This was officially launch week for The Umlaut, a new online magazine that my friends Jerry Brito and Eli Dourado have started. There are five of us who will be regular writers for it. For my first piece, I thought it might be fun to go back and re-examine The Long Tail almost seven years after it was published.
The Long Tail had a big impact on the conversation around new media at the time, and was very personally significant. The original article was published in October of 2004, a mere month before I began blogging. Trends in new media were a fascination for me from the beginning, so I kept up with Chris Anderson’s now-defunct Long Tail blog religiously.
A 19-year-old and a tad overenthusiastic, I strongly believed that the mainstream media was going the way of the dinosaur and would be replaced by some distributed ecosystem of mostly amateur bloggers. In short, I thought the long tail was going to overthrow the head of the tail, and that would be that. Moreover, I thought that all content would eventually be offered entirely free of charge.
That was a long time ago now, and my views have evolved in some respects, and completely changed in others. I think that the head of the tail is going to become larger, not smaller, and professionals are here to stay–as I elaborate on here. However, I do think that the growth of the long tail will be very culturally significant.
When I began rereading The Long Tail, I expected to find a clear argument from Anderson that he thought the head of the tail would get smaller relative to the long tail. Instead, he was frustratingly vague on this point. Consider the following quote:
What’s truly amazing about the Long Tail is the sheer size of it. Again, if you combine enough of the non-hits, you’ve actually established a market that rivals the hits. Take books: The average Barnes & Noble superstore carries around 100,000 titles. Yet more than 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. If these growth trends continue, the potential book market may actually be half again as big as it appears to be, if only we can get over the economics of scarcity.
Let us unpack this quote a little.
First, Anderson is offering the fact that more than 25% of Amazon’s book sales occur outside of its top 100,000 titles as evidence of the revenue potential for the long tail. But this is very flawed conceptually. At the time of the book’s publication, Amazon sold some 5 million books. If nearly all of the additional revenue beyond the top 100,000 titles was encompassed by the following 100,000 titles, then 4% of Amazon’s titles account for nearly all of its book revenues. And there is good reason to believe that that is exactly how the distribution played out, back then and now.
The fact that 200,000 is a larger number than 100,000 is indeed a significant thing; it shows the gains that a company can make from increasing their scale if they are able to bring down costs enough to do so. But to claim that this is evidence of the commercial potential of the long tail is flat out wrong. We’re still talking about a highly skewed power law distribution–in fact, an even more skewed power law distribution, as we used to speak of 20% of books accounting for 80% of the revenue, and here we are talking about 4% of the books accounting for something on the order of 99% of the revenue.
This argument appears several times throughout the book, in several forms. At one point he talks about how the scaling up of choices makes the top 100 inherently less significant. Which is true, but it does not make the head of the tail any less significant; it just means that there are a larger quantity of works within that head.
Second, this bit about “if only we can get over the economics of scarcity.” Anderson argues, repeatedly, that mass markets and big blockbusters are an artifact of a society built on scarcity, and the long tail is a creation of the new economics of abundance. This is wrong to its core.
As I argue in my first piece at The Umlaut, we have been expanding the long tail while increasing the head of the tail since the very beginning of the Industrial Revolution. Scale in the upward direction fuels scale in the outward direction. Consider Kevin Kelly’s theory of 1,000 true fans, the paradigm of the long tail success.
Assume conservatively that your True Fans will each spend one day’s wages per year in support of what you do. That “one-day-wage” is an average, because of course your truest fans will spend a lot more than that. Let’s peg that per diem each True Fan spends at $100 per year. If you have 1,000 fans that sums up to $100,000 per year, which minus some modest expenses, is a living for most folks.
Now ask yourself: how do we get to a world where someone can make a living by having 1,000 true fans, or fewer? Or 1,000 more modest fans, or fewer?
One way we get to that world is through falling costs. If we assume a fixed amount that some group of fans is willing to pay for your stuff, then progress is achieved by lowering the cost of producing your stuff.
Another way is for everyone to get wealthier, and thus be able to be more effective patrons of niche creators. If I make twice as much this year as I did last year, then I can afford to spend a lot more above and beyond my costs of living.
Another conceivable way is sort of a combination of the first two–falling costs for the patrons. If I make as much in nominal terms as I did last year, but my costs of living fall by half, then it is effectively the same as though I had doubled my income.
Put all three of these trends together and you have perfectly described the state of material progress since the onset of the Industrial Revolution. Huge breakthroughs in our productive capacities have translated into a greater ability to patronize niche phenomena.
