Chris Anderson's The Long... [Read More]

» TAIL'S ON FIRE from The Common Scold
Chris Anderson's The Long Tail is blazing onto the best seller lists and blogs.... but not everybody agrees with his premises. Alan Rothman noticed Lee Gomes' Portals column on B1 of The Wall Street Journal today, with a view that is distinctly counter... [Read More]

» How Long is the Long Tail? from IP Democracy
A thought-provoking debate has cropped up in the blogosphere today, and no matter which side youre on, its an overdue airing of the by-now accepted wisdom of the long tail. Wired magazines Chris Anderson has a top-selling book R... [Read More]

» Long Tail Imbroglio from Three Sources
Or maybe it's a full contretemps. Lee Gomes of the Wall Street Journal questions the data and the premise of the book. It would be wonderful if the world as Mr. Anderson describes it were true: one where "healthy niche... [Read More]

» Truthiness of The Long Tail from Precipice
Wall Street Journal online puts some stats on The Long Tail and claims its mostly bunk. Just a taste: By Mr. Andersons calculation, 25% of Amazons sales are from its tail, as they involve books you cant find at a traditional... [Read More]

» Understanding The Long Tail from The University of Chicago Law School Faculty Blog
Lee Gomes’s Wall Street Journal column today discusses Chris Anderson’s new book The Long Tail. I should say up front I liked the book: it makes a serious point but remains quite accessible. Perfect beach reading. Gomes’s column suggests that [Read More]

» Tweaking the long tail.... from Guardian Unlimited: Technology
Chris Anderson's book The Long Tail has been a phenomenal success, hitting the top spot on Amazon, so it's hardly surprising that there have also been negative reactions. The Wall Street Journal has just taken a potshot, and has... [Read More]

» Top 5 Blogosphere Smackdowns from Marketing Nirvāna -- by Mario Sundar
Where would television be today without Reality TV? Where would the blogosphere be today without web celebrity smackdowns? Without further ado, I give you, the Top 5 Web Celebrity Smackdowns in 2006 (ranked in order of TechMeme link popularity). Enjoy!... [Read More]

» Lee Gomes responds to Chris Anderson from Rough Type: Nicholas Carr's Blog
Late yesterday, in an email exchange, I asked Lee Gomes what he thought of Chris Anderson's response to his Wall Street Journal column. (Which I discussed here.) In particular, I wanted to know whether he thought (as I do) that Anderson made a valid po... [Read More]

» Lee Gomes responds to Chris Anderson from Rough Type: Nicholas Carr's Blog
Late yesterday, in an email exchange, I asked Lee Gomes what he thought of Chris Anderson's response to his Wall Street Journal column on the Long Tail. (Which I discussed here.) In particular, I wanted to know whether he thought (as I do) that Anderso... [Read More]

» The Long Tale? from Joe Wikert's Book Publisher, Author and Online Publishing Blog
In this article in The Wall Street Journal, Lee Gomes kicks the tires on Chris Anderson’s claims in the recently published The Long Tail. It’s a bit disappointing that Anderson is backing off the “98 percent rule”, but what’s particularly [Read More]

» Long Tail Lashing from IPcentral Weblog
WSJ's Lee Gomes scoffs a bit at Chris Anderson's Long Tail theories. Anderson answers. Nicholas Carr referees, and Gomes continues the discussion. And Laurence Timms lists the others who are piling into the fray.... [Read More]

» Is the Long Tail as Great as We Think it is? from Search Engine Guide Blog
There's a thought-provoking article over at the Wall Street Journal (subscription required) that takes a pretty tough look at the online reality of the theories espoused in Chris Anderson's mega-hit "The Long Tail." The article features author Lee Gome... [Read More]

» Has the Long Tail Been Cropped? from ReveNews - Brad Waller
Lee Gomes of the Wall Street Journal has written an article where he does his best to debunk much of the "Long Tail" cencept coined by Chris Anderson in his new best seller, "The Long Tail." When I read the... [Read More]

