“The Long Tail”

by Chris Anderson (Hyperion New York 2006)

This book explores one of the most revolutionary developments of the 21st Century. The Internet was a product of serendipity and its development is now spreading in ways which are surprising and often overwhelming. The author, Chris Anderson, is editor-in-chief of “Wired” magazine and ideally placed to recognise the potential impact of broadband and limitless electronic storage on consumer markets. As he points out the online revolution is setting economics on its head – no longer is it conditioned by scarcity and alternatives but is shaped by abundance and limitless choice.

“The Long Tail” of the title is the 80% of factors which Pareto’s Law discounts. The “80/20” rule implies that 80% of value is concentrated in 20% of items in most product ranges. This 20% of items has been the focus of marketing effort in living memory and has comprised the major part of inventories of most goods. In marketing the focus is often narrower, often on the Top Ten or on obvious “hits”, to which consumers can be driven. Emphasis on driving “hits” distorts the economic return of all market participants but also forces consumers to share tastes which may not be their natural preference.

The broadband revolution has now begun to make available online a range of choice which shops do not have the space to stock. Traders like Amazon and eBay can offer many hundred times the range held by physical merchants. This is beginning to restore balance to markets, raising interest (and sales) for niche lines (“The Long Tail”) and reducing the preponderance of “hits”. Growth in the niches is accelerating and their sales potential is many times larger than that of the 20% “hits”. Chris Anderson shows in fascinating detail the development of “long tail” markets in music, books, videos and other volume consumer products and speculates that improving technology will enable physical goods to be atomised, stored in bits and transmitted anywhere. Pure “beam me up Scotty”! This sounds fanciful but the impact of eBay would have seemed unrealistic twenty years ago. “The Long Tail” is a very important book. Chris Anderson spent two years researching it, plus his consumer market experience accumulated over much longer time. The book explores every aspect of consumer aspirations and how new technology has opened the door to their fulfilment. It is very thoroughly researched, has many compelling case studies eg Lego and Google and has an engaging and understated style. It is important but extremely readable. Once you have read it you will see the world and living in multiple new dimensions.

Adrian Davies
15th July 2007