The current long tail discussion at ETech is interesting, but people are still missing something important, something that I think Chris Anderson underemphasizes, or maybe doesn’t even get himself.
We’ve always known there were lots of people not reached by typical companies, but it is not true that companies were somehow ignorant of those potential customers: They just couldn’t afford to sell to them. We have that discussion all the time in venture capital, with partners getting jumpy about portfolio companies selling into consumer markets, mostly because it has always been too tough to reach these people cost-effectively. “Cost of customer acquisition” is the favored phraseology.
But that is no longer the case — in some markets. You can cost-effectively reach infrequent buyers who want fringe products: You do it via customized ads (Adwords) and net-based distribution. And that is what is interesting about the long tail. Put another way, while the long tail is fun and growing, it isn’t new: It’s just that until recently it wasn’t economical to worry about it.