Review: The Long Tail

Title: The Long Tail: Why The Future of Business is Selling More of Less
Author: Chris Anderson
Publisher: Hyperion
Pages: 267
ISBN: 978-1-4013-0966-4

Business books are a dime a dozen. Each purports to show the reader the path to business nirvana. Ever increasing earnings! Ever stronger competitive position! Yet there are very few which provide a genuine insight. A new way of looking at our business environment and the ways in which companies can interact with customers. The Long Tail by Chris Anderson is one such book. It examines the impact of the Internet on consumer choice and how companies can take advantage of this medium which has been in widespread commercial domain for more than 10 years now but whose impact is still being explored by both businesses and consumers alike.

Every transaction has an associated information flow. When I say transaction, I mean the give and take of objects or services of value between atleast 2 parties. It does not really matter whether the transaction has a monetary aspect or not. What matters is that a transaction has taken place. In this situation, there is also an associated information flow. Before the advent of computers and definitely before the Internet came in widespread use, there was generally a high cost of tracking and utilizing this information flow. One of the most important things that computers have done is that they have progressively reduced the cost of tracking and utilizing the information flow associated with transactions. However, while this gradually became clear on the business side (and there is still confusion amongst companies about this particular aspect and how best to utilize it), to-date, there has been confusion about the impact of the Internet on the consumer side. What has been clear is that the Internet is a great enabler of information to consumers and that it has potential to dramatically increase consumer choice.

What The Long Tail does is that it provides a framework to more properly address these two issues. Exactly how does the Net increase consumer choice and how do companies go about delivering that choice is specially addressed in this book. Mr. Anderson's basic thesis is that the offline world has a limited capacity to carry products. Thus a typical music store can only hold a certain number of titles no matter how large it may be. This hard physical limitation compels companies with an offline presence to make hard choices as to which products they will carry. As a result, only those products are chosen which have the potential to become blockbusters or at the very least perform at a certain minimum level. What the Internet does is that it removes this limitations and allows companies to carry a much wider choice of products. This is where the Long Tail concept comes in. While individually the products at the long tail may not sell much, collectively these products can sell as much as or perhaps even outsell the blockbuster products and who knows that a long tail product may end up as a blockbuster!

However, there is a note of concern that Mr. Anderson does not properly address. While it may be true that offering long tail products will enable consumers to choose products that they may prefer over the more mainstream ones, they do need a starting point from which to start their exploration. For unlike mainstream blockbuster products, long tail products require a much greater degree of exploration from the consumer. Companies can alleviate this aspect to some extent by tracking past purchases and offering recommendations much as Amazon does. However, this is still very much a field where there is a large degree of trial and error. The algorithms used to make such recommendations still need to be fine-tuned.

With this caveat aside, this is an important book. One that should be read by executives and entrepreneurs alike.