Long Tail: Why the Future of Business Is Selling Less of More

Metadata

• Title: Long Tail: Why the Future of Business Is Selling Less of More
• Author: Chris Anderson
• Book URL: https://amazon.com/dp/B000JMKSE2?tag=malvaonlin-20
• Open in Kindle: kindle://book/?action=open&asin=B000JMKSE2
• Last Updated on: Thursday, October 29, 2015

Highlights & Notes

They are scattered to the winds as markets fragment into countless niches. The one big growth area is the Web, but it is an uncategorizable sea of a million destinations, each defying in its own way the conventional logic of media and marketing.

The great thing about broadcast is that it can bring one show to millions of people with unmatchable efficiency. But it can’t do the opposite—bring a million shows to one person each. Yet that is exactly what the Internet does so well. The economics of the broadcast era required hit shows—big buckets—to catch huge audiences. The economics of the broadband era are reversed. Serving the same stream to millions of people at the same time is hugely expensive and wasteful for a distribution network optimized for point-to-point communications.

The hits now compete with an infinite number of niche markets, of any size. And consumers are increasingly favoring the one with the most choice. The era of one-size-fits-all is ending, and in its place is something new, a market of multitudes.

Increasingly, the mass market is turning into a mass of niches.

That mass of niches has always existed, but as the cost of reaching it falls—consumers finding niche products, and niche products finding consumers—it’s suddenly becoming a cultural and economic force to be reckoned with.

The secrets of twenty-first-century economics lie in the servers of the companies that are all around us, from eBay to Wal-Mart.

“In a world of almost zero packaging cost and instant access to almost all content in this format, consumers exhibit consistent behavior: They look at almost everything.

The three main observations—(1) the tail of available variety is far longer than we realize; (2) it’s now within reach economically; (3) all those niches, when aggregated, can make up a significant market—seemed indisputable, especially backed up with heretofore unseen data.

What people intuitively grasped was that new efficiencies in distribution, manufacturing, and marketing were changing the definition of what was commercially viable across the board. The best way to describe these forces is that they are turning unprofitable customers, products, and markets into profitable ones.

Seen broadly, it’s clear that the story of the Long Tail is really about the economics of abundance—what happens when the bottlenecks that stand between supply and demand in our culture start to disappear and everything becomes available to everyone.

That is, of course, what economics does: It seeks to find neat, easily understood frameworks that describe real-world phenomena.

In the tyranny of geography, an audience spread too thinly is the same as no audience at all.

These infinite-shelf-space businesses have effectively learned a lesson in new math: A very, very big number (the products in the Tail) multiplied by a relatively small number (the sales of each) is still equal to a very, very big number. And, again, that very, very big number is only getting bigger.

Culture has shifted from following the crowd up to the top of the charts to finding your own style and exploring far out beyond the broadcast mainstream, into both relative obscurity and back through time to the classics.

“Young people don’t want to rely on a Godlike figure from above to tell them what’s important,” he said. “They want control over their media, instead of being controlled by it.”

As LA Times critic Patrick Goldstein puts it, “We are now a nation of niches. There are still blockbuster movies, hit TV shows, and top-selling CDs, but fewer events that capture the communal pop culture spirit. The action is elsewhere, with the country watching cable shows or reading blogs that play to a specific audience.”

We are turning from a mass market back into a niche nation, defined now not by our geography but by our interests.

The 800 number was the necessary catalyst for a home-shopping boom.

Just as Google is finding ways to tap the Long Tail of advertising, Microsoft is extending the Tail of video games into small and cheap games that you can download on its Xbox Live network. Open-source software projects such as Linux and Firefox are the Long Tail of programming talent, while offshoring taps the Long Tail of labor. Meanwhile, the Internet has enabled the longest, er, tail of pornography for every possible taste and kink.

The Long Tail starts with a million niches, but it isn’t meaningful until those niches are populated with people who want them.

Bottom line: A Long Tail is just culture unfiltered by economic scarcity.

The first force is democratizing the tools of production. The best example of this is the personal computer, which has put everything from the printing press to the film and music studios in the hands of anyone. The power of the PC means that the ranks of “producers”—individuals who can now do what just a few years ago only professionals could do—have swelled a thousandfold.

