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In this book, he details the shift from a hit-driven entertainment and media industry into one in which hits lose much of their importance, while much of the profit lies in selling the hundreds of thousands of non-hit titles. A crucial insight came when the CEO of a digital jukebox company asked him to estimate what percentage of the 10,000 albums available on the jukeboxes sold at least one track per quarter. Anderson guessed 50 percent, but was off by a wide margin, as the answer was 98 percent. The author then started investigating sales of companies such the music service Rhapsody, DVD rental service Netflix and online retailer Amazon. What he found was that while traditional retailers (think in this case Tower Records, Blockbuster and Waldenbooks) make most of their profits through a relatively small number of hits out of a restricted number of offerings, these new companies can expand their range of items enormously (at extremely low cost to them) and make substantial profits in the long tail of non-hit items that would not be profitable for brick-and-mortar stores. Anderson develops the concept into the central metaphor of a society characterized by abundance of content, rather than by scarcity (as when people had only a few TV or radio stations and whatever cultural fare the local record or book stores offered). Instead of a hit-driven culture, we are moving into a niche-driven ones, in which online aggregators (Amazon, eBay, iTunes, etc.) and filters (google, blogs, etc) offer an unprecedented variety of niche markets for almost any conceivable taste. At times, the argument seems a bit forced (as when the author includes Wikipedia in his discussion), but overall, The Long Tail is an insightful book. |
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