The Long Tail (33 page)

This book is the result of nearly two years of research and interviews, from business executives to academic economists. It’s also the result of a good deal of original data analysis of proprietary sales and usage data from companies that are building Long Tail markets, from Netflix to eBay. (My eternal thanks to the executives who supported this project and made the data available.) And finally, it builds on the work of many other researchers, thinkers, and writers whose ideas and conclusions influenced my own thinking, many of whom I’ve quoted in the text.

The notes below indicate primary sources, along with additional information, explanations, and suggestions for further reading. In many cases the primary material is on the Web, in which case I give a simplified URL. But URLs can change, so in most cases I aim to also give enough unique identifying in formation so that it can be found with a search engine.

INTRODUCTION

Most of the top fifty
: Hit album data comes from the Recording Industry Association of America (www.riaa.org), which has an excellent searchable database of albums that have sold Gold (500,000 units), Platinum (1 million), Multiplatinum, and Diamond (10 million or more). Hollywood box office data is from www.boxofficemojo.com.

Every year network TV
: Television data, both current and historic, is from Nielsen Media Research.

Which is what I was doing
: Vann-Adibé left Ecast in 2005.

1.
THE LONG TAIL

On Rhapsody, the top 4,500
: This conversion requires some explanation. The offline (Wal-Mart) market is a CD market, which is to say that almost all music is sold as part of an album. Online, at services such as iTunes and Rhapsody, songs can be downloaded individually, and most are. To convert from an album market to a singles market is not as simple as multiplying by 14, which is the average number of tracks per album, since some tracks on an album are more popular than others. So to derive a better conversion rate, we analyzed the top 100,000 tracks on Rhapsody. We found that they were drawn
from about 22,000 albums, for an average of about 4.5 tracks per album. To account for the less popular tracks that were beyond the top 100,000, we gave the average album an equivalency score of 5.5 tracks. Therefore, Wal-Mart’s 4,500 unique albums are equivalent to 25,000 Rhapsody tracks.

What’s truly amazing
: Comparing book superstores and Amazon is equally fraught. Amazon has not released its title-level sales data, so we were forced to reverse-engineer it from what was available. That consists mostly of Amazon’s listed sales rank figures for each title, and third-party data on absolute sales figures for various sets of books. The earliest work on this was by MIT’s Erik Brynjolfsson, along with Carnegie Mellon’s Michael Smith and Purdue’s Jeffrey Hu. In “Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers” (2003), they estimated Amazon’s sales curve based on a large-scale analysis of its sales rank data. They concluded that sales of titles beyond the top 100,000 (the typical inventory of a traditional book superstore) amounted to 40 percent of Amazon’s sales.
In subsequent discussion with Amazon and others in the book industry, we concluded that this was an overstatement, most likely due to problems with Amazon’s sales rank algorithms and a tendency for this sort of full-curve analysis to undercount the top 100 titles. We have subsequently refined the analysis by calibrating the relative rank numbers with known sales figures that we obtained directly from publishers. We then checked that with analyst estimates of Amazon’s overall book sales revenues. We now estimate that sales of titles beyond the top 100,000 account for somewhere between 20 percent and 30 percent of Amazon’s total book sales, and have used 25 percent as a median figure.

2.
THE RISE AND FALL OF THE HIT

The rise of such powerful
: Benjamin’s essay is “The Work of Art in the Age of Mechanical Reproduction,” 1936.

3.
A SHORT HISTORY OF THE LONG TAIL

“I was sorting through”
: Bezos was speaking at the Churchill Club in February 2005.

Finally, to give an idea
: Robb’s Web site is at globalguerrillas.typepad.com. The post is dated March 18, 2005.

5.
THE NEW PRODUCERS

In January 2001
: For the Wikipedia background, I relied heavily on “The Book Stops Here” by Daniel Pink, which we published in
Wired
in March 2005.

Author Paul Graham
: www.paulgraham.com/web20.html.

South Korea’s
: The source is the World Economic Forum’s
Global Agenda
magazine, 2006.

Soon more videos
: I am indebted to Xeni Jardin’s excellent article in
Wired
magazine, December 2005, for the details in this passage.

A team at the University
: Ryan Shaw and his colleagues at the Media

Streams Metadata Exchange at the School of Information Science and Management.

6.
THE NEW MARKETS

Publishers ensure
: Source: www.nacs.org.

It made that database
: Source: www.bisg.org.

7.
THE NEW TASTEMAKERS

“Historically Blockbuster”
: Hastings was speaking at the Lehman Brothers Small Cap Conference in November 2005.

