Essay About Long Tail And Lower Itpull Consumers

The Long Tail by Chris Anderson – Highlights
Essay Preview: The Long Tail by Chris Anderson – Highlights
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The Long Tail:Given availability, a large number of obscure items can sell as well as a small number of popular itemsDue to limited physical space, retailers only carry content that can generate enough demand to pay off The solution was to only sell the hitsEXAMPLE:1988: Joe Simpson writes Touching the Void & receives good reviews, but only modest success1998: Jon Krakauer writes Into Thin Air, a publishing sensationTouching the Void suddenly starts to sell againRandom House rushes a new edition to keep up with demandBook stores place it next to Into Thin AirIFC Films releases a docudrama of the storyTouching the Void OUTSELLS Into Thin Air by more than 2:1WHY? Amazon placed it on the suggested reading listRHAPSODY:No physical limitationNot only are their top 100,000 tracks streamed at least once a month, so are their top 200,000, top 300,000 and top 400,000“What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?”Most people guess 20 percentThe 80-20 rule (Pareto’s Principle)Only 20 percent of major studio films will be hits. Same for TV shows, games, and mass-market booksMajor-label CDs – < 10% are profitableBut the right answer is 99 percent, says Vann-AdibeThe CEO of Ecast, a digital jukebox companyWALMARTAs egalitarian as Wal-Mart may seem, it is actually extraordinarily elitist. Must sell at least 100,000 CDs to cover overhead & make a sufficient profitLess than 1 percent of CDs do that kind of volume.RULES OF THE LONG TAIL:Make everything availableBring customers down the Long Tail by first creating itNetflix embraces nichesOffers offbeat content which drives new customers Cuts the cost of customer acquisition which is key for a subscription companyNetflix has, in effect, broken the tyranny of physical spaceCut the price in HALF… now lower itPull consumers down the tail with lower pricesUse a two- or three-tiered pricing structure to pull consumers down the tail with lower pricesiTunes:New and popular songs (the hits) are usually around $1.29 per songLess popular and older songs are either .99 cents or .69 centsHelp me find itUse recommendations to drive demand down the Long Tail.“Great Long Tail businesses can then guide consumers further afield by following the contours of their likes and dislikes, easing their exploration of the unknown”Pandora does this with the thumbs up/thumbs down buttons and radio channels based on music by a similar artist, within a similar genre, etc.60% of Netflix rentals come from recommendations based on browsing behaviorThe success of the long tail comes from providing the hits and leading consumers to the obscure