It seems like a waste of bits to add another definition of the Long Tail into the blogosphere, but anyway, just in brief: With 1) the digitalization reducing or eliminating inventory costs, 2) the sophisticated production and distribution tools encouraging more creation, and 3) the online platforms enabling everyone to make comments and recommendation, there are more niche products/contents in any markets than ever before and the niches do account for a significant, if not major, part of the revenue.
Anderson makes this argument based on the same principle Shirky used for Here Comes Everybody. In the world of bits, free from the constraints of atoms, abundance rules instead of scarcity, and what used to be too expensive to do is now perfectly feasible. While Shirky focused on how the transition changed the way people form groups and take collective actions, Anderson analyzes how it transformed the consumer market. Without a worry about shelf space, retailers and content providers can offer an abundance of choices to satisfy every single customer’s need and taste. Niches are no longer negligible as a revenue source.
Born and raised in Tokyo, the city of the Long Tail where you can find almost every niche product and content that exists in the whole world (where else can you see a Spanish horror, a German experimental film, and a documentary on Tibetan Monk, in theaters on the same day?), I wasn’t too surprised by the market landscape Anderson described. Thanks to this cultural environment, I’ve been niche in pretty much everything from movies to music to reading. So I agree, from my own experience, with Anderson when he doubts Christine Rosen’s notion of “egocasting.” I don’t think I’m discouraged from cultivating the taste and shut myself in a cocoon. On the contrary, more choice always opens my eyes to the things I’d never be able to encounter within a mainstream and keeps me exploring.
Some bloggers interpret what this change in the market structure entails for nonprofit organizations. Jon Lebkowsky argues that the Long Tail enables ever more nonprofits to have a presence no matter how small they are, which means more competition for potential donors. Just as hits will be suffering as the tail gets longer, larger organizations will have a hard time maintaining the current level of donation, while smaller ones will benefit from niches. This is not bad for my client, TFT, which has just entered the U.S. charity market. It may not be easy for TFT to gain national visibility at once, but it can aim at geographical niches, as its activity involves local restaurants and food retailers.
While Anderson’s argument is powerful overall—he makes a particularly convincing case that neoclassical economics based on scarcity cannot explain the Long Tail market based on abundance by definition—, he is less eloquent on how, then, businesses should adopt to these new economic circumstances. The How-To chapter added to this longer edition does not cover anything more than Groundswell and other Business 2.0 books and articles do—listen to and monitor your customers, count on the power of word of mouth, don’t be afraid of losing control, etc. Actually, this blog post, commenting on Anderson’s book in the context of SEO, better summarizes the point in a more practical and compelling way (along with very cute graphics). The author suggests:
Don’t try to fight the big players with your own generic ‘everything for everyone’ bland offering. Instead, actively position your business in hundreds of niches.
After all, we have to be more finely tuned to each individual and keep seeking new niches to reach. Recent post on VolunteerMatch offers another interesting evidence of the end of mass-marketing in relation to nonprofits.
