The Long Tail - Making the World a Better Place

The “Long Tail” - I’ll begin at the end; the “Long Tail” concept is a true embodiment of democracy; a consumer democracy, in which we the consumers have the greatest possible selection to choose from, while not being limited by the offerings that companies want to “feed” us. The Long Tail concept talks about the elimination of hits from being our main consumption source, as more niche products get a stage with the elimination of the wall that the retailers put between consumers and freedom of choice.

As the internet becomes more and more prominent in society, consumers can purchase almost any product if not digitally, via digital retail outlets, which are not limited by shelf space and rental fees. In some cases a product can be produced on the spot, for example custom printing of books. The digitation of products, i.e. Amazon Kindle, which enables us to download books onto digital format, eliminates the need for brick and mortar marketing and distribution. Of course, retailers are losing their competitive advantage as the market relies heavily on digital technologies due to elimination of the fixed costs, which used to be the driver of barrier to entry in many industries, especially in consumer goods industries.

Companies like Google can benefit from the Long Tail concept, as they become brokers in the sale of almost any possible product. Any retailer that pays Google in the CPA pricing model actually pays Google a commission for every purchase the consumer makes. When thinking of music, Napster does not hold shelf space and as it does not actually develop talent and doesn’t pay for recording studios, the company can enjoy the revenue generation, while holding no inventory and not paying rent. Amazon’s Kindle could revolutionize the book industry, as it provides consumers a convenient and inexpensive way to purchase any book immediately, while eliminating the need for shelf space.

When thinking of the artists and authors that are the drivers behind the media industry, there is much more room for unexpected stars to shine, as their voices may be heard. If traditionally, only records, books or movies with blockbuster success, or at least minimum expected sales volume, were actually published, in the digital age, the voices of these creators can be heard cheaply online, with the ability to test the products for free online. Word of mouth marketing plays an important role here, as one satisfied consumer can promote the book of an obscure writer who otherwise would have never been published. The snowball effect can take place and lead to the birth of an online bestseller. This way the consumers, not the publishers, determine the next bestsellers.

Netflix, which is about to drive Blockbuster out of business, using the internet as its marketing extension, is now holding online inventory, which can be downloaded instead of ordered on hard format. What Netflix failed to consider was that as Blockbuster’s competitive advantage was eliminated but the incorporation on video rental services online, the same is happening to it. As the video renal business is not one with high customer captivity, many other player are entering this online market and cutting Netflix’s margins perpetually. If Netflix finds a way to push away competitors like iTunes and other subscription based services, it may exist in this market. I view this scenario unlikely to happen.

In summary, the Long Tail concept thins the fat corporate cats, that have lost their competitive advantage and leaves much more room for alternative products that are now cheaper to market than ever before. The Long Tail is about the consumers gaining the power that capitalism intended them to have from its inception.