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The Sometimes Fallacy of The Long Tail

Posted by Hemos on Mon Aug 07, 2006 11:31 AM
from the sometimes-the-snake's-head-is-what-matters dept.
The Internet News
There's been a lot of talk (maybe too much talk, to paraphrase Bono) about The Long Tail and how it changes everything about what people consume, how hits are made, what people want to hear, how everything big is small again -- but people have taken that perhaps too far as Lee Gomes contends in a recent blog post about hits. Lee's piece is well thought-out, and I think raises a very valid point that whereas there is value in the Long Tail idea, sometimes people take it too far and that "Hits" still count for a lot. His earlier piece is a more direct critique of The Long Tail and worth reading as well; we covered that piece about the Long Tail a couple weeks back.
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[+] 'Long Tail' May Not Wag the Web Just Yet 132 comments
Carl Bialik from WSJ writes "Expanding on an article he wrote in 2004 (and discussed on Slashdot), Wired magazine editor Chris Anderson argues in his best-seller 'The Long Tail' that the web is changing commerce from a hit-driven business to one focused on niches. But Wall Street Journal columnist Lee Gomes questions Anderson's data, and adds, 'I don't think things are changing as much as he does.' Gomes writes, 'At Apple's iTunes, one person who has seen the data -- which Apple doesn't disclose -- said sales "closely track Billboard. It's a hits business. The data tend to refute 'The Long Tail.' " ' On his blog, Anderson responds that Gomes 'stumbles over statistics and more, and in the end simply makes a muddle of what might have been an interesting debate over the magnitude of the Long Tail effect.'"
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  • Is this news? (Score:5, Informative)

    by zanderredux (564003) * on Monday August 07 2006, @11:36AM (#15859612) Homepage
    He's just affirming that the 80/20 rule STILL WORKS PERFECTLY.

    Bad news for hype-driven marketing and economics people, but Pareto got it right in 1897!

    • Re:Is this news? (Score:5, Interesting)

      by 2nd Post! (213333) <`ten.llebcap' `ta' `raebdnug'> on Monday August 07 2006, @11:47AM (#15859690) Homepage
      The interesting part is that the linked article 0.8 percent of NetFlix inventory generates 30% of the rentals.

      That means of course that the remaining 99.2% of the inventory generate 70% of the rentals. If they "got rid" of this catalog they would lose a lot of customers.

      Of course the data is very coarse, as Spider-Man II happens to fall into the 99.2% category. They need to start analyzing in terms of percentiles; 0.8% generates 30%, 1.5% generates 40%, 8% generates 50%, 17% generates 60%, 42% generates 70%, 78% generates 80%, etc, all the way up to 100% of the rentals.
      • I would just expect it to be a hyperbolic distribution. The best renting item is rented about twice as much as the second, about three times the third one, about four times the fourth one etc.pp. (Zipf's Law [wikipedia.org]). For Netflix with the 60,000 items inventory it would mean thus: Best item rents out 60,000 times (in a given time...), second best 30,000 times, third best 20,000 times etc.pp. until the last one, which was rented out on one single occasion.

        Using this we can estimate, that the first 50 items are good
      • This is a good point, but I think people are looking at this from the wrong "end" of things.

        It's the 'new hits' that are expensive to maintain in a catalog like Netflix's; the 'long tail' is cheap.

        Really the economic consideration is "do I have to have Spiderman II in order to stay in business?" And it would appear that the answer, for now, is a resounding "yes."

        The reason that the hits are expensive is because each one is like a pig going through a python. For the first week that a big hit movie is out, re

        • Yes, they'd lose a lot of customers - but they'd also no longer need as much warehouse space, less labor, fewer handling/sorting machines, etc... etc... The loss in revenue would be balanced by lower costs. It's a pretty complex tradeoff.

          And I'd argue that the very vastness of their selection is a major part of what makes people subscribe to them. The loss in customers can easily outweigh the savings of cutting their selection.

          While 90% of their traffic may come from 10% of their stock, part of their att

    • I don't see how that's "Bad news for hype-driven marketing and economics people"

      It's great news for them. It means that if they build up enough hype, whatever they are selling will become part of the 20% of products that generates 80% of sales.

