{"id":475,"date":"2006-07-26T10:38:19","date_gmt":"2006-07-26T16:38:19","guid":{"rendered":"https:\/\/www.roughtype.com\/wp\/?p=475"},"modified":"2006-07-26T10:38:19","modified_gmt":"2006-07-26T16:38:19","slug":"how_long_is_the","status":"publish","type":"post","link":"https:\/\/www.roughtype.com\/?p=475","title":{"rendered":"How large is the long tail?"},"content":{"rendered":"

In his column in the Wall Street Journal today, Lee Gomes tries to debunk<\/a> Chris Anderson’s Long Tail theory, and on his Long Tail blog today, Anderson tries to debunk<\/a> Gomes’s debunking. It’s an interesting – and important – debate, and I find myself agreeing with both gentlemen.<\/p>\n

Gomes’s main point is that the Long Tail has been oversold – that it’s not as long or as important as it’s been made out to be. He writes:<\/p>\n

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In the book’s main sections, Mr. Anderson writes that as things move online, sales of misses will increase – so much so that they can equal or exceed the sales of hits. The latter is the book’s showstopper proposition; it’s mentioned twice on the book’s jacket.<\/p>\n

I was thus a little surprised when Mr. Anderson told me that he didn’t have any examples of this actually occurring. At Netflix and Amazon, two of his biggest case studies, misses won’t outsell hits for at least another decade, he said. None of these qualifications are in the book.<\/p><\/blockquote>\n

Anderson responds:<\/p>\n

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First, the book doesn’t claim that there are any cases where sales of products not available in the dominant bricks-and-mortar retailer in a sector (my definition of “tail”) are larger than the sales of products that are available in that retailer (“head”).<\/p>\n

What it does say is that the current data at Rhapsody, Netflix and Amazon show that the tail amounts to between 21% and 40% of the market, with the head accounting for the rest. Although I don’t discuss this in detail in the book, in the case of Rhapsody, the trend data suggests that the tail (as defined above) actually will equal the head within five years.<\/p><\/blockquote>\n

I have no doubt that the Internet has created a Long Tail effect, making it easier for customers to find and buy rare or specialized products. Anderson’s book provides pretty compelling evidence that that’s true. And it’s important. But I’m still not quite sure if it’s really<\/i> important or just mildly important. Some of my doubts stem from a crucial statistical change, relating to Amazon’s sales, that’s happened between the publication of Anderson’s original Long Tail article in Wired in October 2004 and the publication of the book. In the Wired article, Anderson wrote<\/a>:<\/p>\n

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What’s really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you’ve got a market bigger than the hits. Take books: The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are. In other words, the potential book market may be twice as big as it appears to be, if only we can get over the economics of scarcity. Venture capitalist and former music industry consultant Kevin Laws puts it this way: “The biggest money is in the smallest sales.”<\/p><\/blockquote>\n

That claim becomes much more modest in the book<\/a>:<\/p>\n

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What’s truly amazing about the Long Tail is the sheer size of it. Again, if you combine enough of the non-hits, you’ve actually established a market that rivals the hits. Take books: The average Borders carries around 100,000 titles. Yet about a quarter of Amazon’s book sales come from outside<\/i> its top 100,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is already a third the size of the existing market – and what’s more, it’s growing quickly. If these growth trends continue, the potential book market may be half again as big as it appears to be, if only we can get over the economics of scarcity. Venture capitalist and former music industry consultant Kevin Laws puts it this way: “The biggest money is in the smallest sales.” [pp. 22-23]<\/p><\/blockquote>\n

There’s a very big difference between “more than half” of sales lying outside the top 130,000 sellers and “about a quarter” of sales lying outside the top 100,000 sellers. (Kevin Laws was right in the context of the article, but he’s wrong in the context of the book.) Anyone who’s followed Anderson’s blog knows the story of this change. To his credit, he carefully documented the statistical issues in posts like this one<\/a>. The overestimation of the size of the Long Tail in the article was due to an error in an academic study of Amazon’s sales that Anderson relied on. (Amazon does not disclose detailed breakdowns of its sales.) The error’s been corrected in the book – with the estimated size of the current Long Tail scaled back – but it still influences perceptions of the Long Tail’s impact, and is even, as Gomes points out, echoed in the book jacket copy. (Please note that I don’t hold authors responsible for what’s on a book jacket.)<\/p>\n

But the 25% is not the whole story, either. To get a clear sense of the impact of the Net on the Long Tail, you’d need another statistic: Before the Internet came along, what percentage of total book sales lay outside the 100,000 titles stocked in a typical large bookstore? There have always been specialized bookstores, selling everything from religious and spiritual books to textbooks to foreign-language books to used and out-of-print books to poetry books (though their ranks have been pruned by Amazon and other online sellers). And there have always been small presses – literary, academic and technical – selling books directly, through the mail. And you’ve always been able to go to a bookstore and order a book that it didn’t carry on its shelves. How much of the Long Tail of books represents old demand moving through a new channel, and how much represents new demand? Only by knowing how big the old Long Tail was can you understand how much larger it’s grown with the Internet.<\/p>\n

My guess – and it’s only a guess – is that the Internet Long Tail is substantially larger than the pre-Internet Long Tail, but that, in its current form, it amounts to something less than a monumental change in the market. The important question, then, is this: Is the Long Tail going to get a lot bigger, or has most of the growth already happened? Although Anderson and Gomes probably have very different views on that question – Anderson sees evidence that the tail is expanding, while Gomes sees evidence that it isn’t – they would both, I think, agree on its fundamental importance. Anderson’s Long Tail theory explains a lot about how the Internet has influenced markets, but the true extent of the Long Tail and its impact remains to be seen.<\/p>\n","protected":false},"excerpt":{"rendered":"

In his column in the Wall Street Journal today, Lee Gomes tries to debunk Chris Anderson’s Long Tail theory, and on his Long Tail blog today, Anderson tries to debunk Gomes’s debunking. It’s an interesting – and important – debate, and I find myself agreeing with both gentlemen. Gomes’s main point is that the Long […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-475","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=475"}],"version-history":[{"count":0,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/475\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}