Posted by: Contributing columnist, CLARION LEDGER FEATURE, BUSINESS, September 23, 2015:
“It is estimated that a week’s worth of The New York Times has more information than a person was likely to come across in his or her lifetime in the 18th century.”
That’s a line from the video “Shift Happens” that I’ve often recommend to people since its first release in 2006. The video is filled with lots of interesting facts, but for some reason that line has always stood out as one of the more powerful ones.
Information explosion
We all know that over the past 20 years there has been an explosion in the amount of information available. And while it’s fairly obvious that the Internet has played a giant role in this explosion, the architecture, methodology and reasons for it are still somewhat obscure topics.
If you’ve read my columns before, you know that I love rules and laws that introduce order and organization to seemingly chaotic events, so I’m excited today to talk about “The Long Tail.”
“The Long Tail” was a 2004 article in WIRED magazine by Chris Anderson. The entire article isn’t that long, and I encourage you to look it up and read it online, but the caption does summarize the article very well: “Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.”
In case you’re still wondering what this “long tail” reference is all about, look at a normal statistical “bell curve.” It has a very high middle section. As you go down the curve, the curve gets lower and lower on the side. This is the tail. For something to be way out on the tail, it’s simply more unusual.
For something like music or movies, being out on the long end of the tail would be a niche song or film that simply isn’t well known to the masses.
Distribution
The key to understanding why the long tail has become so important is that prior to the Internet — when brick and mortar stores were the distribution channel — all distribution had a problem. Think about music stores or video rental shops. No store could afford to carry millions of titles since nearly everyone who walked in wanted only the popular titles.
It wasn’t BeBop Record Shop’s or Blockbuster’s fault they didn’t carry “everything.” They couldn’t make money if their titles gathered dust on the shelves. The Internet changed that.
Cheap distribution, cheap marketing and the ability to search digitally for everything you want and be watching or listening to it within minutes were all major disruptions to not only the music and video ecosystems, but to practically all products.
By 2004, Barnes & Noble was carrying around 130,000 titles at its average store, but more than half of Amazon’s sales were coming from titles not in its top 130,000. The implications are enormous, as pointed out by Anderson: “The market for books that are not even sold in the average bookstore is larger than the market for those that are.”
As more companies have understood the implications of “The Long Tail,” we’ve seen many brick and mortar stores using this trend for their advantage, too. Walmart’s giant Supercenters only have a tiny fraction of the products available on Walmart.com. They recognized they still were limited on what they could stock. Other brick and mortar retailers are trying to do much of the same thing.
What is really exciting, though, is the next evolution of the long tail — an evolution that couldn’t have been anticipated in 2004. At that time, the explosion in content hadn’t happened yet because the long tail was just about distribution. In 2005, an unknown startup went live as www.youtube.com and that was the first step toward the proliferation of content created for the long tail — not for mass distribution. Everything from podcasts to garage film studios would emerge. This was the true enabler of the explosion of information we’ve seen in the last 10 years.
In next week’s article, I’ll share how we at Innovate Mississippi see some impressive Mississippi startups, like VSporto and Podastery, who are taking advantage of these key trends and creating new businesses.
Tony Jeff is the president and CEO of Innovate Mississippi. He can be reached at tjeff@innovate.ms.