Long Tails and the Infinite Playlist

In case other folks hadn’t noticed, Wired has become worth reading again. Case in point: There is a piece in the October issue that is going to become de rigeur in tech conference, venture capital and startup circles, with the phrase “long tail” showing up in too many restyled PPTs.

The gist: Chris Anderson (Wired’s editor-in-chief) argues that popularity no longer has a monopoly on profitability. Infinitely long playlists and lower costs at, among other places, media outfits, mean that it is not only possible to make money selling low volume items, it is entirely rational.

I can quibble with Anderson’s opening example — Amazon’s recommendations engine’s effect on “Touching the Void” sales — but his point stands. People want the “All” option when it comes to consumption. In other words, sometimes editorial filtering is not only unnecessary, it is downright unwelcome.

Side note: Anderson asks the following question, which most people get wrong: “What percentage of the top 10,000 titles in any online media store (Netflix, etc.) will rent or sell at least once a month?” 

Most people answer 20%, having been well schooled on the Pareto principle. The trouble is, that answer is wrong. The correct answer? 99%. There is demand for nearly every one one of the top 10,000 titles. People get the above answer wrong because they confuse hits (where Pareto applies with a vengeance) with sales of any sort. Anything can sell to someone.

Related posts:

  1. The Jayson Blair epside: What took so long?
  2. Monkeys, a typewriter, infinite series, and the letter “S”
  3. So Long, & Thanks for All the Credit
  4. Microsoft’s Annuity Problem
  5. Dallas Fed’s Upcoming IT Conference

Comments

  1. Frank Ruscica says:

    Key excerpt:
    What’s really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you’ve got a market bigger than the hits. Take books: The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 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 larger than the market for those that are (see “Anatomy of the Long Tail”). In other words, the potential book market may be twice as big as it appears to be, if only we can get over the economics of scarcity. Venture capitalist and former music industry consultant Kevin Laws puts it this way: “The biggest money is in the smallest sales.”
    —-
    Strongly suggests that the blog ad market will become dizzyingly large…
    Beyond this, good stuff on this blog.
    Enjoy,

  2. Paul K says:

    Good “money” quote, Frank. Thanks for pulling it out, and thanks for the kind words.