Author: Tom Slee

Here are links to each post in my critical reader’s companion to The Long Tail by Chris Anderson.

0- Cards on the Table
0.1 – The Cover
0.2 – The Introduction
1 – The Long Tail
2 – The Rise and Fall of the Hit
3 – A Short History of the Long Tail
4 – The Three Forces of the Long Tail
5 – The New Producers
5.1 – One Big Virtual Tent
6 – The New Markets
7.0 – A Teaser
7 – The New Tastemakers
8 – Long Tail Economics
8.1 – A Note on Networks
9.1 – The Short Head Part 1
9.2 – The Short Head is Alive and Well
9.3 – The Short Head Part 2
10 – The Paradise of Choice
10.1 – A Short Note
11.1 – Living in a Niche Culture (1)
11.2 – Living in a Niche Culture (2)
12 – The Infinite Screen
13 – Beyond Entertainment
14 – Long Tail Rules
15 – Coda

Or you can download the whole thing as a 150-page PDF here.

First, welcome to readers from progressivebloggers.ca, where I am now an affiliate (just).

If you are coming here for the first time, let me catch you up. I’m in the middle of a chapter-by-chapter, nearly page-by-page critique of Chris Anderson’s book about "the future of business" called "The Long Tail". I’m doing it because the book is widely read, influential, enthusiastically pro-market, and also sloppy and wrong wrong wrong. If you want to see the beginning of the series, go here. If you want to see them all in descending order, go here.

I usually try for about three chapters a week, but I only got two done over the last week, so here’s a bonus teaser for the next chapter, which is Chapter 7. It’s a little thing – one sentence in the middle of the book – but it says something about the author’s cavalier attitude to facts.

Chris Anderson says:

Dell spends hundreds of millions each year on promoting its quality and
customer service, but if you Google "dell hell" you’ll get 55,000 pages
of results.[99]  (I put page numbers in square brackets)

At ten results per page (the default) that’s 550,000 results. Let’s see if we can reproduce this number.

First let’s try "dell hell" in quotes, as he shows it. Over at the right of the page it says "results 1-10 of about 69,600". That’s 696 pages, not 55,000.

But Google’s "about" numbers are notoriously inaccurate. To get a more precise number, first I recommend changing the preferences to return 100 results per page (less clicking), redo the search, and then click through the pages. How many results do you end up with? A total of 693. That’s 70 pages of results, not 55,000.

Suppose he meant without the quotes. Let’s try that. The "about" number at the top right of the page is now 1,620,000 – or 162,000 pages of regular results. That’s about three times the number Anderson quotes – perhaps that’s what’s changed in the last two years. So this is where he gets his number from, I guess.

But as I said, that "about" number is notoriously unreliable. Click through the pages and how many results do you get? 753. That’s 76 pages of results at the default ten-per-page.

So Anderson claims 55,000 pages of results because it’s a big number, and a big number illustrates the point he is making, but a five minute test shows that he is overestimating by about 54,924.

So much for that claim. And unfortunately (in case you were wondering what I think) it’s typical of the book.

This is another part of my critical reader’s companion to The Long Tail, and it discusses Chapter 6 – The New Markets. Part 0 is here. You can find a complete list of the Long Tail pieces here. You have to read upwards, in usual blog fashion. When I get to the end I hope to put these all together in one big file for download.

Bored of this yet? Well that’s just too bad, because this blog is nothing but The Long Tail until I’ve gone through the whole thing, repetition and tedium be damned. So if you don’t like that, come back in about three or four weeks if things go according to plan.

Still here? Great. Glad to have you. It is time to cast your mind back and recall that Chapter 4 spelled out the Three Forces of the Long Tail and that Chapter 5 was about the first one: Production. Chapter 6, today’s subject, is about the second force: distribution. And whereas Chapter 5 was bolted on to the side of the Long Tail hypothesis, Chapter 6 is right in the middle of it. It’s about Internet aggregators, in particular Amazon, and how they go about filling their long shelves.

