The Sometimes Fallacy of The Long Tail

There's been a lot of talk (maybe too much talk, to paraphrase Bono) about The Long Tail and how it changes everything about what people consume, how hits are made, what people want to hear, how everything big is small again -- but people have taken that perhaps too far as Lee Gomes contends in a recent blog post about hits. Lee's piece is well thought-out, and I think raises a very valid point that whereas there is value in the Long Tail idea, sometimes people take it too far and that "Hits" still count for a lot. His earlier piece is a more direct critique of The Long Tail and worth reading as well; we covered that piece about the Long Tail a couple weeks back.

Comments

Hit's don't go away, of course

[2nd Post!]

I think the value add of the long tail is that the concept of "Hit" changes.

Where in a brick and mortar store, which suffers from space constraints so the ROI for any give stock has to be fairly high, the internet shines because the space constraints are looser and therefore the ROI for any given stock can be less and STILL be profitable.

If a Tower Records can only carry the top 10% of goods to be profitable, Tower Online can afford to carry the top 20% of goods and still be profitable. The top 10% will still sell, as always, but the next 10% may contribute up to 30% of the profits despite only being in the second percentile.

As efficiency increases, then each percentile after that becomes "more" profitable, relatively. If Best Buy online can afford to carry the top 30% and remain profitable, with the third percentile adding 11% of the profit and the second percentile adding 25% of the profit, they will sell more, necessarily, than Tower.

So all things being equal, the store with more inventory can sell more. The store with greater efficiency can afford to carry more.

Do I Understand This?

[Bob9113]

Let me see if I can break this down...

1. Mass media enables mass marketing.
2. Mass marketing leads companies to target "the sweet spot."
3. This pays off, and so reinforces the idea.
4. Companies become more and more focused on the center of the market.
5. The tails become under-served, the center gets over-served.
6. White Stripes, Pulp Fiction, Clerks, et al. do it for the artistic vision.
7. Hungry tails turn White Stripes et al. into overnight sensations.
8. Meanwhile, companies continue to pump the center.
9. Overfed center can't consume all the mass-market product.
10. Idiot misinterprets this as the the curve flattening, rather than companies over-serving one market and under-serving another.
11. Idiot publishes a pop-business book, which appeals to the mass of idiots that make up the heart of the market.
12. Some companies buy it, and rush out to the tails.
13. Some of these get burned, and so they backlash against Idiot.
14. Gomes writes a backlash piece.
15. With any luck, we can get the companies to rush back to the center, and start all over again - feeding the economic market for half-witted business books. (not casting aspursions at all business books, many of which are good, just the ones that are the business equivalent of Dr. Phil)

All the while, the market hasn't changed at all. It's a bell curve, same as it ever was. Gomes isn't so much sharp, as just not quite as idiotic as the heart of the pop-business market.

People really have a problem with subtle points

[Jerf]

People in general really have a problem with subtle points. If there isn't an "A IS GOOD, B IS BAD" in there somewhere, they'll simply convert the point into an "A IS GOOD, B IS BAD" point, and to hell with understanding what's actually being said.

The aspect of the "long tail" argument that I think makes sense is not that there will no more hits. In fact, the entire Long Tail argument is really predicated from the get-go that the popularity distribution will remain the same, albeit possibly with a scaled-down top end. (But even a hit that is 25% of the best hit of today would still be a big hit.) The point is that there is an untapped "long tail" that it is now possible to reach economically. The tail has always been there, but it has been difficult to make serving it work economically.

There will still be people who deal only in hits, it's just that there will also be people who deal only in the tail, and the latter may become very large, too, perhaps even Amazon-sized, whereas before this was essentially impossible.

Converting this into a "THERE WILL BE NO MORE HITS (BAD!), ONLY THE LONG TAIL (GOOD!)" is really missing the point entirely, and arguing against that is arguing against a strawman as far as I am concerned. (Of course, arguing against a person who is actually saying that means isn't a strawman.) The ratio may change, in fact I think it will change, but due to network effects, there will always be bona-fide hits.

Price will drive the long tail

[maillemaker]

You cannot have a long tail when the price of every song is the same. When the price of every song is the same, marketing will drive purchase choices.

But when unpopular songs only cost $.05, as opposed to $.99 for the "hits", there will be a lot of people who suddenly are driven, by price, to investigate, and (gasp) might even like, "unpopular" songs.

Even in the record stores, when I used to shop at them, I was always very glad of my affinity for classical music. My music was always in the bargain bin.

Of course all of this is up against the fact that much music, especially the "hits", are available for free on P2P networks.

Steve

Re:Is this news?

[Firethorn]

Yes, they'd lose a lot of customers - but they'd also no longer need as much warehouse space, less labor, fewer handling/sorting machines, etc... etc... The loss in revenue would be balanced by lower costs. It's a pretty complex tradeoff.

And I'd argue that the very vastness of their selection is a major part of what makes people subscribe to them. The loss in customers can easily outweigh the savings of cutting their selection.

While 90% of their traffic may come from 10% of their stock, part of their attractivness is the vastness of their selection compared to the corner video store. If they try to restrict their warehouse to the 'major' 10%, suddenly the corner store is able to offer a much more comparable service. Say the average consumer gets 3 videos a week from the service. That's 156 videos a year, of which a percentage will usually be outside of the major '10%'. 70% from 99.2% of their stock is a major amount. Sure, some titles are real moneymakers, but that's no reason to neglect the rest of their selection.

It's actually part of the reason hardware and department stores stock as much as they do. While most of their business might come from certain areas, it's partially the sheer selection that attracts many of their clients. Remove the selection to the point that the customers can't be reasonably sure of getting what they want and they'll start going elsewhere.