      Anyways, the long tail is only relevant to the brick and mortar world if the store owner can afford to keep lots of slow selling product in stock.
    • Yup, Pareto trade off space is great. I use it to detect neucleotide sequences.
    • These are all results of power laws [arxiv.org]. The fat (Pareto) tail and the 80/20 (Pareto) law are the same thing.
    • As an economics person who uses Paretian distributions to model everything, this isn't bad news at all. It's not news, and it's good that it keeps us economists employed.

  • Bono (Score:4, Funny)

    by mnemonic_ (164550) <<ude.hcimu> <ta> <cemaj>> on Monday August 07 2006, @11:39AM (#15859635) Homepage Journal
    I was pro Bono, until he broke up with Cher.

  • Talk about IRONY (Score:5, Funny)

    by FlyByPC (841016) on Monday August 07 2006, @11:40AM (#15859650) Homepage
    "The Long Tail" is itself a bestseller?
    ...so exactly what are we to learn from that -- does that prove it right, or wrong?
    • That's a good and funny observation. The Long Tail theory doesn't deny that bestsellers will remain a major piece of the market. It's just pointing out that there are ways to make money elsewhere. He's talking about flattening out the hump, but not removing it entirely.

      So ultimately it's evidence for his theory, not against it.
    • But when I see the "Long Tail" in print, if I read it too fast I misread, "Long Trail Ale" and wonder where the "Ale" went.
    • We'll know in a few years. If it still sells a few hundred copies per year a decade from now, in addition to all the other books that would normally go out of print in that time, it may prove one aspect of the thesis. If it's still available on print-per-order, then he would have disproved himself.
      • What would he have disproven? One of the facts that Anderson cites in his book is the "99.8% rule" -- that 99.8% of books sell at least one copy per quarter, 99.8% of DVDs rent at least once per quarter from NetFlix, and so on. Print on Demand would have an effect on the sample size, but if the 99.8% rule holds, there would probably be someone somewhere who bought a copy of Anderson's book at least once per quarter.
  • I think the value add of the long tail is that the concept of "Hit" changes.

    Where in a brick and mortar store, which suffers from space constraints so the ROI for any give stock has to be fairly high, the internet shines because the space constraints are looser and therefore the ROI for any given stock can be less and STILL be profitable.

    If a Tower Records can only carry the top 10% of goods to be profitable, Tower Online can afford to carry the top 20% of goods and still be profitable. The top 10% will still sell, as always, but the next 10% may contribute up to 30% of the profits despite only being in the second percentile.

    As efficiency increases, then each percentile after that becomes "more" profitable, relatively. If Best Buy online can afford to carry the top 30% and remain profitable, with the third percentile adding 11% of the profit and the second percentile adding 25% of the profit, they will sell more, necessarily, than Tower.

    So all things being equal, the store with more inventory can sell more. The store with greater efficiency can afford to carry more.
    • Not only that, but if consumers realize that a store is more likely to carry what they want on a regular basis -- and offers frequent-buyer perks -- then that could definitely build customer loyalty.

    • Re:Hit's don't go away, of course (Score:5, Informative)

      by cdrguru (88047) on Monday August 07 2006, @11:55AM (#15859747) Homepage
      Yes, but the problem is focus, promotion and marketing. You are assuming the reason things sell is they are offered. Most people in the consumer space have quite a different view - things sell because they are promoted. Just having something sitting on the shelf doesn't do much for it. Having it occupy a favorable place in the store (on an end, for instance) will significantly increase sales. People see it. They buy it.

      The problem with the online world is the "favored" positions are incredibly small. Additionally, having a larger catalog just means that when someone searches for something they are bombarded with many, many more possibilities. This actually deters people from making any choice at all. So, in a somewhat counter-intuitive way, having more potential choices reduces overall sales.

      There are some that can say that everything that is known about consumer marketing is utterly false in an online environment. So far, the results are mixed from what I have heard. We are certainly not seeing the sort of abandonment of B&M stores that was touted as "just around the corner" in the late 1990's. That might happen - or it might not - but it is likely to take at least a generation before it does. Old people, even those using the Internet, are very unlikely to abandon shopping habits formed over decades.

