Open Left:: Long Tail Dead?

Long Tail Dead? | 24 comments

(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"

by: Paul Rosenberg @ Thu Nov 20, 2008 at 10:39:45 AM CST

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

by: Josh Koenig @ Thu Nov 20, 2008 at 13:55:44 PM CST

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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"

by: Paul Rosenberg @ Thu Nov 20, 2008 at 14:35:59 PM CST

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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

by: Josh Koenig @ Mon Nov 24, 2008 at 19:18:33 PM CST

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