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Doubts Multiply About the "Long Tail"
fruey sends in a New Scientist analysis of the many second thoughts about the Long Tail theory. It summarizes four studies that show, in different markets, that the tail is both flatter and thinner than originally supposed, and that blockbusters are not going away in those markets — they are getting bigger. It's theorized that widely used collaborative filtering software is magnifying the winners' share of the various pies, and peer influence is a large contributor to consumer behavior.
What is the long tail? The summary, and TFA (I skimmed it so maybe I missed this) seem to indicate that the long tail theory means the more obscure stuff will be more popular.
The long tail theory is:
1) More obscure stuff will be more profitable (because distribution costs are down - you can distribute electronic goods for practically nothing, and even real goods are more profitable because you can keep them in a warehouse in Wisconsin instead of taking up premium shelf space at a retail store downtown NYC)
2) Because its profitable, people will actually carry it.
3) Because people will carry it, people that actually want it will be able to find it and buy it.
4) Because people can find and buy the obscure stuff they want they'll spend less on the popular stuff they don't want as much. So the blockbusters will lose some of their sales to the obscure stuff.
In reality, this doesn't seem to be happening.
Picture a graph: the y-axis is popularity (i.e. numbers sold) and the x-axis is products (e.g. each point is a book). If all the most popular products (e.g. Harry Potter) are closer to the y-axis, and as you move away from the y-axis popularity decreases, you get a long tail on the graph.
The idea here is that stocking, e.g., a few copies of a LOT of relatively unpopular books, allows you to cater to niche markets and can significantly increase profits compared to only carrying products that are in high demand.
Companies like Amazon are masters at exploiting the long tail. Oh, and here is the original article describing this idea.
Trust me, kids; don't drink and post.