The long tail revisited

Posted by on Sep 17, 2008 in Uncategorized | 3 Comments

Kingkong

Nice contrarian piece by John Quelch here.

Rather than looking to exploit newly available niches down the tail, he suggests you focus on blockbusters – the megahit.

While it's an interesting response to the same observed feature of the world that technology is allowing us to see (and serve)  – the long tail distribution – it occurs to me that Quelch's advice is riskier than it seems. Of course, most of us would like to have the blockbuster (or think we would…see below)

So what makes it risky? Long tail distributions exhibit a pattern which suggests that random copying underpins things.

This means popularity – the blockbuster phenomenon itself – is inherently unpredictable and volatile.

And as Duncan Watts has shown, things come and go – rewinding the tape produces a different winner in the same circumstances

So however good your "thing" is, you need to place a lot bets to get your winner (much Hollywood used to do…)

Also – and I'm seeing more and more examples of this – I'm not sure that everyone wants to build the really BIG success: it's hard to handle extraordinary success and takes you away from doing what you really love

3 Comments

  1. Bertil
    September 17, 2008

    Quelch simply forgets to mention that your theory applies when copying is easy — he gives examples that implicitly do not consider piracy; he neglects auteur cinema (too bad, me and me five friends will look down on him for that, but we are self-confessed snobs) and — and this is more concerning — he neglects patient-targeted drugs. With automated analysis, it is now within the forecasting reach of pharmaceuticals to adapt treatment to circumstances: flu is the existing case, but cancer treatment should be developing in that direction, instead of providing the same insulin for everybody, diabetes are addressed in an increasingly varied way, and genetic-tailoring is upon us.
    Spending truckloads of cash to force a tune onto a country’s ears (what Watt has actually proven the music industry has been doing) us a fine, efficient blockbuster system; persuasion by repetition is so XXth century, though — it won’t sustain having a sneaky Last.FM or Pandora suggesting: you *might* prefer that tune, because it’s scientifically better adjusted to your taste, you know. Persuasion by gadgets.
    My real opinion? HBS shepherds big companies into that mindset? That’s entire markets open to us entrepreneurs, then: geat! Plus—what would you expect from Bush’s Alma Mater?

  2. davidcushman
    September 17, 2008

    scale now is about reaching into the long tail, with things that people want to share one to another. Things can be hits, but they are hits on the terms of the networked world, not the broadcast one.

  3. Clive Birnie
    September 23, 2008

    I thought it a good piece when I read the old fangled paper copy of HBR that falls through my letterbox.
    But thought it missed a key point: that the appeal of the Long Tail for many businesses is as a source of incremental business to volume or blockbuster products, not as a replacement.
    We have had a “grow a long tail” project at Severn Delta for about 18 months. This has added 1.6% yr on yr turnover growth but if the trend keeps going it could add as much as 10% to pre tax profits in 2009. Worth the touble I assure you.