The Long (But Not Necessarily So Valuable or Relevant) Tail

This is a continuation of the discussion yesterday, wherein I share some of my thoughts on the work of Chris Anderson, all the while keeping a straight face pretending that he cares what I think.

Specifically, I’m going to talk about the Long Tail concept.  (If this isn’t familiar to you, catch up here.)

Restated, the idea is that a universe in which it costs nothing for iTunes to have millions and millions of artists’ music available for sale is one in which what’s important is not as much the “head” of the sales curve (the few things at the top that sell the most) but the “tail” (the long, flat part that contains the many, many, many things that only sell a copy or two.)

Anderson very rightly says that a physical retailer couldn’t possibly afford to stock even one copy of the CD single of every artist on iTunes, but that a virtual retailer like iTunes can.  Therefore, the cumulative effect of all these one-time sales is huge, and that’s the Long Tail.  It’s the concept of infinite, free shelf space, and it’s a truly new development in the world.

So the Long Tail is a real thing and worth noting, but how important is it?  To be even more specific, how important is it to you in your business?

In other words, the Long Tail may be a perfectly valid observation of reality, but for you, it could be either unimportant or deceptive in its implications.

I don’t have any iTunes sales data.  For some crazy reason, Apple doesn’t share that with me regularly, but I would be willing to bet just about anything that if Apple had to sacrifice either the top 1% of titles (let’s say, for argument’s sake, the 10,000 most popular albums or 100,000 most popular singles) or the bottom 50%, they’d cut the bottom 50% loose in a laugher.

If Apple were to cut the top 1%, not only would they be giving up more sales, I believe, but they’d taking away much of iTunes appeal.  Nobody wants to shop in a music store where the top 10,000 albums aren’t.  (Remember, Tower Records was successful because it stocked the top 2000, which seemed like everything in existence at the time.  10,000 is way, way deeper into the popularity curve than that, but still conceivably just 1% of the iTunes catalog.)

Cutting the 1% kills the business.  What happens if you cut the bottom 50%?  The artists that maybe sell about one track a month?

You might lose some sales. You’d certainly not be selling those titles anymore, but in my experience, most of those sales would be replaced by people buying other things.  Buying from the top 50%.

In fact, it’s just possible that they’d buy more because there would be fewer titles to wade through.  I don’t have any empirical data on that with regard to Apple specifically and catalog depth is definitely important, but only to a point.

It’s nice to have infinite shelf space, but there is one place where shelf space is not only not infinite, but scarce: the human mind. (Check out Barry’s Schwartz’s “Paradox of Choice” talk at TED if you want more on what happens in the face of too many choices.)

Would sales on iTunes go up if they dropped the Long Tail?  Maybe.  They’re smart guys and gals; they’ve probably thought of this, and it may be the case that even if true, they’d rather have the catalog than the incremental improvement in sales.

But what about you?  Can you make a business out of the Long Tail?  Should you take your focus off the top half of all the products you sell and chase the bounty of the Long Tail?

I think not.

If you’re Apple, say, or Google, sure.  The Long Tail is a nice add-on that comes to you as a bonus of being the one who rolled up a massive market, and since it doesn’t cost you anything, why not?

It doesn’t cost Apple anything to make a few hundred thousand musical acts happy with their service, does it? Not even in terms of time and energy focused away from the products more people like?  Remember, we’re not talking about the scrappy anarcho-punk band with a following in Salt Lake City that sells 100 tracks a month.  We’re talking about musicians two orders of magnitude less popular than them.

My experience tells me making the product work for that group is hard, and they need support.  They demand attention and get it, and that’s a very real cost.

So before you go sign up to build a Long Tail business, I’ll give you one stat from Goldstar.  In the month of July, we had a handful of individual events which outsold the lowest selling 50% of our events combined.

Even if Apple is much, much better than us at getting value for the Long Tail (and I’m sure they are), it’s still a long way to travel down a sales curve to make a living.