Chris Anderson's Long Tail

So I really want to try and explain what the long tail actually is because I think it has so much to do with the phenomenon of web personalization. Anderson has explained it in detail in his book "The Long Tail," but I will try and give you a brief overview.

The long tail is a math term, but Anderson uses it to describe his theory "that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail." He gives a much better analysis of it on his blog.

Here is what a long tail looks like:


The orange part of the chart represents all the less popular, "niche" products in our economy. Before the Internet, it was incredibly hard, and unproductive for companies to target any orange area because the majority of people only wanted what is in the red (the most popular items). Because of limited shelf space, and the cost of storing all these items, companies tended not to keep or sell any of these less popular items -- simply because it was too expensive, and they ended up losing money.

This is where the Internet becomes such a huge platform for change. The Internet allows an almost infinite amount of shelf space, and also allows the cost of this shelf space to drastically reduce (there is no need for actual stores).

As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-target goods and services can be as economically attractive as mainstream fare.

Anderson claims that there are "two factors that create functioning Long Tail markets:

1) massive increase in product variety,
2) massive improvement in findability

Sites like Pandora and LastFM have both of these factors. They offer an enormous amount of variety -- especially with Pandora because they do not recommend songs by genre, they recommend by each song's individual analyses which opens up a huge possibility of recommendations. Both sites offer the findability factor as well. On both sites you can search for a specific song or artist. Again, these two features are incredibly unique to the Internet because on the radio you are limited to a small amount of variety, and you are not allowed to search for any songs, but instead are only allowed to listen to what the radio plays for you.

We see now why sites like Pandora, Last FM, and even Netflix can be essential facets in boosting and maintaining this new kind of economy. I put in a song I like in Pandora and the site recommends several other songs I have never heard (or haven't heard in a very long time), and are probably not even that popular. I end up really enjoying this song, and realize I can't hear it on the radio, nor can I purchase it at my local music store. So I click on the song, and purchase it off Amazon.com -- another site with almost limitless shelf space -- and they have the very CD I'm looking for. Now multiply this event by the thousands and you find that more and more of these "less popular" items are being sold at an incredibly rapid rate. Because the Internet makes it available, accessible, and extremely easy to get exactly what I want -- it has become the essential reason why the long tail has emerged.