» Is the Long Tail as Great as We Think it is? from Search Engine Guide Blog
There's a thought-provoking article over at the Wall Street Journal (subscription required) that takes a pretty tough look at the online reality of the theories espoused in Chris Anderson's mega-hit "The Long Tail." The article features author Lee Gome... [Read More]

» Long Tail Debate Exposes Those in Need of Brand Deflation from Brand Destruction Research
I want you to know that I'm not all about brand destruction. I think some icons just need a bit of deflating and I'm very happy to see that debates surrounding Chris Anderson's provocative project The Long Tail are exposing [Read More]

» Much Ado about Long Tale from albinoalbinism
valleywagによればLong Taleについての騒ぎは現在こういう状態になっているらしい(最後のビデオはよく分からん)。 Heres whats happening today in the world of the Long Tail (Wired editor Chris Anderson&#... [Read More]

» Why Companies Can't Profit from the Long Tail from The Intuitive Life Business Blog
As a long-time evangelist for findability, the rise of search engines as a fundamental change in how we consume information, and the inherent implication that as the Internet grows you'll be able to find more and more obscure information online, I have... [Read More]

» Long Tail backlash...or whiplash? from Spoutblog: technology & web
It was inevitable. Someone, somewhere, had to give Chris Anderson a hard time... [Read More]

» The truth about the long tail from Search Trends
The truth about the long tail is that it certainly does exist and will continue to grow--perhaps more quickly in some industries like music, movies and other media--as more and more people realize the breadth of what\'s available online. This is an imp... [Read More]

» Day of the Long Tail Movie from WebMetricsGuru
The Long Tail book has now been spoofed as a short YouTube online video. Mickeleh's Take blog has an excellent recap of the movie spoof. In true Hollywood fashion, this movie is not an adaptation of Chris's book or the... [Read More]

» Debating the Long Tail from The Fire Ant Gazette
Some folks sure take their economic theories seriously. [Read More]

» Debating the Long Tail from The Fire Ant Gazette
Some folks sure take their economic theories seriously. [Read More]

» The Long Tail of Relationships from Profound Connections
I recently had the opportunity to read Chris Anderson's new book The Long Tail. In fact, because I planned to review the book on the blog, Chris actually sent me a copy. This post will be both the review, and a set of thoughts inspired by the book. [Read More]

Comments

lucie

Hey Chris, just wanted to compliment you on this classy response. It's firm and insightful without getting defensive or nitpicky. Well done.

Vince Yamat

i just got a copy of your book and was reading it last night and was impressed with the analysis. From what i read so far your point above is correct and the analysis is right on.

Greg

It seems that Gomes decided he was going to debunk the Long Tail, then let confirmation bias take over. Very disappointing.

AmazonCustomer

Mr. Anderson,
I just read Gomes' article and your response. I have a question regarding the important point you raise of the denominator growing infinitely large in the percentages. A premise of the business model for Amazon and others is that it is very cheap to carry a product in your on-line catalog when you don't have to actually display it in a store or even store it in your warehouse. (We're talking about physical products now -- now downloadable music and software.) But SOMEBODY has to store it or else the product really isn't available. All Amazon has done is shift the cost of warehousing to their supplier. And, I can tell you from experience, that many of these products aren't really available. Any comments? Thanks.

David Meerman Scott

I certainly don't have the data, but it would be very interesting to measure the percentage of all business news read in 1994 (pre-Web) that is attributable to The Wall Street Journal v. small niche publications and compare that percentage to today by including the huge long tail of business news available on the web.

In 1994, for business news we had a bunch of print publications and a few subscription online services like Factiva and NewsEdge. Today the long tail of business news includes (I would argue) millions of blogs, online vertical sites and whatnot. Yes, the Wall Street Journal is still important. But for many people who read long tail news online, the WSJ maybe isn't as important as it was in 1994 with less long tail choice. Is there a wee bit of sour grapes over at the WSJ perhaps?

Silverbrow

Chris
As you know, I'm enjoying the book. I've just read an article in the New Yorker on the dangers of reading too much into trends from short term data and was interested in your take on it. The article can be found here http://www.newyorker.com/talk/content/articles/060731ta_talk_surowiecki.

Lew

Chris,

I am not of the "Wall Street Journal" but I have read and reviewed your book on my blog, bizsolutionsplus, and just now submitted it to you as a trackback.

As for the Journal's review, I never attempt to translate a person's motives, so here is my simple reaction to Gomes' review.

It is impossible for me to argue the data, no matter who interprets it, but I do think "The Long Tail" raises questions, which is a good thing and, frankly, I don't care if answers are provided today. Because I think the essence of your book is visionary and predictive and serves the great purpose of alerting us to a phenomenom coined "The Long Tail" that all businesses need to be aware of and prepared for.

As Generation M ages and we Baby Boomers fade to dust in the wind, I believe that the tiny niches will overwhelm the hits in terms of total sales, and we, especially consultants such as myself, better start helping our clients shift to that model albeit slowly and carefully).

In short, "The Long Tail" is the most important business book I have read since "Built to Last." Congratulations!

One note about your blog reading (as described within your TypePad interview). Many of us choose not to use aggregators (e.g., RSS feeds), as they can feel like push marketing, which can be annoying. Therefore, many of us offer other types of subscription opportunities, and you may be missing out by only choosing RSS Feeds.

W. Frederick Zimmerman

I'm sorry, but I think the fundamental editorial problem here is that you've overhyped your thesis (understandable, since you've spent close to 2 years on a book). As you state, the tail currently amounts to between 21 and 40% of revenue. That's certainly nothing to sneeze at, but it's not the stuff of revolutions.

Nathan

Why would Amazon and Google invest millions in scanning old books if they didn't think that the long tail was going to be an important driver in the future? I've done research into this phenomenon in books and there is clearly a paradigm shift happening.

Mr. Gomes simply questions some of the data in your theory and tries to rebut. The 'head' and the 'tail' matter less than the fact that soon everything will be easily accessible online, taking obscure, never purchased content and making it available to anyone. The world is changing and I give you credit for giving this idea a name and being its champion.

B. Michael

This whole long tail thing is the exact reason why I stopped reading Wired. The writing for that magazine is worse than science fiction (not that sci-fi is bad) because it's being given under the guise of science fact--but it's still fiction! Hot air rising out of organic food co-ops and Apple stores is just like hot air rising out of the News Corp. offices. Jesus Christ.

David

I guess one of the hazards of putting anything out in the world is that sooner or later you encounter people who are neither head nor tail, but are more like that region just below where the tail meets the body. What can you do? Most of the reviews seem like they've been very positive.

Ryan

In your example, you add 99,000 titles, and top 100 *still* commands a full 50 percent of the sales. Isn't that a shift toward the head? If just one of those 99,000 titles made a single sale while the top 100 held steady, it would erode that 50 percent for the "head".

In your example, the top 100 not only has to grow to hold its 50 percent share, it has to match the sales of 99,000 new titles! If it can do that, I would say that _is_ a shift toward the head.

Interesting issue.

Chris Anderson

Ryan,

I think you misread the example. When I added 99,000 titles the top 100 fell to 25%. So the head share shrank.

Chris

K T Cat

As I wrote in this post, trying to define "head" and "tail" in percentage terms is meaningless in a market with unlimited inventory, because the denominator can grow infinitely large

No, it cannot grow infinitely large. It is limited by the number of people willing to spend their time taking incredible longshots on getting a hit plus the number of people producing content because they feel like it.

I thought Mr. Gomes' article was very well done.

I'll take it as a compliment that I now warrant a proper Wall Street Journal takedown for crimes of...well, I'm not quite sure what the crimes are.

That sounds a little melodramatic with a hint of martyrdom. I din't see it as a takedown. It was an analysis of the demand curve as it pertains to your assertions about the tail.

Maven

There's a bit of a Long Tail bandwagon that has been growing with gradual accelleration ever since Chris's first Wired article on the subject. I suspect that Gomes's review is a reaction against this fetishization of the Theory; like the Federal Reserve Board chairman, Gomes just wants to deflate some of the hype. Not saying that the Long Tail Theory is hollow -- in fact, I was an early believer -- but now that the book is published, the Theory will have to survive the scrutiny of experts before it can become the Long Tail Principle.

