The Business Book

209

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

WORKING WITH A VISION

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

Head

Long Tail

SALES

PRODUCTS