The first section of the chapter is one of the more interesting stories in the book. It’s about the success, at the third attempt, of Alibris, a company that seeks to "deliver the growing power of e-commerce to independent                booksellers while delivering extraordinary selection to businesses                and book lovers" (from the Alibris web site).  The used book market (other than university textbooks) is fine if you are a browser hoping to stumble across a quirky find, but problematic for people looking for a particular book because there are "not enough sellers and buyers of an unbounded set of commodities" [87]. As a result, the odds of finding your book are slim. "Thus, most buyers simply never consider a used-book store when they’re shopping for something specific" [87].

Alibris takes the inventory of used book stores, gathers them together, and puts this big database online, making it available to Amazon and other online outlets such as bn.com, where used books appear alongside new books when customers search for a book. The result is a fast-growing used-book industry (11% in the US in 2004) [88]. This story shows what the Internet is good at: bringing unconnected people together. It sounds like, and maybe is, a hopeful story, "creating a liquid market where there was an illiquid market before" [88]. (Aside – it is odd that Anderson talks about the American Alibris and completely neglects its bigger Canadian competitor Abebooks, who now own the fine librarything web site, but perhaps he is subject to the tyranny of geography in the physical world).

It is likely that a move to used book buying and selling is a pretty diverse market compared to new books, but it may be of interest to note that the Alibris founder says, in discussing a new Alibris pricing initiative that " It’s true that the Alibris Pricing Service really is oriented mainly around common books – but that’s more than 80% of the demand out there, so it tackles the vast majority of the market". Alibris is a private company and does not make its detailed sales figures available, so it is difficult to know for sure. But used books are one of those areas where the Long Tail hypothesis has the strongest ring of truth.

Enter the Aggregators [88-89] picks up from the Alibris example and uses it as an example of a "Long Tail ‘aggregator’ – a company or service that collects a huge variety of goods and makes them available and easy to find" [88]. And the Alibris story shows that there are ways in which the Internet can pull people together. But while aggregation can be a fine thing, it does have a dark side, and that side is market power. Canny aggregators know this. Alibris, for example, does not put its customers in touch with the used book stores that actually sell the books. Instead, the book store owner sends their book to Alibris, who then sends it on to the customer. In this way, Alibris becomes the hub of the market: the central repository of knowledge, while the individual book stores who it relies on are kept in the dark. This appears to have led to some resentment amongst some librarians and book store owners, although I have no idea how widespread this is.

What this means is that online aggregators become the new powerhouse in the industries they move into. Amazon in the world of new books, Abebooks and Alibris in the world of used books, and so on. Google, of course, is seeking to aggregate everything and so become the hub for "the world’s information".

This is a mixed development for those whose information is being aggregated. Newspapers, for example, are not thrilled at the idea of Google News presenting their information freely to the world, while the newspapers themselves struggle over lost income. With Google making scads of advertising money off presenting information to people, it looks like the balance of power has shifted from the content originators to aggregators.

Aggregators are here to stay. What remains to be seen, however, is if they bring with them any real move towards a more diverse pattern of demand and consumption.

So aggregators are the Long Tail enterprises that represent "the future of business", and Anderson says "there are literally thousands of them" [88]. Are we now going to hear about the wave of the future, and see what shape it is taking?

No. Frustratingly, the only examples he lists after that teasing sentence are our old friends Google, Rhapsody, iTunes, Netflix and eBay — the same handful of companies he’s been going on about in the first few chapters. He does also mention Bloglines, an RSS feed aggregator, and Wikipedia, which I’ve argued is not an "aggregator of the Long Tail of knowledge" but those are the only ones of those "literally thousands" that he actually lists.

What he means by his "literally thousands" becomes clear when he says that "a single blog that collects all the information that it can about a topic, let’s say needlework, is an aggregator" [89]. Well, if this is where his "literally thousands" of aggregators are coming from, count me underwhelmed. Amazon is one thing, and someone collecting links on needlework is another. I mean, Wal-Mart puts things on shelves and I put things on shelves, but that doesn’t make me the same kind of thing as Wal-Mart. And  although he mentioned needlework or "SEC filings or techno music" he does not actually list real sites. The wave of the future, it seems, is still intangible.