John Dumbrille

Gee Chris,
Is the contraversy worth it for you? Trad media looks after trad media, either by conscious self interest or by professional deformation.
Take the main points, cut through them and move on. Dont let 'em get you on the back foot, don't spill too much ink their way...
Onward, onward!
I love the book and the site.

Alex Gochtovtt

Since I read your article in Wired and have now purchased your book, I feel obliged to respond to the stalwarts at WSJ. My view is that the long tail theory plays out over time and not necessarily in the snapshot that are described in the article. Consider that it takes 2.5 years for an Amazon customer to become profitable. When you also consider the vats of data about consumer behavior and habits currently being collected and analyzed, there an opportunity to continuously grow and optimize the tail. Growing and optimizing the tail results in higher lifetime value of a customer at a rate that is much faster than what could be done offline with the dis-integration that exists in the information value chain that support those businesses. Why is eBay so successful, because there is something for everyone. PhiladelphiaBottom line, the long tail is here to stay: Grow it an optimize it!

Alex

M.Daniels

Just curious then... What IS a good statistical definition of the head vs the long tail? Any normal statistical definition would be self-referential, resulting in the circular arguement -i.e. in Gaussian, 3 sigma is whatever contains 99.8% of all sales... Can't pick Pareto's top 80% of sales, or top 20% of titles, if the denominator (number of titles) is arbitrarily infinite.

Perhaps a good measure of the beginning of the tail is the inflection point, where the curve goes from convex to concave. (y=1/x has no inflection, or we say arbitrarily has inflection of x=0...)

Perhaps a better theory to start with is the "Kangaroo Theory", that the first bit of the tail is much thicker than you find in a normal animal.

I like the "Long Tail" discussion because I think the concept is obvious and intuitive once explained. The tail is still undemonstrated because even with Amazon or iTunes or Netflix, the availability and distribution hasn't reached the level of simplicity and convenience that the "hits" enjoy. I can find the hit paperback in every newstand and drugstore, but I have to think of and order and wait for that obscure 50's sci-fi classic.

rkellz

While I have yet to read the book the present discussion leads me to belive that Chris has mearly confirmed the 80/20 rule. Additionally, any discussion of fat tails that does not contain the word 'leptokurtosis' instantly loses credibility with me.

John Dodds

In your example, you add 99,000 items and they collectively take 25% of the sales - that's a big assumption backed up by nothing and I think shows the difficulty of dealing with hypothetical examples. Gomes's strongest points arise from his research into actual figures for Rhapsody and Ecstat which, if correct, seem to me to be powerful rebuttals to specific claims.

Having said that, it doesn't deny the importance of the Long Tail, it just alters the economics of potential businesses therein and I'm sorry British railways conspired to prevent me attending the London geek meeting enable me to understand it better.

Anita Elberse

Chris,

I have no intention of inserting myself into this discussion ;-), but I have one small comment:

You say "Nielsen VideoScan data (...) is almost entirely taken from bricks-and-mortar sources." I don't think this is entirely correct. The VideoScan data reflect both offline and online sales, and actually break them down by channel. The breakdown is not as detailed as one might wish in an ideal world, but they do allow one to track whether, say, the share of offline sales go down over time. Therefore, I do think the fact that my colleague and I only observe a "slight" shift is meaningful.

Erin

You mention Nielsen VideoScan data that reports only brick-and-mortar retailers. Significantly, Wal-Mart doesn't report to Nielsen VideoScan, so the largest packaged media retailer in the country isn't included in VideoScan's numbers.

Peter Duke

Wow, I only have personal experience to go on here. After working on the Virgin Megastore Online from 1999-2003, I can tell you that our weekly product meetings were an amazing experience. Keith Chagnon, the Product Manager, would come in with the weekly sales. The first page had the "hits"... double, or occasionally triple digit sales, but by half way down the second page, sales were into single digit quantities, and by the third page, the "1s" started. Keith would walk in with inch-thick reports, filled with single SKUs. Management continually tried to get the performance on the site to match the stores, but, in the end, they were two different beasts. The long tail was alive and well at the Virgin MegaStore online...

