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Anderson Addresses Latest Long Tail Challenge

Thursday, November 20, 2008
by  presnikoff

Chris Anderson has helped to define early, digital media thinking, thanks to his groundbreaking, Long Tail theory.  In its essence, the theory (first published in October, 2004) argues that the internet helps to distribute attention towards a broader collection of content, the Long Tail, and dissipate the power of concentrated blockbusters.  The conditions of potentially infinite content availability and a massive consumer audience allows stores to profit from this newfound niche, instead of racking heavy sales from a limited group of blockbusters.

But a number of researchers have started to question the theory, particularly as it relates to its effect on the blockbuster.  That includes researchers from influential institutions like Harvard University, and just recently, Google.  "I would like to tell you that the internet has made such a level playing field that the Long Tail is absolutely the place to be, that there's so much differentiation, so much diversity, so many new voices.  I'd love to tell you that that's in fact how it really works," said Google chief executive Eric Schmidt, during a recent interview with McKinsey & Company.  "What really happens is that we follow what's called a powerlaw.  A powerlaw has the property that a small number of things are very highly concentrated and most things have relatively little volume."

Direct contradiction?  Anderson may be less vigorous in his defense of the theory than many would like, though the discussion is nuanced and full of ongoing questions and debates.  In response to the Schmidt assessment, Anderson notes that a dense concentration does exist at the head, though the Long Tail has always considered this.  The rest is a debate over how concentrated and powerful those those top players ultimately become.  "Powerlaws may indeed create bigger fish, but the Long Tail is all about the bigger pond," Anderson said.

Actually, Anderson also addressed another challenge of the Long Tail, one that revolves around revenue.  Instead of spilling riches into the coffers of niche artists and producers, the Long Tail has failed to spread a bonanza, though Anderson also conceded this point.  "It's hard to make money in the Tail," Anderson said.  "As Schmidt notes, it's also hard to make money if you don't have a Tail (to satisfy minority taste, which improves the consumer experience), but the revenues are disproportionately in the Head."



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