Long Tail Dead?

by: Matt Stoller

Thu Nov 20, 2008 at 09:50


One of the key concepts behind libertarian techno-utopianism and the lack of social awareness in Silicon Valley is the 'Long Tail', this notion that while there is a bunch of economic activity concentrated in 'hits', there is a huge amount of activity located in millions of non-hit products.  For instance, Britney Spears sells five million copies of her record, but 5000 cool independent artists will also sell 1000 copies of their record.  This will lead to a wonderful sprouting of innovation and social justice for all, along with the cool inequality that neoliberals love because they can still become billionaires and keep their companies safe from anti-trust investigations.

Tom Slee has been pointing out for years that the Long Tail concept is not supported by data, and it seems like he's finally won the debate.  I don't know what public policy consequences this entails, but the Long Tail concept was part of the set of ideas suggestive that the internet and transparency and its rich-friendly cousins would solve all social ills without the need for unions and government action and other stupid things progressives tend to like.  The internet's very nifty and transformative, but public policies premised on utopian liberatarian concepts probably won't work.
Matt Stoller :: Long Tail Dead?

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Long Tail Dead? | 24 comments
Huh (0.00 / 0)
I hadn't really heard the "long tail" discussed in this context; it was always in reference to pop-culture and entertainment. The example I always heard was Firefly, which was a failure as a TV show when it first aired, but because we Joss Whedon fans are fucking insane, there's a long tail where the small but devoted audience makes it something of a success over the long term.

Conduct your own interview of Sarah Palin!
The Long Tail is Dead. Long Live the Long Tail. (4.00 / 5)
I haven't read the McKinsey research yet, but I know a lot of the power law literature pretty well and wouldn't read too much into this.

It isn't so much that the Long Tail is dead as it is that a common mistake about Long Tails (made by Anderson in his book) has been corrected.  Power Law distributions were first discovered by Pareto in the 1600s and have often been called "Rich Get Richer" distributions.  That longer tails mean increased inequality has sort of been a truism about this subject matter from the get-go.

Anderson's point is primarily that decreased online transaction costs allow for a fuller realization of the demand curve, or, put another way, you'll have more niches thrive when there isn't the high barrier to entry presented by traditional publishing practices (Clay Shirky's book presents a very readable description of all this).  That point continues to be true.  The "correction" here is that Anderson also thought that the rise of niches meant a decline in inequality.  On that point, he was simply incorrect.

This might mean the downfall for some techno-libertarian public policy proposals, but just as important, it hopefully means that we've gotten incrementally better at understanding the mechanics of the world around us (both online and off).

P.S. Joss Whedon fans are fucking awesomely insane.  And Firefly is an okay example, but Doctor Horrible is a much better one.  Niche hit, would never have existed under traditional production practices.  

...Oh boy, look at my wrist, I've got to go.

Good Stuff, But For Pareto's Dates (0.00 / 0)
Pareto 1600s?  Not so much:

Vilfredo Federico Damaso Pareto (IPA: [vil'fre:do pa're:to]; July 15, 1848 - August 19, 1923), or Fritz Wilfried Pareto, was an Italian sociologist, economist, and philosopher. He made several important contributions, particularly in the study of income distribution and in the analysis of individuals' choices. He introduced the concept of Pareto efficiency and helped develop the field of microeconomics.

Other than that, spot on.

Whedon fan here.  But not obsessive news follower.  Anyone know the latest on Dollhouse?

"Senate passes expanded GI bill despite Bush, McCain opposition"

[ Parent ]
Man... (0.00 / 0)
I knew I should've Wikipedia'd that before pressing submit.

Oh how I wish I had an embarrassed-face emoticon now...

[ Parent ]
You Don't Have An Embarrased-Face Emoticon??? (0.00 / 0)
How embarrassing!

Now you really need an embarrased-face emoticon!

"Senate passes expanded GI bill despite Bush, McCain opposition"

[ Parent ]
Long Tail and Pareto (0.00 / 0)
The Pareto Principle -- that in any given market/customer base, 80% of the revenue presence can be sourced to just 20% of the contributors -- remains a marketing fundamental regardless of the endeavor. What some people misunderstood was that they could be just as successful by limiting themselves to that 80% group that contributes only 20% of the revenue base. But it just doesn't work that way. The market defines you, not the other way 'round.  
[ Parent ]
great job on the clarity (0.00 / 0)
Agree on the long tail re: continued growth of niche products.  