The second force is cutting the costs of consumption by democratizing distribution. The fact that anyone can make content is only meaningful if others can enjoy it. The PC made everyone a producer or publisher, but it was the Internet that made everyone a distributor.

The Internet simply makes it cheaper to reach more people, effectively increasing the liquidity of the market in the Tail.

The third force is connecting supply and demand, introducing consumers to these new and newly available goods and driving demand down the Tail. This can take the form of anything from Google’s wisdom-of-crowds search to iTunes’ recommendations, along with word-of-mouth, from blogs to customer reviews. The effect of all this for consumers is to lower the “search costs” of finding niche content.

The democratized tools of production are leading to a huge increase in the numbers of producers. Hyperefficient digital economics are leading to new markets and marketplaces. And finally, the ability to tap the distributed intelligence of millions of consumers to match people with the stuff that suits them best is leading to the rise of all sorts of new recommendation and marketing methods, essentially serving as the new tastemakers.

In “open-source” software, where anyone can contribute to a project, the mantra is “With enough eyes, all bugs are trivial.” Likewise for astronomy: With enough eyes, we’ll see the asteroid with our name on it—and early enough to do something about it.

• collaboration

Indeed, Karl Marx was perhaps the original prophet of the Pro-Am economy. As Demos notes, “In The German Ideology, written between 1845 and 1847, Marx maintained that labor—forced, unspontaneous and waged work—would be superseded by self-activity.”

The consequence of all this is that we’re starting to shift from being passive consumers to active producers. And we’re doing it for the love of it (the word “amateur” derives from the Latin amator, “lover,” from amare, “to love”).

It’s as if the default setting of production has shifted from “Earn the right to do it” to “What’s stopping you?”

The “consumer economy” is a producer-controlled system in which consumers are nothing more than energy sources that metabolize “content” into cash. This is the absolutely corrupted result of the absolute power held by producers over consumers since producers won the Industrial Revolution. Apple is giving consumers tools that make them producers. This practice radically transforms both the marketplace and the economy that thrives on it.

A generation is growing up watching people just like them produce impressive works of creativity. This can’t help but make an impression.

It is when the tools of production are transparent that we are inspired to create. When people understand how great work is made, they’re more likely to want to do it themselves.

Don’t be surprised if some of the most creative and influential work in the next few decades comes from this Pro-Am class of inspired hobbyists, not from the traditional sources in the commercial world. The effect of this shift means that the Long Tail will be populated at a pace never before seen.

But now we’re depending more and more on systems where nobody’s in charge; the intelligence is simply “emergent,” which is to say that it appears to arise spontaneously from the number-crunching. These probabilistic systems aren’t perfect, but they are statistically optimized to excel over time and large numbers.

Probability-based systems are, to use writer Kevin Kelly’s term, “out of control.”

The advantage of probabilistic systems is that they benefit from the wisdom of the crowd and as a result can scale nicely both in breadth and depth. But because they do this by sacrificing absolute certainty on the microscale, you need to take any single result with a grain of salt. Wikipedia should be the first source of information, not the last. It should be a site for information exploration, not the definitive source of facts.

With probabilistic systems, though, there is only a statistical level of quality, which is to say: Some things will be great, some things will be mediocre, and some things will be absolutely crappy.

This is the world of “peer production,” the extraordinary Internet-enabled phenomenon of mass volunteerism and amateurism. We are at the dawn of an age where most producers in any domain are unpaid, and the main difference between them and their professional counterparts is simply the (shrinking) gap in the resources available to them to extend the ambition of their work. When the tools of production are available to everyone, everyone becomes a producer.

Up at the head, where products benefit from the powerful, but expensive, channels of mass-market distribution, business considerations rule. It’s the domain of professionals, and as much as they might love what they do, it’s a job, too. The costs of production and distribution are too high to let economics take a backseat to creativity. Money drives the process. Down in the tail, where distribution and production costs are low (thanks to the democratizing power of digital technologies), business considerations are often secondary. Instead, people create for a variety of other reasons—expression, fun, experimentation, and so on. The reason one might call it an economy at all is that there is a coin of the realm that can be every bit as motivating as money: reputation. Measured by the amount of attention a product attracts, reputation can be converted into other things of value: jobs, tenure, audiences, and lucrative offers of all sorts.

The big sin in exposure culture is not copying, but instead, failure to properly attribute authorship. And at the center of this exposure culture is the almighty search engine. If your site is easy to find on Google, you don’t sue—you celebrate.

Each of these perspectives changes how the creators feel about copyright. At the top of the curve, the studios, major labels, and publishers defend their copyright fiercely. In the middle, the domain of independent labels and academic presses, it’s a gray area. Farther down the tail, more firmly in the noncommercial zone, an increasing number of content creators are choosing explicitly to give up some of their copyright protections. Since 2002, a nonprofit organization called Creative Commons has been issuing licenses of the same name to allow for a flexible use of certain copyrighted works for the sake of the greater value (for the content creators) of free distribution, remixing, and other peer-to-peer propagation of their ideas, interests, and fame.

The book becomes not the product of value but the advertisement for the product of value—the authors themselves. Many such noncommercial books are best seen as marketing vehicles meant to enhance the academic reputation of their authors, market their consultancy, earn them speaking fees, or just leave their mark on the world. Seen that way, self-publishing is not a way to make money; it’s a way to distribute your message.

The effect of this is being felt throughout the industry, right up to the giant booksellers. In 2005, Barnes & Noble sold 20 percent more unique titles than it had in 2004, something its CEO, Steve Riggio, attributes to three forces: (1) the efficiencies of print-on-demand, which keeps more books in print; (2) the increase in the number of smaller and independent publishers; and (3) self-publishing.

One of the big differences between the head and the tail of producers is that the farther down you are in the tail, the more likely you are to have to keep your day job. And that’s okay. The distinction between “professional” producers and “amateurs” is blurring and may, in fact, ultimately become irrelevant. We make not just what we’re paid to make, but also what we want to make. And both can have value.

From filmmakers to bloggers, producers of all sorts that start in the Tail with few expectations of commercial success can afford to take chances. They’re willing to take more risks, because they have less to lose. There’s no need for permission, a business plan, or even capital. The tools of creativity are now cheap, and talent is more widely distributed than we know. Seen this way, the Long Tail promises to become the crucible of creativity, a place where ideas form and grow before evolving into commercial form.

The Lonely Island tale has come full circle. Misfits rejected by the entertainment industry go online and get popular. Entertainment industry wakes up to this phenomenon in the hard-to-reach demographic of influential twenty-somethings and hires the misfits. The kids do the same thing on broadcast TV, but since that influential demographic doesn’t actually watch much TV, it isn’t until the skit goes back online (now amplified by the net-kids-make-it-big appeal) that the skit gets really popular. Thus SNL, previously scorned by the online generation, suddenly gets cool again by tapping into the authentic underground spirit blossoming online. Once upon a time, the show used to handpick its talent pool from obscure regional theaters and improv troupes. Now they also find it online.

The truth is that the next generation of talent will probably come from the 18 million people doing their own thing—and these are the people who are most likely to save Hollywood and the rest of the entertainment industry from grinding formula.

Because the tools of production have entirely democratized, the population of producers is expanding exponentially, and now there’s little stopping those with the will and skill to create from doing just that.

a once-monolithic industry structure where professionals produced and amateurs consumed is now a two-way marketplace, where anyone can be in any camp at any time. This is just a hint of the sort of profound change that the democratized tools of production and distribution can foster.

a Long Tail “aggregator”—a company or service that collects a huge variety of goods and makes them available and easy to find, typically in a single place.

That’s the root calculus of the Long Tail: The lower the costs of selling, the more you can sell. As such, aggregators are a manifestation of the second force, democratizing distribution. They all lower the barrier to market entry, allowing more and more things to cross that bar and get out there to find their audience.

business aggregators. They fall mostly into five categories: Physical goods (e.g., Amazon, eBay) Digital goods (e.g., iTunes, iFilm) Advertising/services (e.g., Google, Craigslist) Information (e.g., Google, Wikipedia) Communities/user-created content (e.g., MySpace, Bloglines)

With the pure digital model, each product is simply a database entry, costing effectively nothing. The distribution costs are simply broadband megabytes, bought in bulk at fast-dropping costs incurred only when the product is ordered. What’s more, pure digital retailers can choose between selling goods as stand-alone products (ninety-nine-cent downloads at iTunes) or as a service (unlimited access music subscriptions at Rhapsody).

As eBay can attest, selling your software and servers for a fee is about the highest-margin business around.

What retailers need is an efficient, economically sustainable way to sell a book that sells just one copy per year.

The ultimate cost reduction is eliminating atoms entirely and dealing only in bits. Pure digital aggregators store their inventory on hard drives and deliver it via broadband pipes. The marginal cost of manufacturing, shelving, and distribution is close to zero, and royalties are paid only when the goods are sold. It’s the ultimate on-demand market: Because the goods are digital, they can be cloned and delivered as many times as needed, from zero to billions. A best-seller and a never-seller are just two entries in a database; equal in the eyes of technology and the economics of storage.

All were once delivered on paper or plastic, necessitating all the complexities of physical inventory and delivery. All are now joined by digital versions, with corresponding digital economics. The experience is not always the same, which is why paper books and magazines are still the preferred version for many. But the functional gap is shrinking. And the distribution advantages of the digital versions are irresistible.

We’re entering an era of radical change for marketers. Faith in advertising and the institutions that pay for it is waning, while faith in individuals is on the rise. Peers trust peers. Top-down messaging is losing traction, while bottom-up buzz is gaining power.

LAUNCHcast, along with being a free music service, is a polling machine of remarkable size and fine-grained resolution. It is, in a sense, constantly taking the pulse of the culture, learning how artists fit into it through the clicks of millions of music fans.

For the first time in history, we’re able to measure the consumption patterns, inclinations, and tastes of an entire market of consumers in real time, and just as quickly adjust the market to reflect them. These new tastemakers aren’t a super-elite of people cooler than us; they are us.

Amplified word of mouth is the manifestation of the third force of the Long Tail: tapping consumer sentiment to connect supply to demand. The first force, democratizing production, populates the Tail. The second force, democratizing distribution, makes it all available. But those two are not enough. It is not until this third force, which helps people find what they want in this new superabundance of variety, kicks in that the potential of the Long Tail marketplace is truly unleashed.

People who are part of such a crowd may not think of themselves as offering recommendations or guidance at all. They’re just doing what they do for their own reasons. But every day there is more and more software watching their actions, and drawing conclusions from them. The rise of the search engine as the economic force of Silicon Valley is simply a reflection of the value that we now recognize in the measurement and analysis of the actions of millions of individuals.

The catch-all phrase for recommendations and all the other tools that help you find quality in the Long Tail is filters. These technologies and services sift through a vast array of choices to present you with the ones that are most right for you.

In a world of infinite choice, context—not content—is king.

In today’s Long Tail markets, the main effect of filters is to help people move from the world they know (“hits”) to the world they don’t (“niches”) via a route that is both comfortable and tailored to their tastes. In a sense, good filters have the effect of driving demand down the tail by revealing goods and services that appeal more than the lowest-common-denominator fare that crowds the narrow channels of traditional mass-market distribution.

Nobody cares if bananas outsell soft drinks. What they care about is which soft drink outsells which other soft drink. Lists make sense only in context, comparing like with like within a category.

Filters and recommendations work best at this scale, bringing the mainstream discovery and marketing techniques to micromarkets.

the role of a filter is to elevate the few products that are right for whoever is looking and suppress the many that aren’t.

Inventory is “non-rivalrous” on the Web and the ratio of good to bad is simply a signal-to-noise problem, solvable with information tools. Which is to say it’s not much of a problem at all. You just need better filters. In other words, the noise is still out there, but Google allows you to effectively ignore it. Filters rule!

That’s why the filter technologies are so important. They not only drive demand down the Tail, but they can also increase satisfaction by connecting people with products that are more right for them than the broad-appeal products at the Head.

Rather than predicting taste, post-filters such as Google measure it. Rather than lumping consumers into predetermined demographic and psychographic categories, post-filters such as Netflix’s customer recommendations treat them like individuals who reveal their likes and dislikes through their behavior. Rather than keeping things off the market, post-filters such as MP3 blogs create a market for things that are already available by stimulating demand for them. Jeff Jarvis calls this the difference between “first-person and third-person markets.”

Soon everything will make it to market and the real opportunity will be in sorting it all out.

As far as consumer markets go, powerlaws come about when you have three conditions: Variety (there are many different sorts of things) Inequality (some have more of some quality than others) Network effects such as word of mouth and reputation, which tend to amplify differences in quality In others words, powerlaw distributions occur where things are different, some are better than others, and effects such as reputation can work to promote the good and suppress the bad. This results in what Pareto called the “predictable imbalance” of markets, culture, and society: Success breeds success. Needless to say, these forces describe a good fraction of the world around us.

As far as consumer markets go, powerlaws come about when you have three conditions: Variety (there are many different sorts of things) Inequality (some have more of some quality than others) Network effects such as word of mouth and reputation, which tend to amplify differences in quality In others words, powerlaw distributions occur where things are different, some are better than others, and effects such as reputation can work to promote the good and suppress the bad. This results in what Pareto called the “predictable imbalance” of markets, culture, and society: Success breeds success. Needless to say, these forces describe a good fraction of the world around us.

In other words, give people unlimited choice and make it easy for them to find what they want, and you discover that demand keeps on going into niches that were never even considered before—instructional videos, karaoke, Turkish TV, you name it.

And in India, rediff.com, one of the largest Web portals and ringtone providers, saw what happened as ringtone demand shifted from being driven by Top 20 lists published in newspapers to an online business driven by search. The top 20 ringtones, which had accounted for 80 percent of sales in the newspaper era, fell to just 40 percent when users could search online from a catalog that now has nearly 20,000 songs.

What the Long Tail offers, however, is the encouragement to not be dominated by the Rule. Even if 20 percent of the products account for 80 percent of the revenue, that’s no reason not to carry the other 80 percent of the products. In Long Tail markets, where the carrying costs of inventory are low, the incentive is there to carry everything, regardless of the volume of its sales. Who knows—with good search and recommendations, a bottom 80 percent product could turn into a top 20 percent product.

So the 80/20 Rule changes in three ways in Long Tail markets: You can offer many more products. Because it is so much easier to find these products (thanks to recommendations and other filters), sales are spread more evenly between hits and niches. Because the economics of niches is roughly the same as hits, there are profits to be found at all levels of popularity. While the 80/20 Rule is still alive and well, in a Long Tail market it has lost its bite.

Human attention is more expandable than money. The primary effect of the Long Tail is to shift our taste toward niches, but to the extent we’re more satisfied by what we’re finding, we may well consume more of it. We just won’t necessarily pay a lot more for the privilege.

Need markets are those in which customers know what they’re looking for and just can’t find it anywhere but, say, online.

By comparison, music and other forms of entertainment are typically “want” markets. For the right price, you can be encouraged to try something new, venturing down the Tail with diminished risk of wasting your money.

The lesson from this microstructure analysis is that popularity exists at multiple scales, and ruling a clique doesn’t necessarily make you the homecoming queen.

Broadly, the Long Tail is about abundance. Abundant shelf space, abundant distribution, abundant choice. How awkward, then, that one of the definitions of economics given by Wikipedia is:   eco-nom-ics: n The social science of choice under scarcity.

Successful Long Tail aggregators need to have both hits and niches. They need to span the full range of variety, from the broadest appeal to the narrowest, to be able to make the connections that can illuminate a path down the Long Tail that makes sense for everyone.

These population spikes—the great cities of the world—exist because the cultural and economic advantages of being around lots of other people more than compensate for the costs of urban living. One of those advantages, ironically enough, is massive variety in every possible niche.

Scarcity, bottlenecks, the distortion of distribution, and the tyranny of shelf space all wrapped up in one big store. Again, it’s ironic, this paradox of plenty: Walk into a Wal-Mart and you’re overwhelmed by the abundance and choice. Yet look closer and the utter thinness of this cornucopia is revealed. Wal-Mart’s shelves are a display case a mile wide and twenty-four inches deep. At first glance that may look like everything, but in a world that’s actually a mile wide and a mile deep, a veneer of variety just isn’t enough.

In a sense, an online retailer is to a bricks-and-mortar store what Google is to a library. Because of the constraints of physical shelves, the real-world outlets are forced to create taxonomies and assign everything to them.

In a nutshell, that is the business case for online retailers. Because they can reach all of those many low-density towns as efficiently as the high-density ones, they can tap the Long Tail of distributed demand. That’s exactly what the Sears, Roebuck catalog did a century ago: tap the distributed demand for variety in the American heartland. Today, we just do it faster, cheaper, and with even greater variety.

These are some of the other mental traps we fall into because of scarcity thinking: Everyone wants to be a star Everyone’s in it for the money If it isn’t a hit, it’s a miss The only success is mass success “Direct to video” = bad “Self-published” = bad “Independent” = “they couldn’t get a deal” Amateur = amateurish Low-selling = low-quality If it were good, it would be popular And finally, there’s the notion that “too much choice” is overwhelming, a belief so common and ill-founded that it deserves its own chapter.

Why has there been such an explosion of variety? Part of the answer is globalization and the hyperefficient supply chains it brings. Merchants in one country can now pull from a truly global range of products.

The paradox of choice turned out to be more about the poverty of help in making that choice than a rejection of plenty. Order it wrong and choice is oppressive; order it right and it’s liberating.

CULTURE The Long Tail is nothing more than infinite choice. Abundant, cheap distribution means abundant, cheap, and unlimited variety—and that means the audience tends to distribute as widely as the choice.

Today, our culture is increasingly a mix of head and tail, hits and niches, institutions and individuals, professionals and amateurs. Mass culture will not fall, it will simply get less mass. And niche culture will get less obscure.

The same Long Tail forces and technologies that are leading to an explosion of variety and abundant choice in the content we consume are also tending to lead us into tribal eddies. When mass culture breaks apart, it doesn’t re-form into a different mass. Instead, it turns into millions of microcultures, which coexist and interact in a baffling array of ways.

The decline of newspapers, which are down more than a third in circulation from their mid-eighties peak, is the most concrete evidence of the disruptive effect the Long Tail can have on entrenched industries.

By giving us the illusion of perfect control, these technologies risk making us incapable of ever being surprised. They encourage not the cultivation of taste, but the numbing repetition of fetish. In thrall to our own little technologically constructed worlds, we are, ironically, finding it increasingly difficult to appreciate genuine individuality.

hyperlinks. Since nothing on the Web is authoritative, it’s up to you to consult enough sources so that you can make up your own mind. This is the end of spoon-fed orthodoxy and infallible institutions, and the rise of messy mosaics of information that require—and reward—investigation.

• Bingo!

Fundamentally, a society that asks questions and has the power to answer them is a healthier society than one that simply accepts what it’s told from a narrow range of experts and institutions. If professional affiliation is no longer a proxy for authority, we need to develop our own gauges of quality. This encourages us to think for ourselves. Wikipedia is a starting point for exploring a topic, not the last word.

Today both the channel-centric reality and the ephemeral nature of TV are artifacts of the distribution bottleneck of cable broadcast. TV is still in the era of limited shelf space, while the lesson of the Long Tail is that more is almost always better.

Every time a new technology enables more choice, whether it’s the VCR or the Internet, consumers clamor for it. Choice is simply what we want and, apparently, what we’ve always wanted.

You might not think that there’s a Long Tail of kitchen mixers, but there is, and it’s all about color. KitchenAid is known for the quality of its high-end kitchen appliances, but even more so for the range of colors they come in. Indeed, KitchenAid is considered one of the world’s trend-setters in color variety.

At least 90 percent of LEGO’s products are not available in traditional retail outlets. They’re only available in the catalogs and online, where the economics of inventory and distribution are far friendlier to niche products. Overall, those non-retail parts of the business represent 10 to 15 percent of LEGO’s annual $1.1billioninsales.ButthemarginsontheseproductsarehigherthanonthekitssoldthroughToys“R”Us,thankstonothavingtosharetherevenueswiththeretailer.AndbecausethevirtualstorecancarryproductsforallLEGOfans,fromkidstoadultenthusiasts(notjustthesweetspotofnine-year-oldboys),therangeofpricescanbefargreateronline,from$1 bricks to the aforementioned $300 Star Wars kit.

In 2005, LEGO launched its most ambitious peer-production effort to date, LEGO Factory. This virtual fab lets you download software to design your own models, then upload them to the LEGO site. A week or so later, you get a kit with all your specified bricks and other parts delivered in a box with an image of your creation on the front. What’s especially cool is that others can buy your kit, too, and there’s a nice selection of user-created models available for purchase. More than 100,000 models have been designed this way, and some of the best of them get released as official LEGO products. LEGO even pays the creators a small royalty.

In late 2005, Salesforce was the first to launch a Long Tail software marketplace on its platform. Third-party developers could write a targeted niche application (focused on performance reviews or recruiting, for example) and it would run on Salesforce’s servers, integrating with Salesforce’s other software. The hope was that hundreds or even thousands of small developers would meet all the specialized needs of Salesforce’s customers, allowing Salesforce to concentrate on the more common needs. In other words, the tail would reinforce the head.

What Google realized is that if it could take most of the cost out of both selling and buying advertising, it could dramatically increase the pool of potential ad buyers and sellers. Software could do almost all the work, thereby lowering the economic barrier to entry and reaching a much larger market.

Because of the self-service model, the measurable performance, the low cost of entry, and the ability to constantly tweak and improve the ads, advertisers are flocking to this new marketplace.

The secret to creating a thriving Long Tail business can be summarized in two imperatives: Make everything available. Help me find it.

More information is better, but only when it’s presented in a way that helps order choice, not confuse it further.

In scarce markets, you’ve got to guess at what will sell. In abundant markets, you can simply throw everything out there and see what happens, letting the market sort it out. The difference between “pre-filtering” and “post-filtering” is predicting versus measuring, and the latter is invariably more accurate. Online markets are nothing if not highly efficient measures of the wisdom of crowds. Because they’re information-rich, it’s relatively easy for people to compare goods, and spread the word about what they like.

Already, one of the most common business models on the Internet, from Skype to Yahoo! Mail, is to attract lots of users with a free service and convince some of them to upgrade to a subscription-based “premium” one that adds higher quality or better features. Because digital services are so cheap to offer, the free customers cost the company so little that it can afford to convert only a tiny fraction of them to paying customers.

But as the Tahoe example demonstrates, all this comes at a price. Users, not marketers, dictate the dialogue online, and never more so than when they’re invited to contribute their own thoughts. The search for engagement and interactivity online invariably leads to loss of control. For custodians of brands, who have spent most of their careers polishing their messages, the idea that the message is no longer theirs to create and own is somewhere between heretical and terrifying.

Instead, the best way to market to Long Tail consumers is to find out who is influencing them and focus your energies there. That starts with doing less messaging and more listening.

When you think about it, the hyperlink is the ultimate act of generosity online. When somebody links to another site, what they’re doing is telling their readers to go elsewhere. They’re saying: “At this point, dear reader, I recommend that if you want more, you leave my site and go to this other site. I believe that site will be worth your time. I believe that you’ll be glad you went. I believe that you’ll be so glad you went that you’ll come back, and when you come back you’ll thank me for having wisely suggested that link.”

It’s basically an economic exchange: Google turns reputation into attention (traffic), and sites turn attention into money.

Not all industries lend themselves to an infinite variety of products, but all industries have an infinite variety of customers. Finally we can treat them like the individuals they are. It’s the sunset of the thirty-second spot.

We often think of the Long Tail as a force of fragmentation, but it can be a force for unification for the already fragmented, too.

Type 1: Authentic top-down hits; products that are excellent and resonate with a broad audience (think anything from Coldplay to the World Cup). These start big and stay big. Type 2: Synthetic top-down hits; lame products that are marketed within an inch of their life, successfully getting lots of people to try them even though they’re probably sorry they did (think Garfield: A Tail of Two Kitties). These start big but quickly plummet. Type 3: Bottom-up hits that rise on word of mouth and grassroots support (think Clap Your Hands Say Yeah or March of the Penguins). These start small and get big.

In a Long Tail world many top-down hits get smaller, but even more bottom-up hits get bigger. It’s not the end of the hit—it’s the rise of a new kind of hit.

(A) if you can dramatically lower the cost of production and distribution, you can offer far more variety; (B) given more variety and the tools to easily organize it for individual taste, people will increasingly revel in their differences rather than settling for their commonalities as in traditional blockbuster culture.