Friday, July 4, 2008

New Long Tail Debate

If you read this blog a lot (ad thank you for those of you who do!), you know that I have been following the work of Chris Anderson for a while - his Long Tail theory and the newer Free movement.

Chris recently posted a rebuttal to a Harvard Business Review article by Aniti Elberse criticizing some aspects of the Long Tail theory. Anti is a Professor of Marketing at Harvard Business School.

The debate boils down to the fact that Elberse's analysis of new data found that the Long Tail is increasingly flat (i.e populated by less and less popular titles as inventory grows) and that consumers, even consumers in the Long Tail, prefer the 'hits' more (the popular stuff).

Both to of these findings seem pretty obvious to me. Online retailers are always going to keep adding inventory as long as inventory costs are close, if not at, zero. And consumers will always tend to gravitate to popular titles - at some point. Popularity is multiplicative. The more popular something becomes, the more popular it becomes.

However, I believe she misses the point of the original Long Tail argument when she says that these results undermine the importance of the Long Tail as a business phenomenon.

The Long Tail is an observation of optimal product portfolios for two very different delivery mechanism. The two things that make the Long Tail work are close to zero inventory costs and a system for recommending and searching content. Both of these facts predict her findings. More inventory is inevitable, and with recommendations still playing a big role, popular products are very likely to remain popular.

Anderson's theory was never about the death of the 'hit'. It was about the rise of the 'tail'. These things aren't mutually exclusive.

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