The Long Tail: How One Person's Junk
Becomes Another's Treasure
in the New Economy

It is difficult to believe the current e-commerce revolution owes anything to the quaint anachronism of an 1897 Sears mail order catalog, but Chris Anderson makes the case in his book The Long Tail: Why the Future of Business is Selling Less of More. Sears' popular catalogs were one of the earliest examples of "viral marketing." With its highly efficient supply chain of producers, warehouses and delivery systems, Sears was able to create in the Nineteenth Century what companies like Amazon and Rhapsody have now mastered: providing consumers with a near infinite supply of even the most obscure items. Anderson coined the term "The Long Tail," to explain this phenomenon. In his book, Anderson presents a compelling view of how innovations in technology, and the forward-thinking genius of companies like Amazon, eBay and Google, have given birth to a Long Tail that is revolutionizing not only commerce but culture.

What is "The Long Tail"? Perhaps the easiest way to explain it is through one of Anderson's own examples: Why were shows like Gilligan's Island so popular back in the 1960s while current offerings struggle to find an audience? Because there was little else available, explains Anderson. The entertainment world was bounded by three major broadcast channels, a handful of mainstream films released annually by the major studios, and a list of manufactured "top 40s" musical hits. Entertainment options were a scarce commodity, and you took what was available and were grateful.

Today, we are bombarded with choice. From the typical theatrical pap that plays to a worldwide audience of millions, to the most obscure Japanese anime played on some teenager's computer screen, entertainment options are overwhelming. It is the Age of Abundance.

In this new age, there is no "mainstream," but rather an infinite segmentation of niche markets catering to very specific tastes. In an entertainment industry dependent on blockbuster hits, these niches were once considered the "misses" or profit-draining endeavors. Now, at least for some companies, they are the fastest growing and most profitable segment of the market. How did we get here? As the relative cost of producing and storing goods (and services) nears zero--and as items become easier to find thanks to eBay, Google, Amazon and others--it becomes both possible and profitable for suppliers to sell almost anything no matter how little demand there may be in the mainstream.
The example of Rhapsody provides a good illustration. Rhapsody is an online subscription service with over four million songs available for download. Four million. (Photo credit).

How could there possibly be enough demand to sustain a repertoire of four million songs? And yet, almost every digital byte of music in Rhapsody's collection will find a home with some consumer somewhere. One CEO Anderson interviewed called this the "98 Percent Rule" noting "In a world of almost zero packaging cost and instant access to almost all content . . . consumers exhibit consistent behavior: They look at almost everything." And when they look, they buy.

What Rhapsody, Amazon and other online providers have found is that the market for niche content is huge; indeed when put together, demand for niche products outstrips demand for the mainstream hits. In fact, companies like Rhapsody generate much of their profits from products at the margins of consumer preference.

But The Long Tail also casts a shadow. Not every "garage band" on Rhapsody produces great material, nor is every half-baked e-book available on Amazon worth the paper it is printed on. In short, there is a lot of junk in the Long Tail. Studies have shown when consumers face too much choice--especially when some of it is of low quality--they become paralyzed and buy nothing at all. Anderson readily admits this, but he argues the solution is to create better filters like Google's search engines and Amazon's reviews that edit out "noise" and provide consumers with the information necessary to choose. As long as consumers have these filters to weed out the meritless, the Long Tail will keep on wagging.

The problem of death by a million bad music bytes is not the greatest challenge in the new era, however. The bigger shadow cast by the Long Tail is one technology cannot easily overcome.

Culture is meant to be a unifying force, but in a world of ever more narrow niches we lose much of that cohesion. For all of its challenges, television once played a key role in bringing people together as they watched The Lawrence Welk Show or Happy Days; and in the workplace, standing around the water cooler discussing last night's Seinfeld episode was a time-honored tradition. Such discussions become impossible when we are not watching the same shows, listening to the same music or inhabiting each others' worlds. Anderson gives short shrift to the problem, but the invention of the suburb is a cautionary tale of what is possible. Once families moved out to the 'burbs, parked the family car in their garages, and lived their lives in the backyard rather than the front porch, connective bonds between neighbors quickly disintegrated. The result was a bland, stale and disengaging suburban culture from which we are still recovering.

The world of abundance Anderson envisions has not yet arrived en masse. Even in the entertainment industry, where it has made its most spectacular début, The Long Tail's full capabilities of infinite supply are hampered by such pedestrian constraints as copyright law. It is difficult to distribute old television classics like "WKRP in Cincinnati" in new media, for example, because securing the music rights is prohibitively expensive. Anderson views such constraints as impediments to be resolved quickly, but perhaps they are really blessings in disguise because they give us time to prepare for the coming onslaught (and a reprieve from bad television shows!)

As the revolution matures, it will take great strength and foresight to ensure the New Economy's Long Tail is firmly within our grasp.