This is a part of my critical reader’s companion to The Long Tail and discusses "Chapter 4 – The Three Forces of The Long Tail". Part 0 is here. The previous part in this series is here.
Chapter 4 is a really short chapter (6 pages, including 3 diagrams and a table) which sketches the three forces of the Long Tail (and also the six themes of the Long Tail age – what is it with numbers?) Subsequent chapters talk about each force in turn. So this is a really short post as well.
Given that it is short, this might be a good place to put the canonical picture of the Long Tail. So here it is.
The idea is that you arrange a set of products in decreasing order of popularity along the horizontal axis, and plot their popularity up the vertical axis. The first few are the most popular items (the hits) and as you go to the right you go past many individually less and less popular items. There are a lot of items in the yellow area, and while there is not much demand for any individual one of them, it is possible for some shapes of graph that there is more total demand (a bigger area under the graph) in the tail (yellow area) than in the head (green area). The Long Tail idea is that the Internet is pushing demand away from the hits in the green area and into the yellow area of the Long Tail.
Before goods can be put on shelves, they have to be made, and so Anderson identifies the first force of the Long Tail as "democratizing the tools of production. The best example of this is the personal computer, which has put everything from the printing press to the film and music studios in the hands of anyone."  In this definition Anderson fails to distinguish two separate aspects to cost. One is the cost of making the first copy of something – be it a tube of toothpaste or a blog post like this – and the second is the marginal cost of making subsequent copies. It may cost a few hundred or a few thousand dollars for a student to make a short film while it can cost over $100 million for a major movie studio to make a big production. But making the second copy of each one costs the same. Anderson focuses, here and in the next chapter, on those technologies that make it easier for many people to make cheap films (and so on) – hence that loaded word "democratization". But price is not determined by that cost, it is determined by marginal cost – the cost of that second (or thousandth, or millionth) copy. It cost me about as much to watch Jim Jarmusch’s shoestring-budget Coffee and Cigarettes as it cost me to watch Return of the King. We’ll see in the next chapter that this overlooked distinction makes a big difference to the story of production in the digital world.
The second force is "cutting the costs of consumption by democratizing distribution" . It’s the part of the story that Chapter 1 focused on – how companies such as Amazon and Netflix can exploit the Internet to more effectively distribute goods. The Internet, he argues "makes everyone a distributor" . But it takes more than a computer to get a little homemade video seen by hundreds of thousands of people, it takes You Tube. It takes more than an Internet connection to buy and sell an obscure piece of jewellery, it takes eBay. Not everyone is a distributor – in fact the economics of the Internet is likely to decrease the number of distributors rather than increase them. Chapter 6 looks at "democratizing distribution".
The third and final force is "connecting supply and demand"  – those recommendations, links, and so on that help us to find things we like on the Internet. Those recommendations, perhaps most effectively on eBay where trust is such an issue, have helped Internet ventures overcome some big obstacles. But when he says "The other thing that happens when consumers talk amongst themselves is that they discover that, collectively, their tastes are far more diverse than the marketing plans being fired at them suggest" [56-57] we can see that there is a big hole right ahead of him on the path Anderson is walking. People have, after all, talked amongst themselves for a long time. Does the Internet increase the level of consumer talk and so increase its usefulness as a mechanism for identifying niche tastes, or does it simply replace one forum for talking (face to face) with another (Internet-mediated)? Chapter 7 looks at tastemakers on the Internet, where we will see if Anderson falls into the hole or not.
So that’s two short posts, pretty light on substance. Tomorrow I should have a longer one with a bit more to it.
Car manuacturers (amongst others) long ago realised that the setup cost was the critical factor in providing variety for the customer. So even in the early 1990’s you could specify your variety of particular requirements for your car and by the miracles of computing your particular selections would arrive at the appropriate points on the production line.
1. All this customer variety developed before the advent of the internet.
2. If 1000 people by a Toyota Corolla and they all have a slightly different personalised spec, is this 1000 people buying the same product? Or 1000 people buhying a uniquely different product?