The Long Tail Summary

The Long Tail review

Alexandru Dumitrescu

Words: 3002

I. Book and Article Review

Chris Anderson was the chief editor at Wired from 2001 until 2012. He is well-known for his article “The Long Tail” from 2004 which was the starting point in writing “The Long Tail:

Why the Future of Business Is Selling Less of

More” in 2006. In 2007 “The Long Tail” is considered “the best business book of the year” by “UCLA Anderson School of Management” and he was given the Geral Loeb Award. Other works include “Free: The Future of a Radical

Price” (2009) and “Makers: The New Industrial

Revolution” (2012).

The book brings into discussion a very interesting concept, which can be summarized with the words from the author’s personal blog: “economy and culture is

On the other hand there are skeptics about the value of truth of the theory. Wharton researchers

Serguei Netessine and his doctoral student Tom F. Tan have recently research the theory on Netflix’s data and their opinion is that focusing on niche products doesn’t necessarily bring more profit and this depends from case to case, the presence of Long Tail being “less universal than one may be led to believe”. But there is one difference between their research and the Anderson’s theory, which is where the head ends and where the tail begins, Chris

Anderson defining the tail in a different way.

The researchers also disagree on the 80-20% rule: top 20% of the movies generate 80% profit.

Anderson states that this rule is not available, as the demand is concentrated on the tail, while

Netessine and Tan have found out that the opposite is the truth, the demand for the top

20% was “increasing from 86% in 2000 to 90% in

2005.” Netessine agrees that this business model might work for a company only “based on pure digital distribution”[5].

A Harvard Business School associate professor,

Anita Elberse has the same opinion. Anderson is arguing again on the difference between how

Also, if the customer likes the book, he or she might come back to buy a similar one. Another way Amazon takes advantage of the Long Tail is by selling rare books that no traditional bookstore has, making huge profits from this: 57% of the profit comes from selling these rare types of books [8]. A third advantage from exploiting the Long Tail is the Amazon Associates branch. Amazon has a lot of products, not only books and it can’t predict where or how to advertise, so a system was created that allows anyone to become an associate, post an Amazon

University of Bristol - Algorithmic and Economic Aspects of the Internet Page 3 of 6ad and if a sale is made, the associate takes 4% of the sale [9].

B. Movie industry – Netflix

Netflix has only 30% of its movie database consisting of new releases [10]. In the graph below taken from Chris Anderson’s blog [11], we can observe that the demand for Netflix movies is the highest in the middle of the curve, while 15% of the demand comes from the movies that are not found in the traditional market.

Fig. 2. Demand curve on Netflix

C. Video streaming - Google

On 15 October 2005, a business founded only eight months before, named YouTube,