After reading all the secondary literature on this classic book on the economic changes brought by the Internet, finally got hold of it.
Hits are no longer the economic force they once were. A large part of the demand has gone to countless niches. Today’s consumer picks hits just as easily as special non-professional content.
The past: broadcast model sends 1 show to many people. Today: the Internet makes many shows available to 1 person.
Scarcity based economics: requires hits. Only a few slots are available. Then they better be what most people will appreciate. But what is there are an infinite number of slots: The Long Tail.
Curse of the traditional retails business: the need to find local audiences. The market in the stores in only 1/3 of the total market. The biggest money is in the smallest sales.
From geographical separation consumers are now united by their interests.
Theme of the Long Tail:
- There are more niche goods than hits
- The cost of reaching niches has fallen dramatically – offering a huge variety of products is now possible
- Filter now drives demand – filters are necessary for the exploring the Long Tail
- The demand curve flattens where niches becomes accessible – hits are less frequent and less popular
- The collective market for niches is huge and rivals the hits market
Trends: democratize production and democratize distribution.
Aggregators like Amazon, eBay, iTunes, Netflix democratize distribution. Production is democratize through availability of technology: video production, music editing, self publishing, printing, …
Aggregators make available a large variety of good, physical, digital, information, services, communities, user created content (this).
Long Tail demand requires a fan-base that is slowly build. Sudden hits become very rare. Hits can be virals.
Collective intelligence filters the content in The Long Tail: ratings, reviews, …
The Long Tail also manifests itself in culture: the Internet deminishes barriers for niche cultures to reach and find like-minded people. Geek Culture arises.
The secret of Long Tail business:
- Make everything available
- Help me find it
- Marketing: focus on word of mouth: influencers, bloggers, A/B testing, gimmicks, stunts, sharing.