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Continuing the legacy of 'The Long Tail'

Daniel Terdiman CNET News

Published: 24 Jul 2006 16:45 BST

When Wired Magazine published an article called The Long Tail, it immediately became a phenomenon on the order of Malcolm Gladwell's book, The Tipping Point.

In the October 2004 article, Wired editor in chief Chris Anderson laid out the framework of a simple idea — one that was staring us right in the face. He explained how services such as Netflix, Amazon.com, Apple's iTunes and the like were allowing marginal songs, books or movies to get exposure and even to sell small, but respectable, numbers of units.

That's because, he argued, such aggregation services let people express preferences for the kind of music or movies they like, and then used those preferences to suggest additional items of interest. As consumers moved further out from the big hits, they entered the so-called "long tail", where even the 50,000th seller on Netflix could still make a little money.

Even better, from the perspective of consumers, such services meant that there was much greater choice available online than could ever be found in brick-and-mortar stores. Although that concept in and of itself wasn't surprising, entertainment-industry watchers had been conditioned to think that only hits sell. So the idea that even the bottom dwellers sell was a revelation.

After the success of his article, Anderson set out to expand it into a full-length book.

ZDNet UK’s sister site, CNET News.com, caught up with Anderson by telephone after perhaps one of the crazier 24 hours someone in his position could have. That's because on the very same day his book launched, Wired Magazine parent Condé Nast bought the online technology publication Wired News, reuniting the two entities for the first time in eight years.

Q: How did you come up with the phrase the "long tail"?
A: It comes from statistics. I was collecting data for some speeches in 2004, and looking at data from companies in the digital media space. And when you plot it out and rank the products on the horizontal axis and their sales or popularity on the vertical axis you get kind of a ski slope or shape. It's called a power law. And while you have the big hits largely on the left, and the niche on the right, that curve goes on forever. And where bricks and mortar inventories run out, the online inventory keeps going.

And I realised although no single product sold a lot, there were so many of them. So the size of the market was actually starting to rival the hits market. And that distribution is called a heavy-tailed or a fat-tailed or a long-tailed distribution. And the key bit is that it really is an unlimited shelf-space effect and that's the phrase I used. It's the phrase that resonated.

I understand (Netflix founder) Reed Hastings encouraged you to stick with the phrase?
Yeah, I had some PowerPoint presentations and I was calling it "The 98 percent rule", which was that in all these services they would find that no matter how much inventory they had, 98 percent of it is sold at least once a month. And this is very unexpected. Because of the 80/20 rule, we assumed after you get past the first 20 percent or so, there's very little demand. But we're finding that there's demand for everything. And slide 13 or something was the power law that looked at the tail itself, and that was called the "long tail". People were really focusing on that and Reed said, "That's your headline".

How surprised were you that your Wired article became this gigantic phenomenon?
Well, you know, I'm an egomaniac. I'm surprised that my other articles weren't. No, the answer is that I knew this was a really big deal. I knew that the observation that we could now look at the right side of the curve rather than just the left was really important, and I knew that it pretty much defined our culture and economics for the next few decades. By the way, I didn't invent this phenomenon.

The phenomenon has been out there ever since Jeff Bezos and Amazon, sometimes even before. But you know, we still hadn't really focused on how big the tail was. So it was clear that the rise of services…