'Long Tail' May Not Wag the Web Just Yet

Carl Bialik from WSJ writes "Expanding on an article he wrote in 2004 (and discussed on Slashdot), Wired magazine editor Chris Anderson argues in his best-seller 'The Long Tail' that the web is changing commerce from a hit-driven business to one focused on niches. But Wall Street Journal columnist Lee Gomes questions Anderson's data, and adds, 'I don't think things are changing as much as he does.' Gomes writes, 'At Apple's iTunes, one person who has seen the data -- which Apple doesn't disclose -- said sales "closely track Billboard. It's a hits business. The data tend to refute 'The Long Tail.' " ' On his blog, Anderson responds that Gomes 'stumbles over statistics and more, and in the end simply makes a muddle of what might have been an interesting debate over the magnitude of the Long Tail effect.'"

Comments

Look at Amazon sales

[Anonymous Coward]

Amazon doesn't keep their sales rankings private. There is clearly an element of hits ("best sellers") and long tail (everything else that isn't new). I've seen books from the 90s go from the 500,000s sales rank to the 1,000,000s range and back over the course of a year.

Re:sales "closely track Billboard"

[deinol]

Right, but isn't that the point of the long tail? If Dan Brown sells a bazillion copies of "Da Vinci Code" and I sell 500 copies of PMD Applied, we're both happy

No, Apple is the one that is happy. The point of the 'Long Tail' is really that a lot of money can be made from large stocks of low volume items. Particularly with digital merchandise where no product needs to be stocked or with things like print-on-demand where the product is produced quickly to meet actual orders. You may only sell 500 copies, but when Apple sells 500 copies of 100,000 different less-known artists songs they make a hefty amount of money.

It's economics, not statistics

[theStorminMormon]

If you don't understand profit, you probably shouldn't write at the Wall Street Journal. Profit = revenue - cost.

It seems that Mr. Anderson's book (I RTFA, but not the book) claims that higher sales in the tail will increase the profit of the tail and this will change the economics of the web. This doesn't make much sense to me, and the article rightly points out that there is not that much interest in the tail.

But that's not the point. The point is that to stock "tail items" (niche items) in a brick-and-mortar store COSTS a lot of money. It costs money in terms of the hit-items you can't stock because you've got limited inventory space (opportunity cost at work). But the cost of stocking niche items digitally is far, far less. The promise of profit from the tail is not based on increased revenue as much as it is on decreased cost.

Take the example of Apple's iTunes sales. Even if they do closely track Billboard sales, this doesn't change the fact that Apple is profiting MORE from their tail items than a brick-and-mortar store would be.

It seems as though both of these guys are missing the point: the promise of the tail is not in increased revenue, but in decreased cost.

-stormin