The Long Tail is a term that was coined in a 2004 article in Wired and then was turned into a book – specifically, The Long Tail: Why the Future of Business is Selling Less of More, by Chris Anderson.
The basic premise is that because of the Internet and it’s infinitely wide and incredibly low-cost distribution capabilities, the big ”hits” of popular culture (be they movies, music, books, etc.) are no longer the only things that will make money. Now, the “misses” will also be money-makers.
“With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.”
This large volume of small purchases (selling less of more) is what Anderson calls The Long Tail.
The best way to get a grasp on this concept is by reading the original Wired article, so go read that now if you’re interested in this topic. Anderson also has a blog that provides continuing coverage and analysis. The Wikipedia entry is here.
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