      This means that for the short term, most of this "long tail" stuff is nonsense.
      • My point still stands; you can now affordably market MORE than you could before. In an online world, with fewer distribution/physical costs, prices can go down,, sales may go up, and therefore profits may exist to be tapped.

        Google, for example, is a solution to the problem of "favored" position. Rather, search is the answer. Instead of wandering around Target's Home, Beauty, Electronics, and Appliances sections looking for an electric razor (guess where I found it!), I just type in "razor" at Target.com and
      • The Long Tail is not about "choices" and option paralysis. The Long Tail theory assumes you know what you're looking for! The demand has always been built in - the problem has been supply.

        The Internet's low barrier to entry means that the sheer volume of total supply has increased dramatically. Before the Internet, there was a large section of demand for obscure and otherwise "non-hit" material that could not be met by traditional brick and mortar stores. Now these needs can be met, without sacrificing any
        • There is nothing quite like this in B&M stores.
          Never heard of a Bloomingdales personal shopper eh? (Which just refines the point - the marginal cost of doing that kind of personalization is high, and thus requires a high profit. Bloomingdales can afford to do so...and still makes a killing)
    • And, with accurate forecasts, one's inventory levels are also managed appropriately so that one can carry a very few of the items at the end of the tail such that the next 11% of the profit is gained through only 11% increase in inventory. The incremental cost of that next level of profit is reduced by as much as you gain. So, keeping 100% of the profitable inventory is the way to go.....once inventory is no longer profitable, liquidate it and move on.

      Layne
  • most people behave in flocks, a few don't

    that's it

    it's not like the internet is going to come along and change simple human psychology:

    1. the internet is not going to make less people behave in herds

    2. the internet isn't going to make more people behave independently

    take an old concept, spruce it up with a buzzword, and people think gold has just been discovered. pffft

    perhaps the most ironic thing about the idea of the long tail is that the concept itself is now a mass media driven success story with a herd-like following
    • 1. the internet is not going to make less people behave in herds

      2. the internet isn't going to make more people behave independently

      No, but the internet can enable you to control those herds. I can't remember the exact term, but I marketing and PR gurus often targets the social "herd leaders" in viral marketing to be more efficient.
    • I don't know that the breakdown is necessarily on a per person basis. Individuals sometimes behave in herds and sometimes independently, depending on the situation. Personally, I would love to discover new and wonderful independent artists. But I generally don't have time to listen to hours of crap to find the gems. It's a better use of my time to listen to something someone else also likes and has recommended.
      • someone truly independent could care less what the flock thinks

        being emotionally pegged to the reactions of the flock, whether positively OR negatively (fear/ anger/ hate/ disgust), means you aren't truly independent of the flock
        • Does "true independence" even matter? It is not necessary for someone to be "truly independent" in order for his point to be valid. The simple fact that people would consider a purchase that can be made in relative anonymity when they would not otherwise speaks to this.

  • You need the whole tail... (Score:4, Funny)

    by sweetnjguy29 (880256) on Monday August 07 2006, @11:48AM (#15859696) Journal
    If you want to stretch the analogy to its logical limit, it shows that a business needs a solid base of popular sales and a ever expanding long tail of indie, cult, and oldie stuff that serve as loss leaders and marginal profit makers. You can have a successful business with a well connected short tail, but a fabulous business needs a longer tail. If the end falls off, you can still be ok! But if you loose the base of the tail, well...all you have is a big ass :-)

    • ...it shows that a business needs a solid base of popular sales and a ever expanding long tail of indie, cult, and oldie stuff that serve as loss leaders and marginal profit makers.

      A lot of people are just not getting this. You can make a certain amount of money selling the top hits and your business can be profitable in the current market. If you carry less popular content as well, it will sell more poorly, per title. If it costs you a significant amount per title, then this is poor business. The issue

  • So what does this imply to the blogosphere? (Score:5, Funny)

    by bunions (970377) on Monday August 07 2006, @11:53AM (#15859730)
    If folksonomies aren't tagged by the technorati, who or what will linkroll the mashups? The impact on the remixability of emergent systems will likely be severe.
  • I know the language the words are written in, but strung together like that they make no sense.

  • Area under the curve matters, not tail length (Score:5, Interesting)

    by Animats (122034) on Monday August 07 2006, @12:23PM (#15859900) Homepage

    If anyone talks about the "long tail", ask them if they know how to integrate the area under the curve. The simplest number for evaluation purposes is the value for which half the area under the curve is before that point, and half is after. What's that number for movies? For books? For audio CDs? For iPod downloads?

    Netflix says that 30% of rentals are from the top 50 films, so the halfway point is probably below 100.

    This is a killer issue for companies that have huge hardware inventories. Consider Digi-Key [digikey.com]. They have the broadest inventory of electronic parts in the industry, with over 70,000 parts. Which is a big win for them, because you can usually use them as your only supplier. So there's an Internet-based company that really does profit from the "long tail".

    Digi-Key doesn't get much attention as an Internet company, but they're one of the most successful ones. They had online ordering early, and it works really well. Not just the web front end, which looks boring but has what users need, like the ability to search by component parameters. They have a near-complete collection of online data sheets. When a part you've ordered previously is about to be discontinued, you get an e-mail, so you can order a final supply before it goes away. And they have an incredibly effective order fulfillment operation. Orders entered before 7 PM (yes, PM) Central time ship the same day by FedEx. They actually do that, consistently. When you order from DigiKey, you get a confirmation e-mail when the order goes in, and another when it ships, with the FedEx tracking info. The shipping confirmation often comes in within fifteen minutes of placing the order. Now that's operating on Internet time. And that's for orders which might contain twenty different electronics parts in small quantities.

    That's a real "long tail" company.

  • Do I Understand This? (Score:5, Insightful)

    by Bob9113 (14996) on Monday August 07 2006, @12:24PM (#15859911) Homepage
    Let me see if I can break this down...

    1. Mass media enables mass marketing.
    2. Mass marketing leads companies to target "the sweet spot."
    3. This pays off, and so reinforces the idea.
    4. Companies become more and more focused on the center of the market.
    5. The tails become under-served, the center gets over-served.
    6. White Stripes, Pulp Fiction, Clerks, et al. do it for the artistic vision.
    7. Hungry tails turn White Stripes et al. into overnight sensations.
    8. Meanwhile, companies continue to pump the center.
    9. Overfed center can't consume all the mass-market product.
    10. Idiot misinterprets this as the the curve flattening, rather than companies over-serving one market and under-serving another.
    11. Idiot publishes a pop-business book, which appeals to the mass of idiots that make up the heart of the market.
    12. Some companies buy it, and rush out to the tails.
    13. Some of these get burned, and so they backlash against Idiot.
    14. Gomes writes a backlash piece.
    15. With any luck, we can get the companies to rush back to the center, and start all over again - feeding the economic market for half-witted business books. (not casting aspursions at all business books, many of which are good, just the ones that are the business equivalent of Dr. Phil)

    All the while, the market hasn't changed at all. It's a bell curve, same as it ever was. Gomes isn't so much sharp, as just not quite as idiotic as the heart of the pop-business market.

  • People really have a problem with subtle points (Score:5, Insightful)

    by Jerf (17166) on Monday August 07 2006, @12:25PM (#15859913) Journal
    People in general really have a problem with subtle points. If there isn't an "A IS GOOD, B IS BAD" in there somewhere, they'll simply convert the point into an "A IS GOOD, B IS BAD" point, and to hell with understanding what's actually being said.

    The aspect of the "long tail" argument that I think makes sense is not that there will no more hits. In fact, the entire Long Tail argument is really predicated from the get-go that the popularity distribution will remain the same, albeit possibly with a scaled-down top end. (But even a hit that is 25% of the best hit of today would still be a big hit.) The point is that there is an untapped "long tail" that it is now possible to reach economically. The tail has always been there, but it has been difficult to make serving it work economically.

    There will still be people who deal only in hits, it's just that there will also be people who deal only in the tail, and the latter may become very large, too, perhaps even Amazon-sized, whereas before this was essentially impossible.

    Converting this into a "THERE WILL BE NO MORE HITS (BAD!), ONLY THE LONG TAIL (GOOD!)" is really missing the point entirely, and arguing against that is arguing against a strawman as far as I am concerned. (Of course, arguing against a person who is actually saying that means isn't a strawman.) The ratio may change, in fact I think it will change, but due to network effects, there will always be bona-fide hits.

