WSJ/HBR: A Manufactured Long Tail Debate?

Posted by on July 2, 2008 at 7:29 am.

A friend of mine forwarded Lee Gomes’s WSJ article questioning Chris Anderson‘s Long Tail theory, referencing a recent Harvard Business Review article by Anita Elberse.

Setting aside Lee’s original Long Tail skepticism, possibly because it suggested the blogosphere presented an opportunity to impact journalists at the head (e.g. WSJ columnists?); I emailed the following thoughts to my friend. This feels like an attempt by Anita to manufacture some Long Tail controversy to benefit her research/writing, much of her observations actually match what Chris suggested in The Long Tail.

Did I miss something? Any thoughts?


From: Dan Rua [mailto:dan@inflexionvc.com]
Sent: Wednesday, July 02, 2008 10:19 AM
Subject: RE: Long Tail questioned
Great article. I read Chris Anderson’s response earlier this week. I felt he was overly gracious about her attack on the Long Tail, but he did share some nuggets such as: “So in the data she cites, the head of the online music market represents 32% of the all plays, and the tail represents 68%. That’s certainly no challenge to the Long Tail theory; indeed, it’s even more tail-heavy than the data I cited in my book (probably because I used a more generous estimate of 50,000 tracks for Wal-Mart’s inventory).”

I’d share that Lee’s WSJ summation doesn’t match what I got out of reading Long Tail: “The Web is clearly changing cultural consumption patterns, but those changes don’t seem to involve the sort of drastic flattening of demand curves predicted by the Long Tail.”

I may have missed Long Tail’s punchline, but I didn’t read the Long Tail to predict a drastic flattening of demand curves or that hits wouldn’t continue to be valuable. Rather, I read it to admit a head and tail exists, but the historically inaccessible (due to physical costs etc.) long-tail can become lucrative because of online zero/low costs of manufacturing/distribution. Google’s $5B+ long-tail adsense business is a very concrete example of that opportunity.

It’s interesting that the opening “aha” example in the HBR article focuses on physical goods/expense decision-making: Grand Central Publishing spent $7M marketing their top book titles and $650K marketing their other titles, and the top titles were more profitable. That example doesn’t even match Long Tail theory which would have suggested spending almost zero marketing the long-tail, but making it available digitally for consumers to find/discover.

Despite the HBR article’s attempt at Long Tail controversy, it’s nice to see that it ends with advice matching what I got out of The Long Tail in the first place. For example: “1. If the goal is to cater to your heavy customers, broaden your assortment with more niche products. 2. Strictly manage the costs of offering products that will rarely sell. If possible, use online networks to construct creative models in which you incur no costs unless the customer actually initiates a transaction.”

I think the combination of Long Tail and this article suggests: 1) there is opportunity in the head and 2) there is opportunity in the tail. I’ll buy that.

Cheers,
Dan…


UPDATE 07/03: Erik over at TechCrunch came away with a very similar analysis shortly after mine. In fact, his summation sounds strangely familiar:
“In the end, Elberse presents a false dichotomy. The choice is not head or tail. It’s both.”

Related posts via Techmeme: Matt Rosoff, Michael Masnick, Matt Asay, Alan Patrick, Jackson West, Slashdot, Coolfer, David Utter
Related images: the long tail, chris anderson, anita elberse, lee gomes, wall street journal

Leave a Reply


Disclosure Policy
Advertisment ad adsense adlogger