Every once so often a book comes that aptly captures the underlying logic of a great revloution, be it economic, socio-cultural or political. The emergence of internet and an internet based 'e-economy' is revloutionising both the economic and socio-cultural landscape of our times. This book by Wired editor analyzes this phenomena and seeks to explain the fundamentals of this emerging play.
Long Tail refers to the extraordinarily lengthy tail of the consumption pattern that any product has on the web. This can be explained by looking at the fact that almost all of the millions of titles, books and other products available on e-tailing sites have been bought, downloaded or used at some time or the other. The standard retailing template of 80:20 (80% of the sales coming from 20% of products) has been diluted. Today the bottom 80%-90% of products on e-tailing sites provide a significant chunk of the revenues (around 25%) and still more of the profits (nearly 33%).
The author claims this has come about primarily because of three reasons,
1. Democratization of tools of production: Since PC's, low cost cameras, camcorders, mp3 players are available to the masses, just about everyone can become a content producer. This has led to enormous amounts of arbit content been available everywhere.
2. Democratization of tools of distribution: The presence of internet in almost all homes (in atleast the developed economies) has made distribution of this content easily possible. Internet, in the words of the author, makes it cheaper to reach more people, effectively increasing the liquidity of the market in the tail.
3. Connect supply and demand: Sites like Google, YouTube, Metacafe, Flickr, Blogger and others have led this democratization from the front. With the emergence of social networking sites like these, consumers can talk to each other and discover mutual tastes and interests and form narrower and narrower interest groups leading to the proliferation of niche communities, interest groups, music and products.
In simple words, the secret of creating a thriving Long Tail business according to the author is,
1. Make everything available,
2. Help me find it.
Chris Anderson first explored this idea in an article in his magazine Wired. The book is written in an extremely luciid, easy to read manner with examples from across the industry. Explaining a phenomena, that is just about starting is a tough thing to do, but the author has done it remarkably well. Anyone with an interest in contemporary economics or the impact of web on our lives should read this.
