The tail might win
Very nice article in wired about changes in the distribution mechanisms that drive our economy around industries like books and cds. It’s called The Long Tailand it shows that things might be changing even further than we would have thought, and that just because we suddenly can link between things, recommend based on patterns and from inventories that need not be physically there.
_With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.
_ A good example of this is Wal-Mart: _Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit; less than 1 percent of CDs do that kind of volume.
_ What this means is that most CDs out there will never be sold, not because they won’t be bought, but because they don’t get shelf space. Sure, you might not be a big hit selling 5 CDs a year, but this is where the long tail comes in. The article goes on to make an example of Rhapsody, an online subscription-based streaming music service.
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Not only is every one of Rhapsody’s top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it’s just a few people a month, somewhere in the country.
This is the Long Tail.
_The examples go on. Barnes&Noble carries 130k books and more than 50% of Amazon’s sales do not come from these same books! I am starting to have the slight feeling that the tail might win ;)