The Business Book

(Joyce) #1


The Long Tail is based on a representation of a
demand curve of the future marketplace (sales are
shown vertically, products horizontally). Author
Chris Anderson suggests that overall sales of niche
products at the thin “tail” of the curve may be
greater than more popular products at the “head.”

See also: Beating the odds at start-up 20–21 ■ Gaining an edge 32–39 ■ The weightless start-up 62–63 ■
Thinking outside the box 88–89 ■ Small is beautiful 172–77 ■ M-commerce 276–77 ■ Benefitting from “big data” 316–17


vertical axis, and quantity on the
horizontal axis, and demonstrates
that people buy more as the price
falls. Anderson represents sales on
the vertical axis and the number
of products on the horizontal axis,
showing that growth in many
industries will come from the niche
end of demand—the Long Tail.

Removing barriers
Supply was once constrained by
factors such as cost of production,
physical space for storage, and cost
of distribution. Digital processing,
online ordering, and electronic
distribution have removed many
of these barriers. Selling smaller
numbers of a greater range of items
can result in higher overall sales and
profit than selling common items.
Books, music, and movies are
classic examples of the Long Tail
theory. A traditional bookstore can
only stock books that are likely to
sell. Amazon, however, can list
every book, even though some may
never be sold. Less popular titles
that are not stored in its vast
warehouses can be shipped direct

from a publisher to meet individual
demand. Combined sales of one-of-
a-kind books may be larger than
that of bestsellers, and so may equal
more profit. Similarly, iTunes can
offer a longer list of music than any
physical store, and Netflix can
stream almost any film into your
living room. When offered almost
limitless choice, consumers exert
their preferences and spend money.
Asia is a large and growing
market, but it is fragmented by
many different cultures. Individual
countries offer numerous niche
opportunities for companies that

can tailor products and services by
language and ethnicity, rather than
offering to the mass market. Start-
ups are recognizing the Long Tail
benefits and using the region’s
diversity to their advantage. One
example is Brandtology, an online
company that analyzes social media
and online chat, in local languages,
for clients in Singapore and Hong
Kong. Native speakers of languages
such as Mandarin, Japanese, and
Korean offer social-media analysis
to provide localized insights and
interpretation of key issues within
a particular culture. ■

Chris Anderson Author and entrepreneur Chris
Anderson was born in London
in 1961 and moved with his family
to the US at five. He studied
physics at George Washington
University, then quantum
mechanics and science journalism
at the University of California,
Berkeley; he later was a
researcher at Los Alamos
National Laboratory. After
working on two leading scientific
journals, Nature and Science, he
joined The Economist, holding
various positions (in London,
Hong Kong, and New York), from
technology editor to US business

editor. Chris Anderson joined
Wired magazine in 2001,
where he was editor-in-chief
until 2012. He currently lives
in Berkeley, California, and
is the CEO of 3D Robotics, a
drone manufacturing company.

Key works

2004 “The Long Tail” (published
in Wired magazine)
2006 The Long Tail: Why the
Future of Business is Selling
Less of More
2012 Makers: The New
Industrial Revolution


Long Tail


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