What The Hell Is... The Long Tail?

February 19, 2008 12:00 AM

The Long Tail is a new business philosophy that suggests that many small markets can be worth as much, or more, than one huge market. But for that to hold true, consumers must have equal access to companies of all sizes via a marketplace like the Internet.

"It's an embarrassment of niches," says writer Kevin Kelleher.

The Long Tail means that as a company's distribution power increases, it can sell a higher volume of different items, rather than focusing on a select group of products. The Long Tail eliminates the need for bestsellers.

The Internet has played a critical role in the development of the Long Tail because it has made hard-to-find products readily available. As a result, corporations have been able to monetize demand as the opportunity cost of marketing to smaller demographic groups has decreased.

Origin

The phrase first entered the lexicon in October 2004 when Wired editor Chris Anderson wrote an article about the business models behind Amazon and Netflix - it's a concept that he would expand upon in his book The Long Tail: Why The Future of Business is Selling Less of More.

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