The long tail concept originally appeared as an article in Wired Magazine in 2004 and then in 2006 it was published as a book. In his original article Chris Anderson writes, “The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.”
Chris was commenting on a trend that he observed in the marketing of entertainment products. Traditional bricks and mortar retailers can only carry so much inventory. They can only afford to stock “economic hits.” Using booksellers as an example, stores like Barnes & Noble primarily stock bestsellers because there is just not enough shelf space to carry “everything for everybody.” So “retailers will carry only content that can generate sufficient demand to earn its keep.” However, there is plenty of entertainment whether it is books, movies or music with a “potentially large even rapturous national audience.” This is the long tail. It is the demand for niche products and what is “really amazing about the Long Tail is the sheer size of it.”
“When you think about it, most successful businesses on the Internet are about aggregating the Long Tail in one way or another. Google, for instance, makes most of its money off small advertisers (the long tail of advertising), and eBay is mostly tail as well – niche and one-off products. By overcoming the limitations of geography and scale, just as … Amazon has done, Google and eBay have discovered new markets and expanded existing ones.”
In this article, Chris sites the new rules for this emerging online market. The two that are applicable to the real estate industry are
RULE ONE: MAKE EVERYTHING AVAILABLE
“There are any number of equally attractive genres and subgenres neglected by the traditional DVD channels: foreign films, anime, independent movies, British television dramas, old American TV sitcoms. These underserved markets make up a big chunk of Netflix rentals. Bollywood alone accounts for nearly 100,000 rentals each month. The availability of offbeat content drives new customers to Netflix – and anything that cuts the cost of customer acquisition is gold for a subscription business. Thus the company’s first lesson: Embrace niches.”
“Netflix has made a good business out of what’s unprofitable fare in movie theaters and video rental shops because it can aggregate dispersed audiences. It doesn’t matter if the several thousand people who rent Doctor Who episodes each month are in one city or spread, one per town, across the country – the economics are the same to Netflix. It has, in short, broken the tyranny of physical space. What matters is not where customers are, or even how many of them are seeking a particular title, but only that some number of them exist, anywhere…”
RULE TWO: HELP ME FIND IT
Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare.
“Such is the power of the Long Tail. Its time has come.-“
