“The Long Tail” is a way of visualizing sales, a chart will have a “big end” where the real popular stuff is, and then “a long tail” running off into the less requested stuff. This is pretty constant across all types of sales, but it tended to be more cut-and-dried in the days of “scarcity distribution” … now, given the on-line possibilities, that “tail” can pretty much go on forever. This stuff is so counter-intuitive that I'll just let Anderson tell you:
He then continues:[Trend-spotting] is what I was doing in January 2004, in the offices of … a “digital jukebox” company. Digital jukeboxes … have a broadband connection to the Internet and patrons can choose from thousands of tracks that are downloaded and stored on a local hard drive.
During the course of our conversation [the CEO] asked me to guess what percentage of the 10,000 albums available on the jukeboxes sold at least one track per quarter.
I knew, of course that [he] was asking me a trick question. The normal answer would be 20 percent because of the 80/20 Rule … That is: 20 percent of products account for 80 percent of sales …
But [he] was in the digital content business which is different. So I thought I'd go way out on a limb and venture that a whopping 50 percent of those 10,000 albums sold at least one track a quarter.
Now, on the face of it, that's absurdly high. Half of the top 10,000 books in a typical book superstore don't sell once a quarter. Half of the top 10,000 CDs at Wal-Mart don't sell once a quarter; indeed Wal-Mart doesn't even carry half that many CDs. It's hard to think of any market where such a high fraction of inventory sells. But my sense was that digital was different, so I took a chance on a big number.
I was, needless to say, way, way, off. The answer was 98 percent.
It's amazing, isn't it?” [he] said. “Everybody gets that wrong.” …
He called this the “98 Percent Rule.” As he later put it to me, “In a world of almost zero packaging cost and instant access to almost all content in this format, consumers exhibit consistent behavior: They look at almost everything.
These economies aren't just in music, either:Throughout the first half of 2004 I fleshed out this research … by then I had some hard data … [Rhapsody] had given me a month's worth of customer usage data, and when I graphed it out, I realized that the curve was unlike anything I'd seen before.
It started like any other demand curve, ranked by popularity. A few hits were downloaded a huge number of times at the head of the curve, and then it fell off steeply with less popular tracks. But the interesting thing was that it never fell to zero. I'd go to the 100,000th track, zoom in, and the downloads per month were still in the thousands. And the curve just kept going: 200,000, 300,000, 400,000 tracks – no store could ever carry this much music. Yet, as far as I looked, there was still demand. Way out at the end of the curve, tracks were being downloaded just four or five times a month, but the curve still wasn't at zero.
This, of course, comes through a filter of consumer action, and this is an interesting point on that:Take books: The average Borders carries around 100,000 titles. Yet about a quarter of Amazon's book sales come from outside its top 100,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is already a third the size of the existing market – and what's more, it's growing quickly.
All of this material comes from the first quarter of the book, with the remainder of it being case studies, additional mathematical analysis, and lots of amazing data. The author looks at numerous industries, media, and institutions, and how moving from the “scarcity” model is changing them. While bits and pieces of this do sound dated 6 years down the road (see the Borders mention above), it is rather forward looking, with a late chapter even projecting what the effects will be when 3D printers become commonplace.The other thing {aside from acting as guides for each other} that happens when consumers talk amongst themselves is that they discover that, collectively, their tastes are far more diverse than the marketing plans being fired at them suggest. Their interests splinter into narrower and narrower communities of affinity, going deeper and deeper into their chose subject matter, as is always the case when like minds gather.
Anderson shows where the business model is heading: “The secret to creating a thriving Long Tail business can be summarized in two imperatives: 1. Make everything available. 2. Help me find it.”, but also notes that “legal restrictions will continue to be the primary barrier to growing the Long Tail”, which is certainly chilling in light of SOPA/PIPA and similar attempts for government meddling in the Internet!
I would certainly recommend The Long Tail to all and sundry … it's a fascinating piece of cultural reporting, with things to recommend it to anybody with interest in media, marketing, the arts, or pretty much anything which is distributed and sold. Again, I found my copy of this up at the dollar store, but it's still in print, so you are likely to be able to find it at your better-stocked brick-and-mortar book vendors. The on-line guys have it at their usual 32% discount from cover price, however, and the new/used channels have “like new” copies for as little as a penny (well, four bucks after shipping's added), so you have a choice of source on this one.

