Re(tail)

Chris Anderson outlines that the Internet is changing the way how business is done. I mean, it is undeniable how the Web has truly made an impact to the economy. So a general description of the ‘long tail’ by Anderson,

In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare.

As he suggests, we are not all as mainstream as we thought. I might find myself spending countless sleepless hours on YouTube just because I clicked on the next recommended video, and I only stop because I realize I am in the weirdest parts YouTube where it is filled with nyan cats, Barney the purple dinosaur, and Zach Galifianakis at the ‘Suggested Videos’ sidebar. So, there is incentive for businesses to cater to the ‘long tail’, with new distribution channels like digital marketing and peer-to-peer downloading. I agree on his point that many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching.

But there is a catch to it, in order for the ‘long tail’ theory to ‘work’, niche markets have to outdo the hits. That is statistically impossible. Sure, everything sells at least once, but is it financially viable? Anderson admits,

“The further down the long tail, the more the need to keep the day job.”

The 80/20 rule, or Pareto’s Principle, applies to most of the statistics in Anderson’s book, which states that 80% of revenue generated in the market are from 20% of the products available. I could go on, but this requires another post.

Here is a video for insight on the tail,