Not a Whedon fan. I don't remotely get what the hubbub is about. Certainly not Buffy.  Maybe I should figure out what his best work is and try again.  

[ Parent ]
Yes, Buffy... (4.00 / 1)
Problem is, most folks who are not fans really have no idea what the show was about.  Not saying I've got all the answers, but I do have one significant one in  my diary from September, 2007, "Buffy, The Moral Clarity Slayer".

"Senate passes expanded GI bill despite Bush, McCain opposition"
[ Parent ]
Niches and Inequality (4.00 / 2)
The "correction" here is that Anderson also thought that the rise of niches meant a decline in inequality.

The outcomes here are hardly deterministic, but in the long moral arc I think it's likely that the increasing diversity of niche ecosystems, local markets, etc, probably does mean a decline in inequality simply because it pushes back against the centralization of wealth and power. It also promotes competition and turnover, meaning it's increasingly difficult for the top dogs to stay on top. More empowered players mean the wealth gets spread around.

However, what's often missing from the more utopian reviews of this is that niches don't thrive in a vacuum. Without critical social, economic and cultural infrastructure, there's little purchase for new things to develop, grow, and even prosper. Some people tend to think this is just some kind of magic, that if you drop all barriers a thousand flowers will bloom. Not so much.

Also, the real valuable analogy from the culture side isn't Brittany Spears, it's Elvis. A greater portion of the population saw The King perform Live on Ed Sullivan than have ever watched anything else ever on tv. 60 million. In 1956. When the total US population was about half what it is now.

50 years later, that kind of concentrated cultural power/attention is pretty much unthinkable. Fame still happens, but I think that with the balance of power shifting away from a producer/consumer dynamic and towards one of peer/co-production, the future will see a continued flattening of the power curve.

Me | My Work | Future Majority

[ Parent ]
The long tail is alive and well for... (4.00 / 1)
search engine optimization (1000's of search terms that leads one to find a site), Netflix, Google searches (% of never before seen searches every month), micro-brew beers, etc.

The argument that "It's hard to make money in the Tail" scares me. It may be hard to enter multi-billion multi-national status in the tail, but is that the goal we should be striving for?

And yes: Whedon is amazing & Dr. Horrible is amazing.

more pearls of wisdom from Tom Slee (4.00 / 1)
So really, blogging just isn't my thing. The arguments go nowehere, no one changes their mind, and the signal/noise ratio is very low. The blogging world is a world built for quick-typing extroverts who don't go in too much for second thoughts.

http://whimsley.typepad.com/wh...

Okay then.

Slee ignores 2/3 of the argument that Long Tail author Chris Anderson makes, and half of what Google CEO Eric Schmidt says. Then Slee declares the Long Tail dead without any explanation .. I guess Slee was talking about himself when he said no one changes their mind.

"Long tail" was really never about equaling things out (4.00 / 1)
Despite how the concept may have been touted, the Long Tail was never really about leveling the playing field for smaller "non-hit" offerings. It's true that the internet vastly lowers the costs of accessing the market, but the market is still being defined by the big guys. It's not like you're going to reach someone who Amazon can't. At its core, the Long Tail is a concept that always implied large economies of scale which lowers marketing, inventory, and other costs to the point that lower-margin offers to the market can be profitable. But any model built on large economies of scale is bound to exaggerate inequalities, not reduce them.  
Right, But Also (4.00 / 1)
Properly understood, it helps explain why government can do things that business can't.  Government can get those economies of scale, too, you know.  And it can operate beyond the short-term logic of market constraints.  This is a minor point with respect to undersanding government, I think.  But a more important point in terms of recognizing how this strain of ideas does and doesn't develop.

"Senate passes expanded GI bill despite Bush, McCain opposition"
[ Parent ]
Yes, different logic (4.00 / 1)
Just to add to what you've already adroitly pointed out, leveraging large economies of scale doesn't have to imply that expanding profit is the only acceptable result. Except on Wall Street, of course. Large economies of scale can be a means to other ends as well.
[ Parent ]
Liber Utop's will grab anything they can (4.00 / 1)
they'll grab onto anything that helps them explain why government is coercive or ineffective.  But their analysis is pretty much always shallow.  Go try telling them that, though.  
[ Parent ]
(Say What You WIll) It Never Hurts To Check Out Wikipedia (4.00 / 1)
"The Long Tail:

The phrase The Long Tail (as a proper noun with capitalized letters) was first coined by Chris Anderson in an October 2004 Wired magazine article[1] to describe the niche strategy of businesses, such as Amazon.com or Netflix, that sell a large number of unique items, each in relatively small quantities.

The concept of a frequency distribution with a long tail - the concept at the root of Anderson's coinage - has been studied by statisticians since at least 1946.[2] The distribution and inventory costs of these businesses allow them to realize significant profit out of selling small volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The group comprising a large number of "non-hit" items is the demographic called the Long Tail.

Given a large enough availability of choice, a large population of customers, and negligible stocking and distribution costs, the selection and buying pattern of the population results in a power law distribution curve, or Pareto distribution. This suggests that a market with a high freedom of choice will create a certain degree of inequality by favoring the upper 20% of the items ("hits" or "head") against the other 80% ("non-hits" or "long tail").[3]

Ken McCarthy addressed this phenomenon from the media producers' point of view in 1994. Explaining that the pre-Internet media industry made its distribution and promotion decisions based on what he called lifeboat economics and not on quality or even potential lifetime demand, he laid out a vision of the impact he expected the Internet and consumer choice would have on the structure of the media industry, foreshadowing many of the ideas that appeared in Chris Anderson's book The Long Tail: Why the Future of Business is Selling Less of More (ISBN 1-4013-0237-8).

The Long Tail concept has found a broad ground for application, research and experimentation. It is a common term in the online business and mass media, but also of importance in micro-finance (see Grameen Bank), user-driven innovation (Eric von Hippel), social network mechanisms (e.g., crowdsourcing, crowdcasting, Peer-to-peer), economic models, and marketing (viral marketing).

Libertarians have this penchant for magical thinking, but the Long Tail never was a cure-all.  Quite the opposite, in fact (third paragraph above, repeated for emphasis, now with extra bolding):

Given a large enough availability of choice, a large population of customers, and negligible stocking and distribution costs, the selection and buying pattern of the population results in a power law distribution curve, or Pareto distribution. This suggests that a market with a high freedom of choice will create a certain degree of inequality by favoring the upper 20% of the items ("hits" or "head") against the other 80% ("non-hits" or "long tail")

Nor is marketing the only aspect to the phenomena, as the Wikipedia entry makes clear.

"Senate passes expanded GI bill despite Bush, McCain opposition"

Right (0.00 / 0)
This suggests that a market with a high freedom of choice will create a certain degree of inequality

And this cuts to the core of the delemma of most economic regulation: to what extent do you prioritize choice over outcomes?

It's a tricky bit of business. I'm of a mind that as long as markets remain truly competitive (which requires really smart regulation) we should be able to guarantee basic outcomes (safety net) while still letting people try whatever they feel like trying to earn money. What kills the whole system is when centralized economic power is able to suppress real competition (currently a huge problem) or when choices are throttled down to the point where innovation becomes a relative impossibility (more an issue w/command economies).


Me | My Work | Future Majority

[ Parent ]
There's Also A Whole Other Branch of This, Though (4.00 / 1)
Government action can spur innovation, opportunity and competetion.

This is the part that conservatives and libertarians never want to acknoweldge, and progressives spend too little time dwelling on.  But, for example, the entire post WWII boom owes a tremendous amount to government action--be it funding for research and industrial development during and after WWII, investment in infrastructure, education, training, and mortgatge guarantees after WII, or a whole slew of state and local policies that were generally in synch with the activist govenment of the New Deal Party System.

As Paulina Boorsook notes in Cyberselfish, the entire cradle of techno-libertarianism would still be fruit orchards if not for the big bad government investing all that money in science and technology.

By the same token, the failure to respond with a comprehensive government spending and incentive programs in response to the energy shocks of the 1970s has cost us untold billions--probably trillions of dollars in lost development since then. Carter started trying to move us in this direction, but Reagan carelessly tossed it out, like a feckless teenagers pawning the family jewels to pay for a spring break trip to Mexico.

"Senate passes expanded GI bill despite Bush, McCain opposition"

[ Parent ]
Agreed (0.00 / 0)
As Paulina Boorsook notes in Cyberselfish, the entire cradle of techno-libertarianism would still be fruit orchards if not for the big bad government investing all that money in science and technology.

Oh I agree with this completely. I'll just note that the more productive research initiatives and incentives are oriented around either:

A) Improving opportunity in an open-ended context (GI bill, home ownership help, freewheeling DARPA research, etc)
B) Connected to a discrete goal with huge importance (new deal, WWII mobilization, manhattan project, apollo, etc)

The common thread I think is that (A) there are ways to improve outcomes and overall freedom of choice, and that these are where the action is really at, and also that (B) there are times and places where the Public can collectively take on projects of enormous scale and difficulty, and achieve great things.