8.
LONG TAIL ECONOMICS

In other words
: I’ve used the term “powerlaw” loosely here to refer to distributions in the form of
y
=
ax
^k
. In the empirical data used in this book,
y
is typically absolute sales or popularity and
x
is the corresponding sales or popularity rank of unique products. The
a
term is a constant for a large
x
, and
k
is the power to which
x
is raised, called the “powerlaw exponent.” In fact, there are many variations of these kinds of exponentials, and different markets that at first glance look like powerlaws may actually be “log-normal” distributions or other statistical cousins. It’s not within the scope of this book to explore these differences, but I am indebted to Hal Varian of the University of California, Berkeley (and Google), for pointing out this subtlety.

Sadly, here’s
: Source: www.film-festival.org.

The same is true
: The statistics here for Barnes & Noble, PRX, and rediff.com all come directly from personal correspondence with their executives.

A 2005 study
: This study has not yet been published and was provided in draft form; as a result some of these figures are subject to change in the final version.

Another way to look
: The contrast between online and offline markets is striking. The differences between the sales distribution of the markets are shown in table form on the next page.

PERCENTAGE OF TOTAL SALES

“For most of human”
: Originally published in
Forbes ASAP
, this passage also appears in
Telecosm: How Infinite Bandwidth Will Revolutionize Our World
, 2000.

So how to reconcile
: Personal correspondence.

9.
THE SHORT HEAD

“People cluster”
:
The Atlantic Monthly
, October 2005.

“A store selling”
:
Discover
magazine, September 2005.

“Towns and suburbs”
:
The Death and Life of Great American Cities
, originally published in 1961.

Of the estimated 30,000
: Gottlieb was interviewed in the
Frontline
documentary “The Way the Music Died,” 2004.

In America, 20 percent
: Source: Brynjolfsson, Smith, and Hu, 2003.

10.
THE PARADISE OF CHOICE

He cited
: “When Choice Is Demotivating: Can One Desire Too Much of a Good Thing?” Sheena Iyengar (Columbia) and Mark Lepper (Stanford), 2000.

One of the better-known bits
: “The Lure of Choice,” Nicola Brown and Barbara Summers (Leeds University Business School) and Daniel Read (London School of Economics), 2002.

Francis Hamit
: Personal communication.

11.
NICHE CULTURE

Virginia Postrel
:
Forbes ASAP
, 1998.

12.
THE INFINITE SCREEN

TV produces more
: “How Much Information?” Hal Varian (UC Berkeley School of Information Management and Systems) and colleagues, 2003.

Jeremy Allaire
: Source:
Streaming Media
, October 2005.

Rob Reid
: Personal communication.

Note: Entries in this index, carried over verbatim from the print edition of this title, are unlikely to correspond to the pagination of any given e-book reader. However, entries in this index, and other terms, may be easily located by using the search feature of your e-book reader.

Abrams Report, The,
193

abundance, 18, 19, 25, 43, 143–46, 151, 223

ad-hoc organization, 159, 160

advertising, 98, 110, 123, 143, 164, 210–11, 224

controlling messages of, 228–29

Google and, 10, 23–24, 50, 88, 89, 139, 210–16, 219, 229–30, 254

television, 30, 165–66, 225, 226

Advertising Age
, 228

age, 142–43

aggregators, 57, 88–97, 112, 135, 148, 203, 215, 216, 253, 254

DJs and, 179, 180

hybrid retailers, 89–91, 92

pure digital retailers, 91, 92, 96–97, 218–19

rules for, 217–24

Ain’t It Cool News, 233

alcohol, 250

Alibris, 86, 87, 88

Allaire, Jeremy, 197

allergen-free products, 251

amateurs, 63, 73, 78, 84, 167

in peer production, 73, 79, 219

in Pro-Am collaborations, 60–63, 65

Wikipedia and, 65

Amazon, 8–9, 13, 24, 57, 89, 92–95, 135, 162, 204, 218, 248, 254

books on, 15–16, 23, 48–49, 87, 92–93, 94–95, 138–39, 169

Marketplace program of, 93–94, 173, 202, 218

music on, 90–91, 155

recommendations on, 16, 202

searching for items on, 161

tagging on, 161–62

total inventory and sales of, 23

American Airlines, 109

Anheuser-Busch, 250–251

anime, 251

Apple, 64, 238

GarageBand, 63

iPod, 3, 34, 36, 97, 175, 190, 198

iTunes,
see
iTunes

architecture of participation, 83–84

Arcuni, Peter, 104, 105, 106

art, 116

astronomy, 58–62

AT&T, 46

attention, 138, 143, 146, 165, 166

Baby Bells, 109

BagelRadio, 105

Ballmer, Steve, 238

Barnes & Noble, 23, 47, 49, 77, 87, 130

Barrio305, 197, 198

Basic Channel, 179–80

Bechtel, Robin, 102–3

beer, 250–251

Benioff, Mark, 207–8, 209

Benjamin, Walter, 28

Berkeley, Calif., 243, 250

Berners-Lee, Tim, 236

Best Buy, 49, 89, 93, 133, 155, 218

Bezos, Jeff, 13, 47, 48, 49, 50, 92

BigChampagne, 33, 103

Birdmonster, 104–6

BitTorrent, 97

Black House, 168

Black Swan Problem, 120

Blockbuster, 26, 109, 134, 153, 160–61, 169

Bloglines, 88, 89, 230

blogs, 55–57, 63, 68, 69, 75, 82, 83, 88, 89, 99, 108, 123–24, 137, 140, 185–86, 188–89, 190, 220, 254

