Walking through waterstones the other day I saw a copy of The Long Tail, an economics book I have long wanted to read. The long tail is all about the power of power laws and the shifting patterns of supply and demand in society. The book was inspired by an article in Wired magazine, which has been mentioned multiple times on this blog and can be read in full here
So what about power laws? Well, they’re ubiquitous. The sales figures for books? Power law. Number of rentals of DVDs? Power law? Names given to children? Power law. Box office takings? Power law. TV ratings? Power law. Citations per scientist? Power law. Length of encyclopedia entries? Yep. Colours people choose for their kettle? You guessed it. The popularity of blogs? Power law. Youtube video watches? Power. Law.
The central theme of the book is summed up really well by this graph:
Here we see how the popularity of titles is distributed. There are relatively few hit products that sell in an incredibly large volume, whereas there are millions of less popular products. This is a pretty typical power law shape.
“Bricks and Mortar” shops can only stock a few items, given the limitations of shelf space. Retailers naturally choose to sell the most popular items and as such can only carry items from the “head” of the curve, i.e. blockbuster movies and hit singles. However, there are many hundreds of thousands of less popular products that shops cannot afford to stock and together their sales add up to rival those of the traditional hits. Online retailers aren’t so constrained by having to maintain a network of shops and so can afford to offer a much larger range, their catalogues stretch further down the long tail, offering an amount of choice that would have been unimaginable only a couple of decades ago. The extreme case of this phenomenon is something such as iTunes, where the goods are purely digital. The cost of adding a product to the iTunes library is negligible (upload it to a server) and as the popular ‘hits’ and more common ‘misses’ are on an equal economic footing. iTunes can quite happily sell them all. It is interesting to note that every single song on iTunes has now sold at least once showing there is demand, however small, for pretty much anything you can imagine. To further underline this point: 57% of Amazon’s revenue now comes from products far enough down the curve that they are not even sold in brick and mortar shops. This is an absolutely incredible shift in the way we consume things. Chris Anderson describes it as follows:
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.
So what does this mean for us? A massive amount of choice is useless on its own, how do we know what we want to see? There is a lot of crap down amongst the unpopular items of music and literature. This is where the second half of the theory of the long tail comes in: filters. Think Amazon’s “Other people who bought this item…”, think specialized blogs, think Google’s pagerank algorithm think specialised search and recommendation engines, think user reviews. The collective wisdom of the people (along with some clever coding) allows us to navigate the sea of niches, tracking down obscure things that we like in a way that is completely impossible in a brick and mortar shop.
This is already beginning to have an effect on society. As more and more avenues for consumption open up, more and more people get interested in (well… they already were interested, but it’s now possible to pursue) niche pursuits. Be it ambient dub music, the history of lace making or ceramic crocodiles, it is now possible to track down communities, blogs, product recommendations, and out of print books incredibly easily. Monoculture is fragmenting as people begin to follow their own interests. Just look at the numbers for television: In the 1970’s over 70% of American households watched the most populat TV show, ‘I Love Lucy’, on a Sunday night. Today the TV shows with the highest ratings (CSI) attract only 15% of the population. The total amount of TV consumption certainly hasn’t decreased since the 70’s, so the explanation we’re left with is that when offered choice people actually do have different tastes and those steep power laws are suddenly beginning to flatten off…
“TV is not vulgar and prurient and dumb because the people who compose the audience are vulgar and dumb. Television is the way it is simply because people tend to be extremely similar in their vulgar and prurient and dumb interests and wildly different in their refined and aesthetic and noble interests.
–David Foster Wallace
It’s a fantastic book and I would heartily recommend that everybody reads it. The author additionally keeps a long tail blog here, which itself makes for a fantastic read.