There's a good synergetic relationship between these two flavors of program as well. Both are (relatively) lightweight in terms of bureaucracy because in the first instance the civil service system is in a support role, and in the second case the need to succeed permits the scrapping of old/inefficient ways of doing things.  

Me | My Work | Future Majority

[ Parent ]
Huh? (4.00 / 2)
The Long Tail was a simple observation that when there are essentially no limitations , niche products can thrive and in aggregate be a bigger market than the "big hits". Mostly this relates to media, but there's some limited application in physical products as well; the rise of micro-breweries is often cites as an example.

The business consequences are a shift in power from content producers and publishers (movie studios, record labels, book publishers) to content filters and aggregators (companies like Google, Netflix, Amazon and iTunes).

Labels and studios used to act as gatekeepers for talent and culture alike, now that's no longer the case - an independent artist can self publish and consumers can find him through Google. The lower barrier of entry on both ends gives rise to ever smaller niches.

Idealistically it means a democratization of media, culture, and information - consumers get more access to far deeper catalogs, and people who previously never would have found a record contract or column inches in a newspaper or room on the shelf at Barnes and Noble have a chance to reach customers. And on a certain level, that's what happened - blogs are the quintessential example.

Pragmatically though, the Long Tail never offered a way for producers on the tail to reach a large audience or make more than pennies from their work (though there's a slim chance it might rise to become a hit). But a blog that only gets a 100 pageviews daily might make the author a penny a day in ads. To Google, however, sharing revenue with ads on a million such blogs, that's big money. And it makes Google less dependent on premium content providers. Same for Netflix with indy movies, or Amazon with niche products.

Producers get screwed, aggregators make gobs of cash, and consumers are happier because they get stuff more suited to their individual tastes.

And... that's it. It's not nearly as revolutionary as some people believe or claim. Where you got this stuff about anti-trust claims or eliminating the need for unions from that is beyond me.

The long tail was this concept (0.00 / 0)
You can stuff 1000 games in a game store and you can stuff 100,000 on the internet.

Thus the 1001 game makes more money on the internet than it would in a traditional store.

http://transgendermom.blogspot....

OpenLeft exists on the Long Tail (4.00 / 1)
OpenLeft exists on the Long Tail of political discussion yet it still seems like a worthwhile endeavor.

I am not sure I get this part of your premise:

"part of the set of ideas suggestive that the internet and transparency and its rich-friendly cousins would solve all social ills without the need for unions and government action and other stupid things progressives tend to like"

Transparency does not replace government actions and unions. What is the conflict you are suggesting?

Government and business could become more efficient and competitive by providing unfettered access to as much information as possible. The culture of secrecy and ownership of information for government and business and no privacy or ownership for individuals must be turned on its head.

Right now the government conducts way to much business behind closed doors. Change can only occur when the public has facts. The "wisdom of the crowd" could have greater opportunity to examine the information to reveal the true cost and benefit of government and business activity.

Our motto should be: "Yes we CAN handle the truth."

techno-utopianism via sci-fi: the overpromise of technology (4.00 / 1)
Rather than "long tail" thinking, or any thinking at all, I think the biggest reason that silicon valley has tuned out of the national political scene is techno-utopianism inspired by sci-fi books that almost everyone has read.  These books have also influenced writers, who then write hugely optimistic articles in places like Wired and Slashdot.

Similar to how "The Fountainhead" was a huge influence on Greenspan, books like "Diamond Age" by Neal Stephenson and other books by William Gibson and Bruce Sterling push a "technology will solve all problems" viewpoint, with Asimov inspiring the earlier settlers in the area.  There's a reason it's called "Silly Valley": fiction has been guiding the thinking for decades.

end the occupation of Iraq

Woah, There! (4.00 / 2)
Gibson and Sterling in particular have written mostly in the mode of cautionary tales--albeit more as background--rather than celebratory ones.

The problem is mostly that a lot of readers seem to lack basic reading skills. (Yeah, believe it or not, there really was something worth learning in high school English class, if you hadn't already picked it up on the streets.)

The cyberpunk vision of a neo-fuedal world order is not a happy one by any means, and anyone who can't see this is, quite frankly, incompetent to take part in civic governance.

"Senate passes expanded GI bill despite Bush, McCain opposition"

[ Parent ]
Long Tail Dead? | 24 comments
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