Dell and, 234, 235

Microsoft, 240–241

music, 105, 106, 108, 123

popularity of, 186–88, 235

PR professionals and, 241–242

responding to, 231–232

Technorati filters and, 230

time and, 143 top ten, 113

BMG, 31

BoingBoing, 108

Bollywood, 17

BookQuest, 85

books, 3, 5, 9, 26, 47–49, 71, 75–76, 97, 116

Dewey Decimal System and, 157–59, 160, 161

in libraries, 157–60, 161

print-on-demand, 63, 95–96

sales data for, 121

self-publishing of, 76–78, 82, 167

used, 85–88

bookstores, 47, 162–63

Amazon, 15–16, 23, 48–49, 87, 92–93, 94–95, 138–39, 169

Barnes & Noble, 23, 47, 49, 77, 87, 130

Borders, 47, 169

BookSurge, 95

Borders, 47, 169

Brightcove, 197

broadband, 53, 193, 198, 224

broadcast technologies, 18, 29, 147, 148, 164, 166, 191
see also
radio; television

Brynjolfsson, Erik, 135

Burger King, 225

Bush, Vannevar, 236

Business Week,
169

buzz, 164–65

Campbell-Ewald, 225–28

cars, 169

catalog shopping, 42–44, 46–47, 49, 135–36, 147, 164

hybrid retailers and, 89–91, 92

categorization, 156–62, 203

CD Baby, 105, 106

CDs, 9, 17, 22, 90–91, 102, 137, 139, 149, 155–56, 182, 220

burning of, 33, 34, 175

sales of, 175

celebrities, 107–8

cell phones, 36, 198

Chevrolet, 225–29

Chicago Tribune,
187

China, 249

chocolate, 243–44

choice and variety, 53, 126, 130, 135, 143, 148, 150, 151, 165, 167, 168–76, 180–82, 184, 189–90, 200, 218, 254

economics of, 175–76

“either/or” vs. “and,” 222–23

fragmentation and, 181, 189–91

Chronicles of Narnia
sketch, 80–81

Cinderblock, 106

cities, 149–51

citizen journalism, 78

Clear Channel, 36

clothing, 250

coffee, 243, 244

consumers,
see
customers

Consumers Union, 153

control, 221–24

copyright, 74–75, 167, 180, 196, 217

Corante,
181

Cosgrove, Stuart, 177–78

costs of reaching niches, 53–57

shelves and, 153

creation

map of, 83–84

motives for, 73–74, 78

Creative Commons, 75, 80

cricket, 251–52

Crosbie, Vin, 181

crowdsourcing, 219

Crown Books, 47

CSI,
37, 192, 193, 194, 22

culture globalization of, 251–52

hit-driven, 38–40

local, 27, 191

mass, 28, 148, 181, 182, 183–84, 185, 189, 191, 199

massively parallel, 182–85, 191

microcultures, 183–85

pop, 28, 30

Culture and Society
(Williams), 185

customers (consumers), 253

line between producers and, 63–64, 83–84

Long Tail of, 163–64, 229–30

reviews by, 55, 56, 64, 99, 123, 124, 173, 219, 222

CustomFlix, 95

DailyCandy, 108

Daily Kos, 187

Daily Me,
189

Dash, Anil, 182

Dell, 98–99

Jarvis and, 233–35

Dell, Michael, 233, 234–35

demand, 8, 9, 40, 99, 165

cities and, 150

curve of, 52, 53, 57, 142

filters and, 109

local, 17–18, 162–64, 220

in Long Tail, 10

Long Tail’s effect on, 137–38

natural shape of, 9, 53

supply and, 11, 16, 24, 26, 52, 55–56, 94

time and, 142

democratizing of distribution, 55, 57, 81, 84, 88, 107, 179

democratizing of production, 54, 55, 57, 62–65, 73, 82, 84, 107, 178, 179

demographics, 169

Demos, 60, 62

Desktop Factory printer, 247–48

Dewey Decimal System, 157–59, 160, 161

Digg, 241, 242

digital jukeboxes, 7–8

Diller, Barry, 79, 81, 82

Dillworth, Ed, 228

distribution, 143, 180, 193, 198–99

democratized, 55, 57, 81, 84, 88, 107, 179

inefficient, 16, 53, 126, 127–30, 156, 166, 195