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An author with a 'long tail'

Wired Magazine editor in chief Chris Anderson's "The Long Tail" could be one of the biggest business books since "The Tipping Point."

When Wired Magazine published an article called "The Long Tail," it immediately became a phenomenon on the order of Malcolm Gladwell's "The Tipping Point."

In the October 2004 article, Wired editor in chief Chris Anderson laid out the framework of a simple idea--one that was staring us right in the face. He explained how services like Netflix, Amazon.com, Apple Computer's iTunes and the like were allowing marginal songs, books or movies to get exposure and even to sell small, but respectable, numbers of units.

That's because, he argued, such aggregation services let people express preferences for the kind of music or movies they like, and then used those preferences to suggest additional items of interest. As consumers moved further out from the big hits, they entered the so-called "long tail," where even the 50,000th seller on Netflix could still make a little money.

Even better, from the perspective of consumers, such services meant that there was much greater choice available online than could ever be found in brick-and-mortar stores. Although that concept in and of itself wasn't surprising, entertainment-industry watchers had been conditioned to think that only hits sell. So the idea that even the bottom dwellers sell was a revelation.

After the success of his article, Anderson set out to expand it into a full-length book.

CNET News.com caught up with Anderson last week by telephone after perhaps one of the crazier 24 hours someone in his position could have. That's because on the very same day his book launched, Wired Magazine parent Conde Nast bought the online technology publication Wired News, reuniting the two entities for the first time in eight years.

How did you come up with the phrase the "long tail"?
It comes from statistics. I was collecting data for some speeches in 2004, and looking at data from companies in the digital media space. And when you plot it out and rank the products on the horizontal axis and their sales or popularity on the vertical axis you get kind of a ski slope or shape. It's called a power law. And while you have the big hits largely on the left, and the niche on the right, that curve goes on forever. And where bricks and mortar inventories run out, the online inventory keeps going.

And I realized although no single product sold a lot, there were so many of them. So the size of the market was actually starting to rival the hits market. And that distribution is called a heavy-tailed or a fat-tailed or a long-tailed distribution. And the key bit is that it really is an unlimited shelf-space effect and that's the phrase I used. It's the phrase that resonated.

I understand (Netflix founder) Reed Hastings encouraged you to stick with the phrase?
Yeah, I had some PowerPoint presentations and I was calling it "The 98 percent rule," which was that in all these services they would find that no matter how much inventory they had, 98 percent of it is sold at least once a month. And this is very unexpected. Because of the 80/20 rule, we assumed after you get past the first 20 percent or so, there's very little demand. But we're finding that there's demand for everything. And slide 13 or something was the power law that actually looked at the tail itself, and that was called the "long tail." People were really focusing on that and Reed said, "That's your headline."

How surprised were you that your Wired article became this gigantic phenomenon?
Well, you know, I'm an egomaniac. I'm surprised that my other articles weren't. No, the answer is that I knew this was a really big deal. I knew that the observation that we could now look at the right side of the curve rather than just the left was really important, and I knew that it pretty much defined our culture and economics for the next few decades. By the way, I didn't invent this phenomenon.

The phenomenon has been out there ever since Jeff Bezos and Amazon, sometimes even before. But you know, we still hadn't really focused on how big the tail was. So it was clear that the rise of services like iTunes and Netflix and Amazon were proving this was a big effect. The question was whether the term was going to be clear enough and resonant enough to become a "tipping point"-like phrase on its own.

What are the ideas that the book goes into that you couldn't with a magazine-length article?
The article focused on the long tail and entertainment: DVDs, books and music. The book focuses on the long tail beyond entertainment. We look at Google as the long tail of advertising and eBay as the long tail of hard goods. Then there are examples that don't have much to do with the Internet at all. We looked at KitchenAid mixers, as they had a long tail of color. It turns out that there are many colors available and people are using the pull-down menu to pick colors no one expected would be popular. It was tangerine last year. I also have a chapter on long-tail economics. I can talk about where more choice is better and when it can be oppressive. What was the most surprising thing you came across in your research?
The most surprising thing was industries that understood the long tail that I hadn't anticipated. When you think of the long tail, it's basically a large number of niches that compete with one-size-fits-all mass-market products. There are so many precursors. You know, fashion has always had boutique and couture. And you can think of that of as a long tail of clothing.

In food, we've seen the rise of organic and artisanal food as the long tail of agriculture in a sense. It used to be difficult to have that in the supermarkets. But what I learned is that even in the supermarkets because of efficiencies and supply chains and stock management technology, there's been more than a doubling in products on the shelf. Even Wal-Mart is now offering organic, which is a day many thought would never come.

How should we feel about the decline of the blockbuster and the rise...on that far side of the tail?
I think we should feel good about it. It's not the end of the blockbuster, which will always be there. But they now have to compete with these grassroots phenomena that are coming from producers and bands that weren't signed to labels and people uploading to YouTube who never would have gone through a traditional television network.

Some of the most surprising and resonant bits of our culture right now are coming from the least expected places: The increasing number of bands that are rising up without a label or deal--the Arctic Monkeys, for example--and the number of artists at the top who are choosing to go forward without a label. You know, Thom Yorke from Radiohead is considering that, as is Beck. This suggests that we're going to have a richer culture not just because we can pull and pick from a wider selection of products, but also because more of us can make products.

So if you are an established business, how can you capitalize on the long tail?
Take used book stores, for instance, which are a classic declining business. Ten years ago, they were marginalized by the rise of the book superstores. And the Internet took it even further. You went into a used bookstore and you didn't know what they had. If you're looking for something, you didn't know where to find it and chances are they didn't have it. It was very hard to see a future there.

And then they all put their inventories online and they integrated them through services like Alibris. Now used books are the fastest-growing part of the book industry and represent about 10 percent of the global industry. And I think that not only is it good for them, but it's good for us because many books that were out of print are now available because buying a used book is now as easy as buying a new book.

How can a brand new company leverage the long tail?
Right now, most of the business opportunities are in the aggregators...They're the ones that can basically offer the whole tail. Amazon is an aggregator, Netflix is an aggregator, iTunes is an aggregator. But in a sense Google is also an aggregator in that it reaches over the entire Internet and filters it and makes sense of it so that people can find what they want.

But you know, it's "early days" yet. I mean, right now iTunes is the major music service, but it's really oriented toward pop. If you're into classical music, you'll find that the way iTunes presents music--which is oriented around albums and bands and tracks--doesn't really do justice to the notion of conductors and composers and soloists and lead violins and that sort of thing. So I think this might be an opportunity for niche aggregators who really do focus on one genre, one kind of content and do it very well.

Who are the most important people in the long tail?
The producers. I mean the long tail is made up of millions and millions of people who are creating content and finding an audience for it. Look at all the bloggers out there. They have essentially extended the tail of media a millionfold because it's so easy to do so and they have something to say.

So I think that the real lesson of "The Long Tail" is that that notion that professionals produce and amateurs consume is really being blurred and we're realizing that amateurs often have as much as to contribute as the professionals do and there are so many more of them. Wikipedia, I think, is perhaps the best example of that.

Should there be a long tail of aggregators, as well as of content?
Yeah. You know, these are early days yet. In things like music, iTunes does have a dominant share?I suspect that there are (going to be) dozens of online music services. As people start to value differentiation and value, the services that offer something other than one-size-fits (will join) a long tail of aggregators.