Anderson does tease us again by claiming that "in this chapter, I’ll focus on the business aggregators. They fall mostly into five categories:

1. Physical goods (eg Amazon, eBay)
2. Digital goods (eg iTunes, iFilm)
3. Advertising/services (eg Google, Craigslist)
4. Information (eg Google, Wikipedia)
5. Communities/user-created content (eg MySpace, Bloglines)" [89]

The rest of the chapter, however, is devoted to a discussion of just one aggregator — Amazon (again!) with occasional mentions of old chums Netflix and Rhapsody. The fact that we are a third of the way into the book and, when it comes to specifics, Anderson keeps going back to the well to show us Amazon or Netflix one more time suggests that he is a little short of real examples, and that perhaps the aggregator model, while a powerful one for some people, is not something that is going to spawn large numbers of companies.

We’ve already seen (earlier chapters) that while Amazon does make more money off its "Long Tail" than individual brick and mortar stores, its figures are not spectacularly different after the downward revision between the original article and the published book, and that Rhapsody seems just as hit-dependent as HMV. When it comes down to it, we have here a short, limited list of examples which we’ve already seen provide little evidence for a significant Long Tail effect.

Hybrid versus Pure Digital [89-91] This section is devoted to a single rather obvious idea, which is that while it’s pretty cheap to sell physical goods from digital shelves ("hybrid retailer"), it’s even cheaper to sell digital goods from digital shelves ("pure digital retailer") because such a good is just a row in a database table until someone orders it. This latter form of business is, he says "the holy grail of retail – near-zero marginal costs of manufacturing and distribution" [91]. Here, he actually mentions (unlike in the previous chapter) that it is marginal cost that is being minimized. He does not go on to point out that the industries with large fixed costs and tiny marginal costs tend to form oligopolies, but they do. It’s the main reason why there really aren’t "literally thousands" of aggregators and it’s why he has to go back to the same old examples over and over again. Fixed costs and other forms of increasing returns mean that there just aren’t that many of them.

Tripping Down the Tail [91-94] is also about Amazon (yawn), and shows how it is getting "closer and closer to breaking the tyranny of the shelf entirely" [94] by introducing Amazon Marketplace – a program in which the Amazon web site is a storefront for many small vendors (rather like eBay). "Retailers and distributors of any size, from specialty shops to individuals, could have their goods listed on Amazon.com just like the products in Amazon’s own warehouses – and the customers could buy either just as easily." [93]

Amazon Marketplace shows the real appeal of the aggregator business model, and it’s not about Long Tail, it’s about One Big Virtual Tent (see yesterday’s post). Why? Because the Amazon Marketplace model gets Amazon itself out of the physical shelf business, even though as Anderson writes, apparently without noticing the implications (he really is an incurable optimist) "With the Amazon Marketplace form of distributed inventory, the products are still on shelves around the country, but they are collectively catalogued and offered in one central place – Amazon’s Web site. Then, when people order them, the products are boxed up and shipped directly to the customer by the small merchants who have held the inventory all along" [94 – my emphasis] and if the goods don’t sell "Amazon bears none of the cost — the surplus stock simply depreciates on the shelves of a third party" [94].

It is easy to see why this is a great deal for Amazon: they are using their market power to put the squeeze on the individual retailers whose very physical shelves are holding very physical products. Like Alibris, Amazon have put measures in place to prevent customers and sellers communicating directly. They are the ones in charge of this relationship.

So Amazon Marketplace is yet another story with at most a tenuous relationship to the Long Tail thesis. It provides Amazon with another source of revenue, but it is not clear if or how it moves overall customer demand to a Long Tail in any significant way. Sales of small items are gravy for a site with the huge web site resources of Amazon,  but Anderson does not say how much business has been done on Amazon Marketplace, whether the small suppliers (for whom it is one more outlet) are gaining or losing overall from any move online that has happened, and so on. If, for example, there is a move to online purchase of the kind of goods found on Amazon Marketplace, then it could make sense for individual retailers to put their items there (because any sale is better than no sale) and yet be worse off than they were before Internet selling came along. It’s just shoddy writing. And it doesn’t get better.

