Heads or Tails: Calling it in the Air

The phrase “the long tail,” coined by Wired editor Chris Anderson, refers to the increasing viability of selling to a small niche of consumers rather than marketing to the masses. In the book of the same name, this concept is parlayed into business advice based on the assumption that the web has made it not only possible, but, in the long run, more profitable to make more money off smaller groups of the most dedicated consumers without risking more up-front to gamble on blockbuster hits. The phrase refers to the graph of how sales might look in this model, with the most mainstream hits still in the “head” (selling a lot to many people) and an increasingly long, flat “tail” of materials garnering smaller sales to few people (but still selling enough to get by). Favorite examples of this theory in action are Amazon and Netflix, systems which make it possible to offer a broad array of unique products in addition to the usual hits, even if each of the more obscure products only reaches a small audience.

I recall this now because of an article in the Harvard Business Review, “Should you invest in the long tail?” The author’s research indicates that attention to blockbusters may actually be increasing, rather than decreasing, online; she suggests, “the tail is likely to be extremely flat and populated by titles that are mostly a diversion for consumers whose appetite for true blockbusters continues to grow.”

I found this via a column in the Wall Street Journal, in which the writer characterizes Chris Anderson’s book as “something of a sacred text in Silicon Valley,” following a “template” he declares common to Wired articles: “take a partly true, modestly interesting, tech-friendly idea and puff it up to Second Coming proportions.” He also links to a response to the article on Chris Anderson’s blog, but kind of dismisses it with a summary about some disagreement of “heads” and “tails.” I suggest taking the time to actually read that response, however, as it presents what seem to me some considerable corrections and critiques. Notably, Chris Anderson points out that this assessment of the online music market describes a “head” representing roughly the stock of Wal-Mart, with sales for everything else being “even more tail-heavy than the data I cited in my book.” Unless I missed something, then, one way to interpret this new data might be that online access to media isn’t pulling attention away from the niche products, but that sales of blockbusters are moving online (and potentially away from Wal-Mart).

Overall, though, what I find fascinating about all of this is not in the rightness or wrongness of the theory, but in how these writers all insist upon applying it: as business advice. I think the underlying theory itself is pretty well supported even by the data described in the HBR article, but the conclusions about what businesses should do about the increasing relevance of niche markets remains murky at best. Taken on a case-by-case basis, I’d have to imagine that some models work better for some businesses, and other models work better for other businesses. (Warner Brothers is doing decently enough, thank you very much, but Jonathan Coulton has no need for your old-fashioned record labels and blockbuster models.)

Something of a wild card in assessing the business impact of the increasingly long tail is that a lot of things being produced and consumed in that tail are by volunteers and enthusiasts, not businesses. To some extent, perhaps this helps people arrange themselves into loose mini-market segments, which could potentially throw their weight to businesses. For example, the audiences of twenty different nerdcore artists and webcomics creators, who don’t make a living off their creative work, all follow links to a site of mutual interest—and bam, that leads to more word of mouth for that site, and now that person makes a living off creative work. By the same token, when you look at the long tail as a theory that describes consumption patterns, there’s really no guarantee that the majority of the producers distributing materials in the tail will be getting paid for their work. I suppose that’s not a problem if you happen to be a venture capitalist funding 100 different webcomics, but it’s not clear to me where the welfare of the individual creator fits into this model.

By now, those of you who are more familiar with this theory might have guessed right now that I haven’t read most of the aforementioned “sacred text” yet, so perhaps Chris Anderson already addresses this more ably than I have here. (For now, reading this one is somewhere on the increasingly long portion of the to-do list falling under “finish dissertation.”) I welcome you denizens of the tail, however, to jump in and set me straight.

2 thoughts on “Heads or Tails: Calling it in the Air

  1. Nice link. I think that a big source of the conflict in this debate (and in many cultural and scientific debates) is that, to get an article or book published, you kind of have to sound like you’re either saying something groundbreaking, or retorting a claim somebody else made to sound groundbreaking. And that usually means adopting a more extreme position than is actually supported by reality. I think it’s kind of a no-brainer to say that the truth of debates such as this is somewhere between the extremes, but that makes for a thesis that sounds wishy-washy to the casual reader.

    And I prefer to think of the middle as “stocky.”

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