The Long Tail Buchzusammenfassung - das Wichtigste aus The Long Tail

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Zusammenfassung von The Long Tail

Name: The Long Tail
Rating: 4.3 (24 reviews)
Author: Chris Anderson

Chris Anderson

Why the Future of Business is Selling Less of More

4.3 (24 Bewertungen)

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What’s in it for me? Find out why niche markets are the future of commerce.

For a long time, only the products that made the most money were marketable and popular. Then the internet came along, which brought about the slow, gradual decline of “the hit.”

From author Chris Anderson, former editor of the tech magazine Wired, The Long Tail identifies a new paradigm of the online entertainment market: the “long tail” of consumer demand. Anderson argues that satisfying the various and specific needs of several well-defined niche markets can bring just as much, if not more, success to a company than aiming to attract the widest possible audience to a single product.

In these blinks, you’ll learn exactly what the “long tail” is and what it means for the future of online retail. You’ll find out how the inexpensive consumer PC has been a driving force behind the superabundance of content in the world. You’ll also discover how online retailers exploit the internet to increase their company’s odds of success, such as buying keywords for Google Ads at auctions.

Finally, you’ll learn how, in the current online retail climate, it’s easier than ever before for a company to not just survive, but thrive.

The monopoly of the hit is over. Welcome to the long tail of demand.

In the world of online entertainment, a market of niche goods in small but steady demand rivals a market of hits.

There’s an established demand curve in any industry: the most-valued products generate the highest demand (the head of the curve) and the least-valued generate the smallest (the tail).

We’re inclined to think of bestselling books and blockbuster movies – goods at the head of the curve – as the prime sources of profit. But, in the present economy, businesses can thrive by offering a large selection of goods that appeal to many small groups of people.

In other words, nowadays businesses can succeed by using the strategy of the “long tail.”

The fact is, when it comes to total sales in an online market, a sufficient number of niche titles can compete with the best sellers.

For example, Amazon’s Jeff Bezos recognized the potential of the internet to offer an unprecedented selection of books. Amazon offers approximately five million books on its website, whereas the largest superstores can only carry around 175,000. In fact, Amazon’s statistics reveal that books that aren’t available in the average bookstore make up over 30 percent of the existing market.

Why?

In short, popularity is no longer necessary for profitability. In the online market, to sell a niche product is just as valuable as selling a “hit.”

Consider the online music-streaming service Rhapsody. It offers more than 4.5 million songs and each track – regardless of whether it’s one of their top 900,000 – gets streamed at least once per month. Since every track costs the same price and generates the same profit, it doesn’t matter to them whether 20,000 people buy the same track or whether each member purchases whatever tracks they like.

And, like Amazon, a huge number of Rhapsody’s total sales (45 percent) come from tracks that aren’t also sold in traditional offline retail – suggesting that there’s a demand for a bigger selection.

That’s the essence of the “long tail” concept: a huge number of relatively unpopular products can rival a small number of very popular ones.

Making the means of production available to everyone generates more content and makes the tail longer.

One factor determining the relation between supply and demand is the amount of content that’s available. The more content released on the market, the longer the tail will be, and the digital age we live in has made creating and releasing content possible for almost everyone.

Indeed, the ubiquitous PC has enabled most people in the Western world to record and produce their own music, make a film or create an ebook. For example, in 2004–2005, the number of albums released increased by a staggering 36 percent, and more than 300,000 free tracks were uploaded to MySpace.

Making the means of distribution available to everyone allows for access to more content and fattens up the tail.

It doesn’t matter how much content there is in the world; finding what we’re looking for isn’t always easy.

Nowadays, distribution needs aggregators, i.e., companies like Amazon or eBay that have access to a massive amount of goods and can make them easy to find and buy. The more ways there are of searching for and finding niche products, the more of them can be sold.

Helping customers filter their options enables them to find and buy what they really want.

With today’s superabundance of niche products and content, we need help in finding the content and products that suit our individual tastes.

That’s where filters come in.

Shelf-space is costly, forcing businesses to focus only on bestsellers – which means customers’ interests are neglected.

Unlike traditional stores, online businesses are able to focus on the long tail because they don’t have to worry about the usual overhead costs of retail – like shelf space.

In fact, shelves carry a lot of hidden costs. The average square foot of shelf space needs to generate between $100 and $150 per month for a company to break even.

Internet-based distribution has lower inventory costs and can thus cater to individual needs.

Because the internet can provide unlimited “shelf space” and a superabundance of choice, it’s primed to give rise to long-tail economics.

Unlimited virtual shelf space means a business needs a lower profit margin to break even or make money. For instance, movie studios charge companies offering digital subscription services the same acquisition costs per title as they do per DVD in physical rental stores. Yet, unlike those stores, digital subscription services don’t have to pay $22 per year to offer a title so they can continue to offer it indefinitely.

From toys to advertising: niches and long tails exist in a lot of markets, not only entertainment.

Most of the examples so far have been from the entertainment market. But the long tail as an economic concept, although prevalent in the media and entertainment markets, can be extended to most of the world’s industries – among them, manufacturing and advertising.

First, let’s take a look at the manufacturing industry and, more specifically, at LEGO. LEGO takes advantage of the long tail because it caters to niche markets and encourages users to create their own products. Its online store offers more than one thousand products, 90 percent of which aren’t available for purchase in traditional retail stores.

To use the long tail in your own business, maximize your offer and help customers find what they want.

Now that you’ve discovered the benefits of the long tail, you’re probably wondering how you can incorporate it into your own online business strategy.

To take advantage of the long tail, the first step is to centralize and expand your inventory to reduce the costs of making so many products available.

A niche marketing campaign is more effective than a traditional one-size-fits-all advertisement.

Long-tail marketing targets niches rather than the largest possible audience. Because of this, it’s able to appeal to potential customers in ways that are specific to those customers.

One such marketing strategy is consumer-generated advertising, which can help to define a brand’s identity and stimulate a dialog around it.

Final Summary

The key message in this book:

The future of culture and commerce is in niche products with a small but specific demand. In short, the future is in the long tail of the demand curve. Focusing on the long tail is a strategy that the most successful companies of the last decade all have in common. The monopoly of the hit – the wildly popular product with the broadest audience – is a thing of the past.

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Worum geht es in The Long Tail?

The Long Tail challenges existing notions of the market and the entertainment industry by looking at the massive influence of the internet on the economy. Due to new modes of content creation and distribution, it can be more profitable to offer a large number and wide variety of products that appeal to niche consumer groups rather than one certain “hit,” e.g., a blockbuster or bestselling book.

Wer The Long Tail lesen sollte

Anyone who deals with online sales
Anyone interested in alternative economic theories
Anyone working in the media or entertainment industries

Über den Autor

Chris Anderson is an author and entrepreneur. Previously, he was the Business Editor at The Economist and Chief Executive Editor at Wired magazine. In addition to The Long Tail, Anderson has also published Free: The Future of a Radical Price and Makers: The New Industrial Revolution.

Kategorien mit The Long Tail

Marketing & Vertrieb Unternehmertum Wirtschaft

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