Inventory on Demand [94-96] is yet more Amazon smoke and mirrors. By this time it is really getting silly. Anderson talks about Amazon’s big commitment to print on demand publishing as a way of selling all those niche books. But while he notes that "the potential of print-on-demand is extraordinary" [96] he doesn’t give any real-world numbers. How many print-on-demand books does Amazon sell? Not a clue. Will it help publishers get past the problem of returns from physical stores or does POD have its own problems? Who knows? Not Anderson, that’s for sure. And then at the very end of the section he says that print-on-demand may also be useful for big sellers (hits) as well as niche products, so it may not actually "push demand down the long tail" at all. Remarkable.

The End of Inventory Altogether [96-97] is the final section of this chapter. It finally moves away from Amazon to talk about iTunes, Netflix and other pure-digital outlets as the wave of the future – which we have already seen are pretty hit-based. There is no doubt that the digital world is getting bigger, but this is not news. I for one am no cellulose sentimentalist and can’t wait for flexible electronic paper, but when it gets here I hope there is something more solid than The Long Tail to read on it.

So there we are. Another chapter, another lack of real substance to Anderson’s thesis. It is clear that there is money to be made by aggregators, but not at all clear that the coming of the aggregators is the coming of "infinite choice" [180].

This is a part of my critical reader’s companion to The Long Tail, although it doesn’t discuss any one chapter. Part 0 is here. You can find a complete list of the Long Tail pieces here. You have to read upwards, in usual blog fashion. When I get to the end I hope to put these all together in one big file for download.

It’s time to take a breather and stop turning the pages of The Long Tail. I hope I’ve made the point now that there are a lot of problems with the book, a lot of places where (as John said) "It looks like his theory has become so obvious and inevitable to him that he sees the ‘revolution’ coming even when the facts seem to point in the other direction." It’s time to step back a bit. After all, even if much of The Long Tail is fluff, what about the idea at the heart of the book? Even if it takes only a few sentences to state instead of 240 pages, it could still be a penetrating insight that holds up despite the sloppiness of the supporting material. So the question is, if I don’t think the world of the Internet is Long Tail, what do I think it is like? Criticism can only take us so far without something constructive to put in its place.

The short answer to these questions are that I believe The Long Tail idea has merit only to the extent that the physical world is trapped in a digital vice of IT-driven big-box stores on the one hand and online stores on the other. Second, that to the extent a single image can be used to describe the world of the Internet, we could say that online commerce replaces a world of Many Little Tents by One Big Virtual Tent.
There is a lot of stuff under the One Big Virtual Tent, but that stuff is hard to find, there’s only one of it,  and it’s probably based in California.

The core of the Long Tail hypothesis is that (i) Internet-based businesses, unencumbered by the tyranny of physical space, are able to make far more different products available than "bricks and mortar" stores, (ii) Internet-driven increased access to these niche products leads to greater demand for them – demand is driven down into the Long Tail, with the end result that (iii) we move from a market driven by hits or blockbusters to a market of niches. Finally (iv) this coming together of a diversity of tastes with a democracy of production is a think to be celebrated as a natural, unfiltered, and diverse outcome. The Internet brings an "explosion of variety" where  "On the infinite aisle, everything is possible" [226].

The first thing to say is that (the title of this entry aside) to stretch one simple image over the entire Internet phenomenon – which Anderson does sometimes – cannot work and is of little use. It’s as if we tried to stretch a single image over the invention and development of the internal combustion engine. If you wanted to write a book in the early years of motorized transport talking about the future of business and of culture what would you say? Just that there were many futures to business. There were futures of families scattering across the miles as travel became easier, and of families overcoming distance to stay in touch. There were futures of homogeneity as economies of scale took hold, and futures of variety as people became exposed to influences from outside their own neighbourhood. There were futures of war and of peace, of great depressions, general strikes, longer lives, wonderful sights that could never be reached before. You get the idea. You just can’t take a phrase like The Long Tail and stick in on a development with such far-reaching implications  as computerization and the Internet and apply it to everything without it losing all meaning. So the Long Tail in its broadest use is meaningless, and needs no competing theory to replace it.

