The Long Tail

Now this book is quite amazing. I had heard about it some weeks ago, so I made a special point of attempting to find it when I went shopping in the US.

Anderson’s central thesis is this: with the introduction of the internet and new ways of working we now live in a time of abundance and practically infinite choice. And as a result, the rules completely change. No longer are we constrained to think in terms of “hits” or “blockbusters” or “top selling brands”. We can now buy anything we like, and it’s available for us to do so in just a few seconds of clicking or calling someone. And, what’s more, it’s happening all around us today.

What fascinates me most is how it seems to overturn one of the most powerful “laws” of doing business. A long-standing rule of business is the Pareto Principle, commonly known as the 80:20 Rule. Put simply, it means that, to make money, companies should only concentrate on their highest selling products or services. The slow movers and niche items are too expensive to store, and so they should be ruthlessly excised. The result, if you haven’t already seen it around you, is uniformity, blandness, lowest-common denominators and a staggering lack of choice.

These days are coming to an end.

The Long Tail hypothesis says that the action in the future will be in the lower selling categories. People are increasingly seeking out those things that they want to buy – the niche music tracks or clothes, the arty Spanish films, the British comics from the 1980’s. Whatever you are in to, you can find it quickly and buy it for a cheap price, thanks to Ebay, Google, Amazon and a host of smaller sites and blogs. The Long Tail idea says that hits will decline in importance as interest in niches grows and grows and grows.

This is nothing short of a crisis for traditional big media organisations, whose job it has been for a century to sell a consistent message to as many people as possible. Now, with the explosion of new channels of communication, people are turning off their radios and TV sets, reading blogs instead of newspapers, downloading indie music instead of going to the record store, ordering customised T-shirts, footwear and jewelery over the web instead of accepting the limited offerings in the local shop. The message, loud and clear, is “Blandness and Hobson’s choices? No thanks”.

Mega celebrities, big-name TV shows, best-selling newspapers, hit pop bands, blockbuster movies: all are beginning to show significant drops in their market-worth and the trend is getting more pronounced with each year. The world of mass communications is splintering into a million pieces, and no-body seems to be able to put this Humpty Dumpty together again.

Does this mean that the age of the hit is well and truly over? Of course not. Just look at the recent global racism furore on Celebrity Big Brother for instance. However hits will possibly be more random in the future – arising from anywhere, and disappearing back into obscurity once their time in the spotlight has passed. It’s likely that hits will be much harder to achieve, and more limited in their impact. Marketing’s problem will be in getting their message out to a truly fractionalised audience, with no-one consumer quite using the same channels of communication.

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The Tipping Point

Over the past week I was away in Chicago. I had a fairly quiet time there, so during that period I was able to catch up on some reading.

First of all, I finished reading “The Tipping Point” by Malcolm Gladwell. This is a great read – very interesting stuff. His central thesis is that social changes (business trends, fads, crime rates and other memes) tend to behave in a manner somewhat similar to epidemics – often there is little progress followed by a sudden exponential jump – the idea catches fire, as it were.

According to Gladwell, three factors are needed – the right people, the right messages and the right environment. What makes the book exceptionally interesting are the case studies used: everything from crimes on the New York subway to Sesame Street to the sales of footwear. It’s packed full of interesting tales: the bit on the 150 rule was fascinating. Essentially the idea behind this is that no social or business unit should be bigger than 150 people. Go beyond this number and you lose control. The manufacturers of GoreTex are cited as a good example of this. They build a new factory and restructure once the population of any of their units goes beyond the 150 mark. Radical stuff indeed.

If I had any reservations it is with the first area – finding those elusive “right people” who will seed the epidemic, as it were. These right people, known as Connectors, Mavens and Salespeople, are required to guarantee success. While I accept that there are people around with such exceptional skills, I wonder how common they are in practice. There is something super-human about it which doesn’t quite ring true. It all seems a little too simple – too packaged. A well working team would seem to me to work just as well, if not better.

The book Freakonomics challenges his assertion that small changes, on the margin, resulted in a sudden drop in the New York crime rate. It’s a debate that will go on for a while, I imagine.

So, I now know a bit more about “stickiness”,the dynamics of cigarette smoking, Paul Revere’s ride and the influence of peers. It’s an enjoyable read and highly “sticky” in itself, but nevertheless I have a few misgivings.

My next review is coming up soon.