Sean

Chris, I agree with the earlier comment that:
"Gomes's strongest points arise from his research into actual figures for Rhapsody and Ecstat which, if correct, seem to me to be powerful rebuttals to specific claims."
Your failure to address them in your post is unnerving, as was the failure to post on your blog or include in your book updated numbers from these companies whose surprising statistics launched your quest.

Chris Anderson

Sean,

I'm not sure what you mean. My research *was* based on the actual Rhapsody figures, of which I have several years' worth. Have you read my book? It's all based on hard data. Indeed, Lee got some of his data from *me*.

Chris

Sean

Chris,
I refer to the figures for Ecast, a company that told you years ago that 98% of its catalog gets played at least once a quarter.
The WSJ says that the latest numbers show this phenomenon is becoming less pronounced, not more pronounced. Ecast's "quarterly no-play rate has risen from 2% to 12%."
Considering that the Ecast example helped launched your Long Tail quest, I think it's an oversight that you didn't bring to light this trend and discuss it on your blog and elsewhere.
I concede that there are other examples that suggest a long tail phenomenon exists, such as at NetFlix and Slate.com. But I feel the WSJ has brought up a fair point with one of your showcase examples. Am I really being unfair, as a reader, to be disappointed in your lack of curiosity about what has been happening at Ecast, when two years ago you thought the numbers from that company were worth discussing?
Sean

Michael Schwartz

Re: the quote from the book jacket: "What happens when the combined value of all the millions of items that may sell only a few copies equals or exceeds the value of a few items that sell millions each?"

Yes, it is written in future conditional. But the implication (insofar as it's future conditional) is that the reader will learn the factual answer, in the _very near future_, within the text of the book. (Given that this statement is on the book jacket.)

A more accurate statement would be, "What happens IF the combined value...." If statistics are trending toward a certain way, then you're only describing a possibility, and your book would be describing how those future economics/marketplace are likely to look.


From your post, it sounds like you knew what to expect from Gomes, from your conversations with him before his article went live. It probably bothered you he wasn't quoting the jacket correctly. But he properly communicated the intent of the jacket's text, even if as the author/publisher you wanted to try to have it both ways. (Making it sound like *Long Tail Is Happening Right Now* but still not be factually inaccurate about it. But defending that position is roughly analogous to debating the meaning of what "is" is.)

In fairness, he grossly understates the important difference of what makes a hit, that is, if we define it by "Billboard Top 100" (that is, the content that top-line content producers create), then the number goes down. If we define it by "Top 100" plus "Second 900" (which includes content of middle-line and upper-bottom-line content producers), then yes number stays high, but it's evidence of the long-tail working. (Inasmuch as in the future, we've expanded "popular" by a factor of 9... pretty impressive.)

Conclusion: don't wage a battle of words over a verbal technicality that you don't have good standing on (blame it on your publisher, easy way out)... instead focus on how he wasn't fair to the basic thesis of what you were saying with the book.

Best regards, -Michael

Chris Anderson

Sean,

To be honest, I wasn't aware that Ecast was still in business. That single data point back in early 2004 simply started my research, which evolved into the Long Tail research that has been the focus of my last two years. This more recent research has been in bigger companies, such as Netflix and Amazon. And, as it happens, Netflix does give the relevent statistic: 95% of its 60,000 DVD are rented at least once a quarter (http://www.netflix.com/MediaCenter?id=1005&hnjr=8). I sent Gomes that information but--surprise--he chose not to use it. So to answer your question, although my research was focused elsewhere, the companies I was following seemed to confirm the original observation that there's at least some demand for nearly everything. You might want to ask Gomes why he didn't mention the Netflix data.

Chris

Chris Anderson

Michael,

Many thanks for your smart points and wise counsel. Yes, there is the small issue that Gomes seemed to entirely miss the main point of the book. And you're right that I probably shouldn't labor to defend every tangential point, but rather keep the focus on the big picture. But although I didn't write the jacket copy (and the book itself, which I did write, doesn't use that phrasing), I guess I have an editor-in-chief's instinct to take responsibility for everything that happens on my watch and defend it. I had a leg to stand on in this case (although perhaps not, as you note, two legs), so it wasn't too much of an effort. But you're right that Gomes' basic unfairness to the thesis would have been a more worthy target. Next time...

