Harvard Business School Associate Professor of Marketing, Anita Elberse (HBS – Bio) takes down Wired Editor-in-Chief, Chris Anderson (finally) on the latest online business fad: The Long Tail concept. This is basically, “make it up in volume” notion.
While it may be true that distribution of certain goods is less expensive in an online setting (sometimes), human behavior is pretty solidly on hits, fads and top sellers. Sure, there will always be a small market for random Oldies and nostalgia but that business simply does not scale and is often referred to as “niche”. Here is Elberse’s work:
- The Shape of Consumption
- A Taste for Obscurity?
- Implications for Strategy
- Advice to Producers
- Advice to Retailers
- Who Will Prosper?
So what is the “The Long Tail” premise? Nothing original, just a “Business 2.0” rip of the Pareto Principle (aka 80-20 rule) developed by Economist Vilfredo Pareto over 100 years ago. When I worked for mass drugstore chain Walgreen’s and got to observe consumer behavior up-close-and-personal, common sense business contradicts the Long-Tail concept.
The longish defense from Chris Anderson in response to Elberse:
- “My point is not to suggest that Elberse is wrong and that I’m right, it’s only to point out that different definitions of what the Long Tail is, from “head” to “tail”, will generate wildly different results.”