Obviously the personal computer and the Internet have taken this trend and increased its scale by several orders of magnitude–especially in any specific area that can be digitized. But that doesn’t mean we’ve entered a new era of abundance. The economics are the same as they have always been. The frontier has just been pushed way, way further out.
Moreover, the blockbuster is not an artifact of scarcity. Quite the opposite. The wealthier and more interconnected we are, the taller the “short tail” can be. In my article, I mention the example of Harry Potter, which was a global hit on an unprecedented scale (this Atlantic piece estimates the franchise as a whole has generated something like $21 billion). Hits on that scale are rare, giving us the illusion at any given moment that they are a passing thing, a relic of a bygone era of mass markets. But the next Harry Potter will be much, much bigger than Harry Potter was, because the size of the global market has only grown and become more connected.
Consider Clay Shirky’s observation that skew is created when one person’s behavior increases the probability that someone else will engage in that behavior “by even a fractional amount”. His example involves the probability that a given blog will get a new reader, but it extends to just about every area of human life. And the effect he describes, but does not name, is the network effect–one additional user of Facebook increases the probability that they will gain yet another one, one additional purchaser of a Harry Potter book increases the probability that yet another person will purchase it.
And we know, from the diffusion of innovations literature, that there comes a certain point at which one additional person increases the probability by a lot more than a fractional amount. As Everett Rogers put it:
The part of the diffusion curve from about 10 percent adoption to 20 percent adoption is the heart of the diffusion process. After that point, it is often impossible to stop the further diffusion of a new idea, even if one wished to do so.
Now, if network effects are what create skew in the first place, and we are living in the most networked age in history, how plausible does Anderson’s argument seem that the head of the tail will be of decreasing significance because of new networks?
What Does He Really Think?
Part of what’s frustrating about the book is that Anderson doesn’t really make a solid claim about how big he thinks the head of the tail is going to be relative to the tail. He provides some facts that are erroneous to answering this question, such as the Amazon statistic described above. In some places he seems like he’s saying the head will be smaller:
The theory of the Long Tail can be boiled down to this: 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 distribution, narrowly targeted goods and services can be as economically attractive as mainstream fare.
The long tail is going to be “as economically attractive” as the head of the tail. That’s what he’s saying, right? If so, then he is wrong, for the reasons described above.
But maybe that isn’t what he’s saying. Consider:
This is why I’ve described the Long Tail as the death of the 80/20 Rule, even though it’s actually nothing of the sort. The real 80/20 Rule is just the acknowledgment that a Pareto distribution is at work, and some things will sell a lot better than others, which is as true in Long Tail markets as it is in traditional markets. What the Long Tail offers, however, is the encouragement to not be dominated by the Rule. Even if 20 percent of the products account for 80 percent of the revenue, that’s no reason not to carry the other 80 percent of the products. In Long Tail markets, where the carrying costs of inventory are low, the incentive is there to carry everything, regardless of the volume of its sales. Who knows—with good search and recommendations, a bottom 80 percent product could turn into a top 20 percent product.
Here he seems to be saying that the 80/20 Rule will always remain true, but that shouldn’t stop us from realizing how important the long tail is in our lives, and how much more important it will be in the future as we get ever more diversity of choices in the relatively niche. Moreover, companies should continue to extend their long tail offers because, at any moment, one of them might suddenly jump to the head of the tail. So a Kindle book that’s only selling a handful per year may suddenly go viral and make Amazon a ton of money.
If that’s what he believes, then he is correct. But the mixture of the bad accounting of the sort in the top 100,000 books example above, statements such as the one quoted above about what “the theory of the Long Tail can be boiled down to”, and this last quote about the 80/20 rule, force me to conclude that Anderson’s thinking is simply muddled on this particular point.
Credit Where Credit is Due
Finally, if there’s one thing that I think we can all agree with Anderson on, it is that the expansion of the long tail has greatly increased the quality of our lives. Whether it’s people like Scott Sigler who has managed to make a living from his fans, or the passionate community of a small subreddit, there is an ever expanding virtual ocean of choices in the long tail today.
Chris Anderson argued that the fact that something is not a hit of the blockbuster variety does not mean it is a miss. There are some things that are much more valuable to a small group of people than they are to everyone else, thereby precluding their ability to become a blockbuster. There are also some things that might be equally appealing to the same number of people as a blockbuster, but they simply were not lucky enough to be among the few that won that particular lottery.
All of us live in both the head of the tail and the long tail, and I’m glad that Anderson convinced so many of the value of the latter.