Chris

Chris Anderson

M. Daniels,

You asked for good definitions of "head" and "tail". In markets where there are offline and online counterparts, I think my definition of tail as "products not available in the dominant bricks-and-mortar retail in that market" is a sensible one. In other markets without good offline counterparts (search terms or blogs, for instance) you're right that one has to resort to semi-arbitrary statistical definitions, such as ratios between deciles (which is why my book very intentially doesn't go down the statistically fraught percentage path that Gomes got lost on). If you have any good suggestions, I'd love to hear them.

Chris

uv

In summary, you think Hits are measured by absolute numbers, while he thinks they are measured by percentage. Inevitably, this leads to the question of whether more content (in absolute numbers, that is) will be available.

Sam Rose

Wow, great debate!

I think that a qualitative dimension that should be factored in to with quantitative data on the Long Tail is the nature in which the retailer presents the wares.

For instance, if a retailer tries to direct people towards the "hits" on their site. If the retailer does not take advantage of the long tail by recommending or pointing people to the more obscure, or more out of date, the independently produced and the under-advertised, then they are likely going to see this reflected in their sales numbers.

Both Netflix and Amazon employ recommendation systems that point people to the "tail", for instance. The also make it easy to find the more obscure, or more out of date, the independently produced and the under-advertised in their systems.

So, it's not just a matter of numbers, but the way that the buyer interface is designed, and the nature of the way the buyer is directed that has an effect on the "Long Tail", IMO.

From what I can understand from Chris' book and general thesis thus far, he is saying that a retailer can take advantage of the "Long Tail" if they design their experience in a way that makes it easy for for the buyer to find and make these choices. I think that search, browsing by genre, customer reviews/feedback/rating systems all help to capitalize on the "long Tail". And of course, recommendation systems like what Amazon and Netflix are using help even more.

I'll bet if we look at online retailers who employ these technologies vs. online retailers who do not, we'll see more of the "Long Tail" sales phenomenon in people who actually use their systems to work it via search, browsing by genre, customer reviews/feedback/rating systems, and recommendation algorithms.

Lewis Green

This is a great debate, and as I said in an earlier post, I am not qualified to analyze or comment on the data.

However, as I also said in the earlier post, the data is backward looking, and I find it less compelling than what I believe to be the most salient point of the book: As more people (e.g., the M Generation) become enculturated and accustomed to having their specific needs met, hits--whether product or services--will continue to become a smaller piece of the total pie. Consultants and business executives/owners need to begin paying more attention to this phenomenon and recognize that the tail ignored is an opportunity missed to grow and to grab market share.

Is the tail poised to overtake the head? I doubt it. But when businesses wait for the customer to change his/her buying habits, they wait too long. They then become reactionary and lose market share to the visionary businesses.

Joe Buhler

OK, let me jump into the fray as well....As a blogger ranked somewhere at 1,748,509 or so - I'm most likely further from the head than the proverbial tail's end and my income counter remains fast stuck at zero. Now, that doesn't bother me much as the blog is more an excercise in getting my thought process going than anything else. As with so many predictions about the internet embraced and hyped or de-hyped by the mass media, and now by the blogger crowd as well,the reality lies somewhere in the middle.
The discussion reminds me of the one in the industry I'm most familiar with - online travel, where the instant demise of all travel agents was predicted nearly ten years ago at the birth of the major online travel agencies, that now dominate the online travel market, and still do, despite the faster growth of travel suppliers (airlines, hotels)in the last two years or so. At the same time, thousands of independent, mostly home based travel agents are now successfully tapping into social networking and adopt Travel 2.0 methods to compete by leveraging their personal know-how and experience by using the web as a tool.
I believe the tail will grow longer over the years but the head will not atrophy either.

Mike Abundo

K T Cat: It is limited by the number of people willing to spend their time taking incredible longshots on getting a hit plus the number of people producing content because they feel like it.

Everyone wants that. They've just been trained not to for the last two hundred years.

Adam Adamou

One of the things that bothered me while reading the book was this "feeling" that something was wrong with looking at the Long Tail of demand as Chris has described. I finally realized what it was.

Chris' analysis is not about demand curves, it's about supply curves. Coming to that realization cleared everything up for me. That's why the book is so centered on suppliers, whether dealing with Amazon or Rhapsody or Google, the points that Chris makes by and large are supply side points. The demand, as it where, may have always been there, it was just latent or unfilled. The factors that he cited, whether supply chain management, zero marginal cost digital products and so forth have INCREASED THE SUPPLY OF PRODUCT available at lower and lower prices. This is in effect, the long tail of supply, not of demand.

Again, in a standard Eco 101 chart, Price is on the vertical axis and Quantity on the horizontal. The demand curve, using this chart has not moved much. The supply curve however has moved down and tilted to the right. In other words, suppliers are willing to sell more and more at lower and lower prices to get to the niches.

It's all about the supply Chris. That's the point that you missed mentioning directly, though nearly every example and point that you made in the book was geared toward supporting that argument.

Frank Deutschmann

In the example given in the blog entry above, increasing SKU line items 99 times (1000 before, 100,000 after) resulted in doubling sales revenue (top 100 before were 50%, now they are 25% i.e. now sales of all SKUs are 4x original top 100 sales). Doubling revenue by increasing inventory 99x is ceratinly growth, but note that the incremental revenue per added SKU is near zero, and that expenses associated with the added SKUs must be very near zero to achieve significant profit growth! Of course, the devil is in that very detail: keeping incremental costs to zero is very difficult, whether in the online world or in the b&m world....

(If we take that mathematics-esque point of view and assume that incremental expense of carrying additional SKUs is zero, well, we can prove just about anything we want, starting with infinite profit potential -- cashflow.com, anyone?)

Note also that the continuing sales of the original top 100 and original 1000 products are indeed subsidizing the expansion and sales of the additional 99,000 products.

Is this a "long tail"? Well, sure, call it that -- it depends on how you want to define the head versus tail products, whether you are analyzing the supply side, the demand side, or (most importantly) the profit. (More to the point: how do you want to achieve profit growth, and at what cost?) But you could also call it just a modern supermarket/supercenter.

I find it fascinating that yet again, the e-commerce world has failed to notice similarities with the existing "bricks & mortar" history of business -- note that supermarkets have been dealing with just this sort of analysis situation for ages now. There are many, many factors that go into analyzing supermarket expansions, and these are all well understood, though there is still, of course, an art to achieving success.

Maybe super-sophisticated search and on-line inventory management & fulfillment will someday be both cheap enough and accurate enough to trully reduce incremental inventory costs to zero, but until then, it would seem the analysis is a whole lot more complex than the long tail lets on...!

Jay Rosen

Chris: In my experience, once a journalist has decided he's got a debunking column or review to write, nothing dissuades him. The more you protest, the more certain he becomes that he's got your number. The idea becomes fixed that you're so attached to your thesis that your protests are really confirmation. Climbing back from an intention to debunk becomes particularly hard.

Chris Anderson

Frank,

I think you misunderstood my hypothetical example. In that example, total revenues were unchanged--it's just the mix of revenues between head and tail that changed. This was just a hypothetical to make clear why the percentage approach of measuring head and tail doesn't work. In the book and elsewhere I use real-world data, and although I don't use the percentage approach for reasons I've explained, I do get into details about the differing margins in the head and the tail.

Chris

Jay Brooks

At the risk of sounding like I'm suggesting it's a conspiracy, and facts about the debate aside, it seems quite obvious "what the crimes are" that the Wall Street Journal cannot let lie. The status quo always rises to protect itself anytime it feels even the least bit threatened. The WSJ is simply rushing to protect the traditional business model. Almost any change is preceived to be bad, especially if it didn't originate in the hallowed halls of traditional businesses. Change is always resisted, that's the very core of conservatism. The WSJ is a major voice for conservative economics, so they have no choice but to attack change.

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Tidbits

The Long Tail by Chris Anderson

Notes and sources for the book

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