The Harvard Business Review published an interesting article written by Anita Elberse, a HBS professor, in response to Chris Anderson's theory of the long tail, which we discussed in class.
Elberse's research confirms that the tail is getting longer but also shows that it is getting flatter and will be dominated by titles that are mostly a diversion for consumers who are still mostly interested in the big hits. As a result, it is still difficult for content producers and retailers to be profitable by simply focusing on the niches and ignoring the hits.
She offers the following strategic advice for producers and retailers in light of the elongating tail.
For producers:
1. Don't radically shift resources away from a blockbuster strategy towards a product portfolio strategy.
2. Keep costs as low as possible when producing niche goods.
3. When trying to strengthen your presence in digital channels, focus on marketing your most popular products.
4. Leverage your scale to improve online exposure and demand for all your products.
For retailers:
1. If the goal is to cater to your heavy customers, broaden your assortment with more niche products.
2. Keep costs of offering products that will rarely sell low.
3. Acquire customers by using your most popular products.
4. Resist temptation to direct customers to the tail too often or you'll risk their dissatisfaction.
The link to the article is:
http://hbr.org/2008/07/should-you-invest-in-the-long-tail/ar/1
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