Narrowing the scope of the idea to something more manageable, a reasonable question is "will the shift to online commerce (Amazon, Netflix, iTunes) lead to a more diverse environment for cultural products?" I predict no with some qualifications. Such businesses are freed, as Anderson points out, from the constraints of geography. But geography, as Anderson admits from time to time, not only limits diversity, it is also a source of diversity. When we move our shopping online, the first physical stores to feel the pinch are not the Borders, Blockbuster, and Wal-Marts but are the smaller specialist sellers within physical communities. These specialist sellers are almost completely ignored by Anderson, as I’ve pointed out in the last several posts. Some specialist sellers will manage to thrive in the online world, but others (a computer book store in my town, for example) will be driven to the wall by online competition. To the extent that we abandon local businesses for online shopping, we lose rather than gain diversity.

If we are to compare the online world to the physical world we must do the job properly and compare all the online world to all the physical world. This is a difficult job, because the physical world is much more uneven than the online world: the economies of scale in the online world tend to create oligopolistic or even monopolistic markets in a way that outdoes even the Wal-Marts of the physical world, and Amazon is as accessible to people in small towns as it is to people in major cities. When looking at the availability of jazz music, for example, piefuchs’ comment on Chapter 2 captures the difficulty of measuring the change:

Growing up in small-town NS I used to love to come to Boston to buy CDs – especially jazz. Now however, anyone can buy any CD on the web, but living here in Boston I can no longer go to a store see the same magnitude of selection, since every record store with a substantial new jazz department has closed. So are more people actually buying jazz instead of the blockbuster or are more people in small towns buying jazz on the web rather than when they travel?

The physical world is a world of heterogeneous variety, while the online world is a world of homogeneous variety. It is not clear that averages help very much when comparing physical apples to online oranges, but we can at least say that one thing you don’t do is compare Borders (or Chapters/Indigo, or Waterstones) to Amazon and claim you are comparing the physical and online worlds. The measurement biases of the book are pervasive and ignore the shift from a relatively heterogeneous retail environment in the physical world to a homogeneous retail environment in the online world. These biases are a big part of what make the book fundamentally wrong.

The other reason for my disbelief in the Long Tail is that it is not only the niches that benefit from being freed from "the tyranny of geography". Hits benefit too. The phenomenon of movies opening simultaneously worldwide is possible only in a digital age. The possibility of such global rewards, especially when complemented by supply-side economies of scale and multiplied by synergistic products (the action figure and video game of the movie of the book) and given the fixed costs of producing digital content pushes markets towards the Short Head, not the Long Tail. The phenomenon of world-wide bestseller book releases is likewise a recent phenomenon (I believe, but confess I don’t have figures to back it up) and as John commented, there is evidence via Anderson’s weblog itself that midlist titles are struggling relative to hits in the bookselling market.

On the demand side too, there are forces that push us towards the Short Head. As Dipper pointed out in the comments to Chapter 1:

One reason people buy arts and cultural products such as books, dvd’s, games, clothes, cars is to participate in cultural life. That means buying what other people are buying

The weakening of geographical constraints means that the definition of "other people" broadens out.

What is the net result of these competing forces? The nearest I can see to a simple statement is that the online world is One Big Virtual Tent whereas the physical world is Many Little Tents. There’s little doubt that there is more variety under the One Big Tent than in any of the Many Little Tents (even the biggest of them). But is there more variety in the One Big Tent than in all the Many Little Tents together? Well, if you live close to only one little tent, the answer is undoubtedly Yes. If you live closer to a field crammed with Little Tents, then the answer may be No. And can you find what you want in the One Big Tent? Not yet would be my answer. Finding things online is a topic of Chapter 7 in the book, so there will be more to say there, but let’s just say that if you know what you are looking for you can find it on Amazon, but you are unlikely to come across, as I did in my public library, the strange and compelling stories of Agota Kristof by chance.

