about the image above

March 28, 2024

Heard While Outsell-ing: The Long Tail’s 50/50 Proposition

Important Details:  

What We’re Seeing: Where’s Dr. Seuss when we need him? At SIIA’s San Francisco Content Forum on Tuesday, Chris Anderson talked about his industry-shaking notion of “the long tail.” It turns out, though, that the creature he describes is not some beast with a long, straight tail. It’s more like some hump-backed being. The hump would be the sum of the many niches he describes. And as we think about this phenomenon as a hump-backed being, we see its market power a little better than the familiar Excel picture of the long tail trailing off into infinity.

This is what the hump looks like, according to Anderson, editor-in-chief of Wired:

  • Wal-Mart carries about 4,300 music CD titles in an average store. By comparison, Anderson says, Real Media’s Rhapsody carries 1.8 million in its online catalog, and iTunes carries 2 million, out of a total available music catalog of 25 million licensed by BMI/ASCAP. (Peer-to-peer networks, he says, carry about 9-10 million, interestingly.) According to Anderson’s stats, fully 40 percent of music sales now come from stuff not in Wal-Mart’s stores. That’s right, it’s a number now approaching half of music sales (with Wal-Mart as a proxy for terrestrial music retailers).
  • Anderson says the long tail is growing, as consumers get more comfortable with buying on the Web. In books, the numbers are similar, with 25 percent (and growing) of titles sold not available in a Barnes & Noble or Borders – but a click away at Amazon. That number is 21 percent for titles not available at Blockbuster – but very much available on Netflix.

Overall, Anderson says we’re entering an era of 50/50 markets, 50 percent new and 50 percent (older) niche.

His conclusion: “The market for niches is everything but. There are few hits, but many niches … It’s the end of the tyranny of the new.”

Anderson’s “The Long Tail” book is due out in July, being written “in open source” by Anderson in collaboration with those coming to his Web site, thelongtail.com. More than 2,000 people have given Anderson feedback on his writing and research. “I don’t understand why anyone would write a book without offering it on the Web first, to make sure they are getting it right,” he says.

More Anderson nuggets:

  • On ironies: What ironies does he see in his current work? I’ve written “The Long Tail,” and it’s being published new by Disney. I’m a blogger and I work for Conde Nast.”
  • On the leader: “Google is the ultimate long-tail play.”
  • On scale: “In the (Silicon) Valley, we’ve always talked about scaling up. Now we’re talking about scaling down … Google has scaled down to serve small advertisers.”
  • On micropayments and digital rights management: “We need an easier way to clear rights. That’s the block in the process, and we need to solve it.”
  • On non-entertainment content: Referring to older content, like older blog content, Anderson notes that on his own Web site as much as 25 percent-40 percent of traffic goes to posts more than a month old. He believes that the findability of news and information should make older content more valuable, especially content that has passed the “test of time.”
  • On margins: “Not only is there demand for the old, but the margins get better,” he said, pointing to the fact that acquisition costs of content decline more rapidly than the prices at which the content can be offered.

In Outsell’s Opinion: Outsell’s business-to-business (B2B) Web e-commerce research (HotTopics: Web E-Commerce For B2B Publishers And Information Providers – New Channel Demands New Ways Of Thinking) confirms the notion that the shelf life of information products is extended on the Web. Our analysis last year of a representative sample of 24,970 e-commerce transactions showed that a full 32 percent of the content being purchased via the Web was over 18 months old.

For all publishers, and particularly for news as this sector works to reinvent itself, it’s worth taking a closer look at thelongtail.com, and using it to feed an internal discussion to effect change. Publishers will need to fight their very DNA in thinking through this opportunity. That DNA drives everyone in publishing to push hard toward a deadline, creating the best possible newspaper or magazine – and then moving on immediately to the next one, tossing aside what it has just produced. Now the industry needs to inventory its assets, figuring out what’s in the long tail data libraries of news and information publishers and what can be pulled out and shined off to find new markets.

Implications: