In a WIRED article from 2004, Chris Anderson popularized the phrase The Long Tail, describing it as a business strategy of pursuing many little fish vs. a few big fish, or looking at the long tail of a power law distribution itself as a new market.

Later, Anderson expanded the idea into a book called The Long Tail: Why the Future of Business Is Selling Less of More.

Recently, I revisited the original article, because it’s often referenced in other interesting contexts, and it’s been a very long time since I read it the first time.

In what follows are some highlights from the article, as well as some of my own thoughts and comments.

Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.

That’s how the article begins and we have to remember that it was written in early 2004, so many of the familiar online services we have today like YouTube or Spotify didn’t exist yet. Some of them were already around, like Amazon, iTunes, and eBay, and they provided much of the inspiration to Anderson’s article, as did the “rent-by-mail DVD service” called Netflix.

Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! […] People are going deep into the catalog, down the long, long list of available titles, far past what's available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like.

Unlimited selection is of course not possible in a brick-and-mortar world. Even the largest physical bookstores can only hold a small fraction of all potential titles available. With e-commerce the situation changed, and thanks to low warehousing and distribution costs, companies like Amazon could hold previously unimaginable amounts of titles available online.

The emerging digital entertainment economy is going to be radically different from today's mass market. If the 20th century entertainment industry was about hits, the 21st will be equally about misses.

Again, remembering that this was written in 2004, the prediction was stunningly accurate. Today we’re surrounded by streaming services like Netflix, HBO, Prime Video, and Disney+, just to mention a few, and they keep pushing out staggering amounts of new content each year. In 2020, Netflix alone spent $17 billion on video content.

Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots.

This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance. And the differences are profound.

Indeed, during the 20th century, it was nearly impossible to cater to all possible tastes and needs due to the constraints of the physical world. Thus, suppliers often tried to provide products, services, or entertainment that would please the masses and hence we got the “brain-dead summer blockbusters” and manufactured pop music.

Anderson points out that many of our assumptions about popular taste were actually artifacts of poor supply-and-demand matching – a market response to inefficient distribution.

Chart Rhapsody's monthly statistics and you get a "power law" demand curve that looks much like any record store's, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks […] Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it's just a few people a month, somewhere in the country.

This is the Long Tail.

Rhapsody was a pioneering music streaming subscription service (a bit like Spotify, but earlier), and this is where we get the description of the Long Tail. In other words, given enough choice, a large population of customers, and negligible stocking and distribution costs, the selection pattern of the population results in the demand across products having a power law distribution.

In a power law distribution, there’s the Head, where you have the few “hits”, and then there’s the Tail, where you have all the “misses”. The key question is of course how big the tail can be.

You can find everything out there on the Long Tail. There's the back catalog, older albums still fondly remembered by longtime fans or rediscovered by new ones. […] There are niches by the thousands, genre within genre within genre.

What's really amazing about the Long Tail is the sheer size of it. Combine enough non-hits on the Long Tail and you've got a market bigger than the hits.

This is what’s so interesting about the Long Tail. It can be a really huge market, even bigger than the one consisting of the “hits”. In the early 2000’s, according to Anderson, more than half of Amazon's book sales came from outside its top 130,000 titles, which in turn was the average number of titles Barnes & Noble carried.

It could also mean that a niche, hiding in the tail, could be surprisingly large and interesting for service providers, content creators, and the like. This is where Kevin Kelly’s 1,000 True Fans enters the picture, but I’ll write about that concept in a separate article.

Rule 1: Make everything available

Rule 2: Cut the price in half. Now lower it.

Rule 3: Help me find it

In the end of the article, Anderson describes a roadmap in three steps for how to enter a Long Tail market. It’s written specifically with the entertainment industry in mind and most of the examples come from music and film.

The interesting thing about Rule 1 Make everything available is that Anderson thinks that you really have to cover both ends of the curve, instead of just serving either the head or the tail. It’s particularly hard if you only serve the long tail, because then there’s “no familiar point of entry for consumers, no known quantity from which further exploring could begin”.

Also Rule 3 Help me find it is interesting, and again it’s good to remember that this was written before machine learning really took off, so recommendation engines were mostly based on "customers who bought this also bought X". But it’s clear that if you can serve hundreds of thousands of titles, you need to help your customers navigate and discover, and in particular use recommendations to drive demand down the Long Tail.

That’s of course an area where Netflix, Google, and Amazon really have excelled during the past 10 years. It also means that almost anything, even the most obscure production, is just a few clicks away from a mainstream title.

In conclusion, The Long Tail is still an educational and entertaining read. Not only did Anderson coin a phrase that became widely used, but he also did some good predictions, especially regarding entertainment and streaming services. He was also right in saying that the most successful online businesses will be about aggregating the Long Tail in one way or another.

If you look at the most valuable tech companies of today, it’s indeed true that many of them have benefited immensely from a Long Tail strategy, and it’s worth pointing out that Google still makes most of its money off small advertisers (the long tail of advertising) and the same goes for Facebook.