    • People in general really have a problem with subtle points. If there isn't an "A IS GOOD, B IS BAD" in there somewhere, they'll simply convert the point into an "A IS GOOD, B IS BAD" point, and to hell with understanding what's actually being said.

      By "people in general," of course, you mean people not in the long tail, right? The long tail people get the subtlety, it's just that it seems as time goes on that the long-tail-of-those-who-get-subtle-points (LTOTWGSP) is becoming a short stubby tail.

      Either th

      • But more likely, those that serve everyone will continue to dominate.

        I agree. Ultimately, this is why I think the "Long Tail" stuff is more sociology than business plan; starting a business with the express purpose of serving the Long Tail is still setting yourself up for failure. What will happen is that Amazon will use the power of the Internet and computers to eat your space, and you won't have the resource to fight them or do any better.

        It's good sociology, and it's worth thinking and talking about, bu

  • Price will drive the long tail (Score:4, Insightful)

    by maillemaker (924053) on Monday August 07 2006, @12:49PM (#15860087)
    You cannot have a long tail when the price of every song is the same. When the price of every song is the same, marketing will drive purchase choices.

    But when unpopular songs only cost $.05, as opposed to $.99 for the "hits", there will be a lot of people who suddenly are driven, by price, to investigate, and (gasp) might even like, "unpopular" songs.

    Even in the record stores, when I used to shop at them, I was always very glad of my affinity for classical music. My music was always in the bargain bin.

    Of course all of this is up against the fact that much music, especially the "hits", are available for free on P2P networks.

    Steve

  • The long tail and eMusic (Score:5, Interesting)

    by Alioth (221270) <no@spam> on Monday August 07 2006, @01:10PM (#15860219) Journal
    It's funny then how eMusic, despite only exploiting the 'long tail', is the number 2 music store behind iTMS - easily beating all the online music stores selling the popular stuff. Of course, that might have something to do with eMusic being the only music store other than iTMS which sells music that will play on an iPod.
    • Parent is interesting...

      One long-tail-interesting aspect of eMusic is that the front page (the "browse" page) isn't smothered in the latest top-ten commercial chart-climbers... rather, the front page is covered in a mixture of artists and genres. eMusic can be pretty picky about what music they accept, and it shows... often as not, the music is excellent and worth a listen. iTunes' "front page" tends to be mostly chart-climbing-commercial music (not necessarily a bad thing, just an observation - lots of f

  • Choice and Overhead (Score:3, Interesting)

    by mugnyte (203225) on Monday August 07 2006, @01:10PM (#15860220) Homepage Journal
    I was surprised to see that folks stuck to hits when Rhapsody scanned their usage lists. I think many sites are trying to entice folks to follow the "sounds like" and "genre" trails for new music, but in the end Promotion does indeed play a role.

      Promotion on the internet may best come from "word-of-mouth" sources, where hot links of the week propogate through blogs and link-lists and such. The SNL rap-spoof [wikipedia.org] is just such an example from earlier this year. Every past popular web meme [wikipedia.org] is just such an example. I think podcasts(audio & video) are underrated, since the future of web may be to "leave the chair" and use portables to continue the experience.

      Perhaps in the future a portal will present a Busker-style downloadable playlist of music, completely copyright free "for personal use and sharing" - and then simply ask for donations that go directly to the artist. Popularity and payment mixed into one. For the large portion of music history, this is how such performance careers worked anyway. Then at least a band could make use of the File Sharing networks as a promotion layer, rather than constantly having them viewed as evil.

      Like the Long Tail purports, lowest overhead can make the most profit from the smaller market segments. I cannot see a lower operating margin than online distribution from the artists themselves. The sacrifice is promotion: Labels fight hard for airtime, shelf space, billboard pasteup and DJ chatter. There is a strong argument that "the music world is full of crap and the public wants someone to cull the list for them." But perhaps if these concepts of web meme, genre/artist linking and a modern payment system all converge, things will change.

  • Long tail enthusiasts: The integral from just below the median to infinity is more than 50%!
    Long tail rejectionists: The integral from zero to just above the median is more than 50%!

    Will we ever know who is to triumph?!?!

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