Nobody could accuse Chris Anderson of an unseemly rush to get The Long Tail into print. Having first set out the idea in a 2004 article in Wired magazine (of which he is editor-in-chief), it has taken him almost two years to publish the follow-up book. Unfortunately, his theory has advanced little during that time.
His original premise is simple. Consider a high-street bookshop. No matter how big the store, it can only stock a fraction of the books that have ever been published. Compare this with an online bookstore, such as Amazon, which doesn't suffer from the space constraints of a book shop. Not only does it work from huge out-of-town warehouses, but by using print-on-demand publishers and allowing individual sellers to advertise their goods through its site, it has access to a huge offsite inventory. Amazon can theoretically offer any book in print (and many that aren't as second-hand stock).
In traditional shops, the vast majority of sales come from a small proportion of its stock. This is known as the 80/20 rule 80% of sales come from 20% of titles. Anderson's claim is that for many e-retailers, such as Amazon, the 80/20 rule doesn't apply. Yes, the most popular titles still account for the bulk of sales, but there is a significant demand for even the most obscure titles including things that a normal store would never stock.
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In other words, the sales curve has a flatter head and a longer, fatter tail.
And, crucially, since the e-retailer's costs are so different to a high-street retailer's, items that might sell one copy a year are still profitable. (The purest example of this is digital-goods retailers, such as iTunes, whose marginal storage costs for an item are non-existent; a song is just a few megabytes on a vast server.) All this is good news for e-retailers (more profitable sales), consumers (more choice) and producers/creators (more chance of getting products on sale).
That, in a nutshell, is Anderson's idea and it made for a very insightful article. But it hasn't expanded into a very substantial book. At times, Anderson seems to be running out of ideas; he repeats similar case studies, tries to expand the premise into areas where it doesn't fit and speculates unconvincingly about the impact it will have on society and culture. Meanwhile, because he's trying to catch a mass-market audience, his writing displays a frustrating lack of rigour; more facts and less guesswork are needed. Ultimately, The Long Tail isn't a waste of time for a reader new to the concept, but it will feel like a wasted opportunity to anyone else.
Cris Sholto Heaton
The Long Tail is published by Random House and costs £17.99. To buy it from the MoneyWeek bookshop for £10.79 plus £2 p&p, call 01730-233870, or visit the Shop at www.moneyweek.com.
Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.
Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.
He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.
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