The Long but Very Skinny Tail

Interesting article today about a forthcoming study that says "The Long Tail"-- the idea that online niches add up to way more money than mainstream hits-- is only good in theory. Indeed, to give the Tail's creator Chris Anderson credit, it's more than just "good" in theory, it seems ironclad. I remember when I first saw it drawn on a white board. It was that perfect writer's dream of a concept that's universal but only obvious once someone else has uttered it. (Well, it's a dream if you're the writer who came up with it. The rest of us say, "Doh! Why didn't I come up with that?" It's usually accompanied by that dorky I-should-have-had-a-v8 head slap.)

But I've since wondered if the Long Tail actually is true in practice or like one of those baseball teams that looks great on an opening day roster, but somehow finishes dead last. Sure the Web allows us to buy that extra 80% of things out there. And if we did, in any kind of individual volume, it would surely add up to a huge number.

But do we? I know a lot of startups who pitched themselves as Long Tail businesses and are out of business now. Personally, I'm hard pressed to think of many examples where I've paid money for an obscure song, book, or product. For one thing search and discovery just don't work as well as they should on the Net. The study certainly backs up this anecdotal experience:

"However, a new study by Will Page, chief economist of the MCPS-PRS Alliance, the not-for-profit royalty collection society, suggests that the niche market is not an untapped goldmine and that online sales success still relies on big hits. They found that, for the online singles market, 80 per cent of all revenue came from around 52,000 tracks. For albums, the figures were even more stark. Of the 1.23 million available, only 173,000 were ever bought, meaning 85 per cent did not sell a single copy all year."

Anderson counters that this is but one example, and it hardly undercuts the whole theory, and that's a fair point. But I wonder if a better defense would be invoking one of the most important maxims of Silicon Valley: People frequently overestimate what a company, trend or technology can do in a year and underestimate what it'll do in ten years. Think online video: Remember when Yahoo was laughed at for Finance Vision? Today, TechTicker is arguably the most widely watched financial show in less than a year of its launch. We even shoot in the same studio.

Perhaps Anderson was a bit too breathless in just how much, how fast the Long Tail would revolutionize business. But with better discovery, search and even more targeted advertising through social networks, I could see a scenario where that tail fattens out. It's not that I don't want to discover obscure music and books, after all. It's just that most of the Web is aimed at demand fulfillment, not demand generation, and we're likely to want the things we already know exist. Those are likely to be the most well known and popular items, right? There's no doubt the infrastructure for the Long Tail exists online, it's really just a question of demand.