Sunday, July 20, 2008

The Long Tail Debate

Anita Elberse's recent piece Should You Invest in the Long Tail?, Harvard Business Review July-August 2008 has stirred up a debate among long-tail enthusiasts and critics. Prof. Elberse's academic work on the Long tail is great for the Long Tail theory. With such academic challenges of the Long Tail theory, Chris Anderson - who coined the term/theory - gets a good chance to defend the theory giving the new context and data presented by challengers. It is through such challenges that the theory gets refined and the boundaries of the theory's applicability defined.

Prof. Elberse's research validated the Long Tail theory and reveals additional patterns about consumption in the long tail: (1) the long-tail is long but extremely flat and (2) light users have a disproportionately strong preference for the more popular offerings. Her definition of what constitutes the "head" (and hence the tail) of the power curve is certainly a point of contention/difference between the Long tail theory and her analysis. She defines the head as the top 10% of titles in her data set while Chris considers the head as akin to the amount of content that can be shelved at the largest wal-mart store. I believe his definition is a better base-line especially when considering how the internet is lowering distribution cost and the fact that this is probably the theoretical limit of a brick and mortal store.

In her advice to producers and retailers she offers nothing new in the way of strategy implication/formulation which I was looking forward to. Overall it was a good piece and I'm only surprised at the level of criticism especially since she didn't invalidate the Long Tail but rather offered some new data to support it as well as tease out some additional conclusions.

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