Some days ago I was reading a technical white paper when I came across an expression I had never heard before: “the long tail”… what is it?
The “long tail” was used for the first time by Chris Anderson in an editorial that appeared on the Wired magazine on October 2004; it was about the transformations that Internet and the digital technologies are producing to the entertainment market. The success of this article induced the author to publish a book on this topic in 2006 (“ The Long Tail: Why the Future of Business is Selling Less of More”).
On the other hand, the traditional ways of content distribution are limited by the physical world: there are limitations in the shops’ space (it’s necessary to sell enough copies of any book, CD, etc. in order to pay for the space it occupies), limitations in the reachable audience (any cinema or shop “attracts” consumers from a restricted area), limitations in the frequencies available for radio or TV stations, etc.
But now things are changing.
The demand curve is therefore characterized by a “peak” that corresponds to the few hits, and a long “tail” for all the other titles: this is the “long tail”. A surprising feature of this tail is its size: the market of the “misses” is usually larger than the market of the “hits”! This is why on-line services like Amazon are so successful; Amazon, in fact, gain most earnings from its “low success” titles, the ones that a traditional bookstore do not have on its catalogue.
For everybody who sells goods or mass services, the future is in the “long tail”, in the capability to address this “mass of markets” in an efficient and profitable way. These concepts can also be extended beyond the entertainment market, e.g. to the telecommunication services market (the one I am interested in); in this moment, in fact, service providers are transforming (or will soon be obliged to do so) in order to face competition coming from new parts (Skype, Google, etc.). And one of the new revenue sources that have a high potential is the introduction of innovative “niche” services, which address the needs of the long tail.