The Long Tail: Why the Future of Business Is Selling Less of More

The Long Tail: Why the Future of Business Is Selling Less of More
By Chris Anderson
238 pages

In this book, Chris shows that the future of business does not lie in hits - the high-volume end of a traditional demand curve - but in what used to be regarded as misses - the endlessly long tail of that same curve. As our world is transformed by the Internet, so traditional business models are being overturned and new truths revealed about what consumers want and how they want to get it.

In this book, Chris offers a brillant and timely look at the future of the future. Are you still doing what were working many years ago? Well, you better re-think again.

Chris explains his theory of the Long Tail as follows:

"Our culture and economy are increasingly shifting away from a focus on a relatively small number of hits (mainstream products and markets) at the head of the demand curve, and moving toward a huge number of niches in the tail. In an era without the constraints of physical shelf space and other bottlenecks of disribution, narrowly targeted goods and services can be as economically attractive as mainstream fare."

In essence, your customers is going to have a lot more choices to buy from. And the current mass media (such as TV, radio, newspaper advertisement) may not be as effective in drawing in your crowd anymore.

The three main driving factors of the Long Tails are:

1. Democratize the Tools of Production - toolmakers, producers

The results from this force is More stuff to choose from (which lengthens the Tail).

With technology getting easier and easier, the tools which were only available to the big players previously are now available to everyone. This has made everyone "producers" - a number which has swelled a thousandfold.

The best example of this is the personal computer. which put everything from the printing press to the film and music studios in the hands of anyone.

Other examples includes Digital videocameras, desktop music and video editing software, blogging tools, sales letter writing tools, etc.

Think about this. Now that the tools are readily available and everyone is creating content and products easily, do you still think the big companies are not worried?

2. Cutting the costs of consumptions by democratizing distribution" - aggregators

The results of this force is More access to niches (which flattens the Tail)

The fact that anyone can create content is only meaningful if others can enjoy it. The main driving force which can explode the distribution channel is the Internet. The Internet has dramatically lowered the cost of this distribution to mere cents.

The best example is comparing Wal-Mart to eBay. Wal-Mart has a sophisticated supply chain which offers wide variety at low prices to tens of million of customers around the world. With a listing on eBay, you can now also reach that same large customers based at fraction of the cost. Now that powerful.

Other similar examples include Amazon, eBay, iTunes, Netflix.

3. Connecting Supply and Demand - filters

The biggest results of this force is it Drives business from hits to niches.

We are leaving the Information Age and entering the Recommendation Age (ie. filters).

With the lower "search costs" of finding niche content (achieved through using filters), customers have more options to choose from. When given a choice, they can go for niche products that previously cannot be found easily and cheaply.

The best example is the Amazon Bookstore. With their sophisticated online search and filters, you can now search for books that you couldn't find in the usual brick-and-mortar bookstore.

Amazon carried more than 3.7 millions books titles while a normal brick-and-mortar bookstore can carry up to 100,000 titles. Yet, about a quarter of Amazon's book sales come from outside its top 100,000 titles. And this is still growing. The venture capitalist and former music industry consultant Kevin Laws puts it this way: "The biggest money is in the smallest sales."

Other similar examples include Google, blogs, Rhapsody recommendations, and best-sellers lists in Amazon.

Beside the three forces highlighted above, Chris also goes into how you can tap into this new trend and grow your business.

Get a copy of this book "The Long Tail: Why the Future of Business Is Selling Less of More" now and planned your business future in the new economy.

Article Source: http://www.wealthmountains.com/articles

About the Author
Keith Choy runs the WealthMountains Personal Finance Portal which offers tips, tools and news on path to multiple streams of income. To get the latest news, do signup for his WealthMountains eZine at www.wealthmountains.com/news.

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