In comparing Many Little Tents with One Big Virtual Tent also need to look at geography at the level of nations as a source of diversity. As in so much else on this topic, my favourite reference is Blockbusters and Trade Wars, Popular Culture in a Globalized World by Peter Grant and Chris Wood. The theme of the book is the breaking down of trade and cultural barriers by commerce, including but not exclusively online commerce, and the attempts by smaller countries to preserve and enhance their own cultural output in the face of this challenge. They make a convincing case that a state-driven "cultural toolkit" including tools such as public broadcasting, quotas, subsidies, and more have been essential in helping a diversity of culture to survive and even, on occasion, thrive.

Needless to say, Anderson does not even begin to address issues of international cultural diversity beyond the fondness of online teenagers for Japanese anime films. Sitting in San Francisco, he does not seem to even notice the fact that there is a distinction to be made between American cultural consumption and that in other parts of the world. I wish I thought he had even heard of Grant and Wood, but they come from Canada so I would guess that he hasn’t. Google tells me that the only page outside this little corner of the Internet that mentions both "long tail" and "blockbusters and trade wars" is a bibliography page for a course on the Structure of the Book Publishing Industry in Canada from Simon Fraser University in Vancouver. The ability of online vendors to cross borders is a double-edged sword when it comes to diversity. The ability to keep diversity in One Big Virtual Tent will depend to a large extent on the ability of governments to regulate portions of that tent.

There is one scenario in which the Long Tail does lead to an increase in diversity compared to the physical world, which is the scenario of the Digital Vice (I’ve renamed it since Chapter 1). The variety of physical stores that unevenly drive an uneven amount of uneven variety may be replaced by a combination of homogeneous big-box stores that sell mainly best-sellers and online stores that sell best-sellers and everything else. In such a world, there is no doubt that the niche purchases will take place online, so that the online world will represent a Long Tail compared to the physical world. But it’s a grim outcome nonetheless.

The second question here is, what about the Long Tail of production represented by YouTube, Facebook, MySpace, Flickr, and the world of blogs and Wikipedia? To some extent I tackled this in the discussion of Chapter 5. There are, I would argue, two things going on here, neither of which is Long Tail. One is the moving online of social conversations, play, and pastimes. Writing a diary online does not make it more "production" than writing a diary at home. The shift online loosens some ties and builds others. We tend to end up with (as Yochai Benkler points out in The Wealth of Networks) a looser but wider set of connections than in the physical world – we inhabit networks rather than communities, with different networks for different parts of our lives. Again, Anderson has eyes only for the building of online networks, not the loss of those other contacts that they replace. He repeatedly welcomes the online world in terms of its potential for a democratic future, but such a future is far from assured. To take one example, while the Internet is a great source of information for those who oppose the US war in Iraq, it has failed to coalesce into a significant political movement in the way that opposition to Vietnam did. The opposition to globalization that crystallized around 1999 did so at a physical place (Seattle): the effects of geography are strong and not easily replaced. While the Internet may provide new opportunities for political networking, to the extent that it replaces physical world actions it will not promote a broadening of democracy.

The most interesting and promising aspect of Internet technology is the large-scale collaborative efforts represented by the peer production models of Wikipedia, open-source software, SETI@home and others. These are remarkable, although again they tend to be operations that replace Many Small Tents by One Big Tent – there are fewer of them, but each one is bigger – than in the physical world. The endless comparisons of Encyclopedia Britannica to Wikipedia are somewhat misleading, because it again neglects the complementary physical books (specialist reference material that doesn’t get into Britannica) that do not exist in the online world. Is there a big online reference for birdwatchers? I’m not sure, but my guess is that the ease of use of Wikipedia will make it the equivalent of many offline reference works, rather than a single general-purpose encyclopedia. In the offline world, there is no longer a need for Small Tent production – just put your material into the One Big Tent. Again, does this represent greater variety? In some senses yes, in some senses no.

So if there is a single image I’d use instead of the Long Tail, it’s the One Big Virtual Tent. It’s a tent that holds more than any of the Many Small Tents of the physical world, but which does not guarantee an overall increase in variety. And if you’re going to build One Big Virtual Tent, the chances are you won’t be building it from an out of the way place – to that extent, the revenue from the homogeneous variety of the online world is going to be finding its way to Silicon Valley rather than to your local community.