Truthiness of The Long Tail

Wall Street Journal online puts some stats on The Long Tail and claims it’s mostly bunk.

Just a taste:

By Mr. Anderson’s calculation, 25% of Amazon’s sales are from its tail, as they involve books you can’t find at a traditional retailer. But using another analysis of those numbers — an analysis that Mr. Anderson argues isn’t meaningful — you can show that 2.7% of Amazon’s titles produce a whopping 75% of its revenues. Not quite as impressive.

Another theme of the book is that “hits are starting to rule less.” But when I looked online, I was surprised to see what seemed like the opposite. Ecast says 10% of its songs account for roughly 90% of its streams; monthly data from Rhapsody showed the top 10% songs getting 86% of streams.

It’s entirely possible the Long Tail is the beneficiary of a degree of Truthiness (the desire for something to be true independent of it’s objective truth-fullness).

One interesting thing about the Long Tail is how it has all the components any good story needs to spread.

  • It’s an original idea that captures people’s imagination.
  • It’s message speaks to a person with a certain worldview (internet is changing everything)
  • It’s fairly easy to understand, repeat and tell others.
  • The teller sounds smart by telling others about it and therefore more likely to spread it around.

Perhaps the biggest lesson about the Long Tail is not in the theory itself – rather that it’s a living example of Seth Godin‘s point in “All Marketers Are Liars” – it’s the story stupid.

UPDATE:  Long Tail Author Chris Anderson replies to the WSJ point by point on the Long Tail blog here

A taste:

As I wrote in this post, trying to define “head” and “tail” in percentage terms is meaningless in a market with unlimited inventory, because the denominator can grow infinitely large. Let me give you an example of why this doesn’t work:

Let’s say you have 1,000 items and the top 100 (10%) account for 50% of the sales. Then you add another 99,000 items to the catalog, and the sales of that top 100 fall to just 25% of the total, while it takes another 900 items to make up the next 25%.  I would say that demand has shifted down the tail, because those top 100 items have dropped from half the market to just a quarter of it and the rest of the demand is spread over more items.

But by Gomes’ math, we’ve gone from a market where 10% of products make 50% of the revenues to one where 1% of the products make 50% of the revenues–in other words, it’s become more hit-centric. I think this is simply a misunderstanding of basic statistics, and I’m disappointed that Gomes, despite many emails from me and at least one economist to him on this point, chose to simply say that I don’t agree with that approach (but not why).

And the final lesson is this – no longer is the critic OR the market the final voice.  The internet enables dialog – conversation.  And everyone can participate.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: