Has “The Long Tail” been refuted?

Prof. [Anita] Elberse looked at data for online video rentals and song
purchases, and discovered that the patterns by which people shop online
are essentially the same as the ones from offline. Not only do hits and
blockbusters remain every bit as important online, but the evidence
suggests that the Web is actually causing their role to grow, not
shrink.

Here is the summary article.  Here is the Elberse paper.  Here is Chris Anderson’s response.  Overall I cannot call this one for Elberse.  If you take a genre as given, the web looks less revolutionary but part of the long tail is the creation of new genres.  We have blogs now, for instance, and we didn’t fifteen years ago, even though blog readership is quite concentrated among the top sites.  Or maybe the "Quickflix rental distribution" isn’t so skewed to the left (the least-rented titles aren’t so popular) but where were Quickflix, Netflix, and other such services fifteen years ago? 

Static estimation by deciles and related measures is often misleading since in part the "long tail" effect is to make the top deciles thicker than before, not necessarily to raise the status of the bottom decile relative to the top.  In his response, Chris Anderson nails this point:

The best example of this is in what she describes as a growing
"concentration" of sales around a relatively small number of
blockbuster titles. In the Rhapsody data, she finds, the top 10% of
titles (out of more than a million in that data sample) accounted for
78% of all plays, and the top 1% account for 32% of all plays. That
sounds pretty concentrated around the head, until you reflect, as she
notes, that "one percent of a million is still 10,000–[…]equal to
the entire music inventory of a typical Wal-Mart store."

Nor does showing that most of the sales are in the top of the distribution refute the claim.  Arguably it is the middle tail which is suffering and the long tail, and the best sellers, are growing in import.  That seems compatible with Anderson’s core thesis.  The long tail hypothesis may be oversold but the data in the Elberse piece don’t really dent it.

Elberse wants to define the Long Tail hypothesis as claiming there is
more money to be made in the niches than in the blockbusters; while I believe you might find a quotation to that effect from Chris Anderson the more
general idea is simply how important the niches are
becoming.  Elberse concedes a lot at one point:

It is undeniable that online commerce has significantly broadened
customers’ access to products of all varieties, including the most
obscure. However, my findings suggest that it would be imprudent for
companies to upend traditional practice and focus on the demand for
obscure products.

You could have rewritten that as "The Long Tail hypothesis is basically true, just don’t sell to the Long Tail alone."  On that we should all be able to agree.

Comments

You could have rewritten that as "The Long Tail hypothesis is basically true, just don't sell to the Long Tail alone." On that we should all be able to agree.

Why? If you're the only company in a genre, it's foolish to sell only to the tail. But if there are established incumbents who're doing a good job of selling to the head, selling to the tail alone could be a perfectly sensible business model. It all depends on the structure of competition, not just on the structure of demand.

I should add that there's no reason that I know of to believe that information is different from other goods in terms of patterns of consumption. Information obeys the same laws of physics. What spooky mechanism would give rise to infinite consumer surplus for certain types of information (i.e., the fat head of a power law)?

James,

The long tail is only applicable to situations like online, where you can drastically chop the labor, inventory, premises rental and overhead costs associated with brick and mortar stores.

In this situation, if you've spent the time and effort to put the software and systems and automation into place to be able to sell millions of items in the long tail, how hard would it be to add the 10,000 or so bestsellers? Why on Earth would you omit them and risk turning away dissatisfied customers? On the contrary, you'd probably make them loss leaders.

Merchants often specialize by genre (say, science fiction books), but why would they try to specialize by selling only the long tail? That would only make sense if you ran, say, a used bookstore where people went to browse lazily and serendipitously discover obscure books on random topics, rather than a store where people go to with a specific purchase in mind. But usually when we refer to the "long tail", we refer to stores that sell substantially the entire long tail (iTunes, Amazon.com, etc) rather than a limited assortment of random, unclassified, unsearchable obscure items.

My theory isn't to call it for one or the other. The internet is communication. It also reduces the cost of transaction and system design and automation.

This will increase the network effect as well as increasing the chance of finding that one great work which is popular because it is good. It also reduces the cost of finding that work that is good but obscure. The internet reduces the cost of getting those things everyone want as well as those things only you and a handful of others might want. Since the costs of the latter have been higher, I'd side with the long tail.

The internet provides more opportunity for both the popular and enigmatic, what does that mean? It is both too early to measure the effect of the internet and too late. Too early because once everyone has everything, then they will focus more on individualization. It's too late because you are right that you can't measure something with and without the internet. The first to benefit is that which is already popular.

In politics, the Ron Paul phenomena is evidence of the network effect of the internet. Barack Obama is not proof of the lack of a long tail. They both benefit from the internet, Ron Paul benefitted moreso on a percentage basis.

I can give you one concrete meatspace versus online example of the long tail. Try finding a booklet (aka "saddle") stapler at Staples or Office Depot or any other store in your city. Now, simply go to Amazon, and because they lengthen their tail with affiliates, you can find a few vendors who stock them and ship them out quickly. Furthermore, by aggregating the rather low demand for this product across the nation, the booklet stapler is even competitively affordable to the more common "long reach" stapler. And since it's available, I can recommend it to people and others can recommend it to other people, and its niche probably manages to maximize itself, although it will probably never break into mainstream.

You mean like this one? You can get those at a regular Staples by special ordering it. Like you can in a meatspace bookstore.

I used to research a closely related issue, and did in fact invest in the Long Tail, since it was appropriate for what I was doing.

Some explanations and thoughts here.

Comments for this post are closed