Long Tail Presentation

The Long Tail

Introduction

In this Digital Media presentation, We will explain the functions and meanings of the Long Tail, wand what purpose it serves.

WhenAlthough the Long Tail concept has been around for many years, The concept was not officially identified and named “the Long Tail until 2003 by Chris Anderson.

The Concept itself was first brought to light by an essay written in 2003 by Clay Shirky “Power Laws, Weblogs and Inequality” which noted the fact that the number of hits on lesser known blogs was in fact higher than those blogs that were well known or popular online.

When cont.Anderson references many times that earlier research by Erik Brynjolksson, Jeffrey Yu Hu and Michael D. Smith which was carried out in 2001 helped him realize the significance of the Long Tail model and how it could help businesses expand by introducing “The Niche”

The research carried out by the three men showed that a significant portion of Amazon’s book section sales came from obscure books that are not on sale in many high street book retailers e.g. Waterstone’s.

WhatThe long tail is an a graph business model which visually represents the comparison between the mass and niche market. As there is a Mass and Niche market in every section of today's markets, the Long Tail can be thought of as a necessity.

TERM = Standard demand curve that can apply to any industry from entertainment to hard goods (applies to the orange bit).

VERTICAL AXIS = Sales

HORIZONTAL AXIS = Products

RED HEAD = Hits that have dominated our markets and culture for most of the 20th Century.

ORANGE TAIL= The non-hits or niches which is where the new growth is coming from now and in the future.

WhyThe reason why The Long Tail is such a necessity within business is because it represents the fact that Niche markets can be thought of as a more important and valuable than Mass markets.

This is significant as many businesses natural rely on Mass markets to provide revenue, but The Long Tail proves this is not a correct business strategy.

Such names as ITunes and Amazon have taken this on board and have started to make it easier for customers to find certain musical bands, songs, books etc on online services.

Competitive impactBefore the Long Tail comes into effect, only the most popular products are generally offered.

When customers demand more, a wider range of products become available. This can in turn, have the effect of reducing demand for the more popular products e.g. Web content businesses with broad coverage such as Yahoo! Or CNET, may be threatened by the rise of smaller Web Sites that focus on niches of content, and cover that content better than the larger sites.

Competitive impact cont.

Therefore, the niche markets of mass markets can be thought of as a threat, or just simply competition.

This is due to the fact that consumers may decide to turn to smaller, or lesser known aspects of a market. E.g. Netflix which provides relatively unknown films which Blockbuster only provides well known films.

Cultural and political impact

The Long Tail has possible implications for culture and politics. Where the cost of inventory and distribution is so high, only the most popular products are sold.But where the Long Tail works, minority tastes become available and consumers are presented a wider array of choices.

Cultural and political impact cont.

The Long Tail presents opportunities for various suppliers to introduce products in the niche category. These encourage a diversification of products, this therefore lengthening the tail portion of the Long Tail.

A Long Tail Model may lead to an improvement in a society’s level of culture, as niche markets are more widely acceptable.

Criticism

A 2008 study by Anita Elberse, professor of business administration at Harvard Business School, argues that the mass and niche market comparison should be compared using percentages, rather than Anderson’s use of Absolute numbers.

Similar criticisms have come from Serguei Netessine and Tom F. Tan, who believe the use of absolute numbers ultimately makes the Long Tail inaccurate.

Criticism cont.Also in 2008, a sales analysis of an unnamed UK digital music service by Will Page found that 80% of the music tracks available sold no copies at all over a one-year period.

These findings provoked Anderson to respond and state that due to the data not being available for analysis, the studies findings are difficult to assess without access .

Summary

In conclusion, The Long Tail is a necessity to the business market place as it provides a visual representation of how niche and mass markets when compared together can be thought of as equal entities.