Thursday, January 20

Wired 12.10: The Long Tail

This article describes the current state of economics involved in the distribution of recorded music and movies, but I think it is a precursor to the current shift of economics generally.

Due to the boom in Internet sales of everything from coffee mugs with custom-chosen Dilbert cartoons to full- and partial-album recorded music, all of the available items in the world are at consumers' fingertips when they sit in front of their personal computers. This means that e're no longer limited to the 20% of "hit" items that actually make it into our local Barnes & Noble, Best Buy, or even the movie theater.

In order to place an item on a shelf in a physical store, there has to be a big enough demand among the shop's nearby residents. However, placing an item up for sale online requires much less, as stated in Chris Anderson's article:

What matters is not where customers are, or even how many of them are seeking a particular title, but only that some number of them exist, anywhere.

The "long tail" of economics that he describes comes from a depiction of the graph of a company or store's sales, shown with the number of sales on the vertical axis and the items, ranked by popularity, on the horizontal axis. A conventional "brick-and-mortar" store only has enough shelf space to carry its best-selling merchandise, so after the first roughly 20% of available items the graph will abruptly drop off.

However, the Internet allows everything to be available, so it is apparent that there will be at least some demand, however small, for nearly all available merchandise. Even if a song is downloaded from the iTunes Music Store only once a month, it is still creating profit while not taking up valuable physical space in order to keep it in stock.

I, personally, have found great use in this principle (without even realizing it) from the comsumer's point of view. For instance, my electric shaver is fairly old and relatively obsolete in terms of availability of replacement parts. Every six months, however, I readily find replacement blades on the Internet and have them shipped to me at home. There is no way I would ever find these blades in a conventional shop, but since Joe's Online Razor Supplies (or whoever it is I keep finding to sell me blades) stocks this item they make a profit, no matter how few people like me still use a Remington R9000.

Also, I recently came across an item I didn't even know I wanted, and would have never found in a store, browsing on (or possibly it was It's a small removable-storage gadget made by Lexar that looks like a USB flash drive but instead carries the 256MB Secure Digital card from my Palm handheld computer. This has been useful to me in various ways, and I love it -- but I checked later, and even Fry's doesn't carry such a useful little device (by the way, it's Lexar part number RW023-001, and I got it from J&R Music & Computer world for less than $25, including shipping).

In any case, read the article. It goes into a lot more depth than I have, and I even see digital delivery taking over in the music publishing industry (in which I work) at one point as well. In addition to taking away the necessity for paper and other physical media to be consumed, digital delivery allows everyone, everywhere, access to everything.

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The Geek Code desperately needs updating, but in any case here's mine (as of 2010-02-28):

Version: 3.12
GIT/MU d+(-) s:+>: a C++> ULXB++++$ L+++ M++ w--() !O !V P+ E---
W+++ N o++ K? PS PE++ Y+ PGP t !5 X- R- tv+@ b++ DI++++ D--- e*++
h--- r+++ y+++ G+

If you really care about knowing what that all means, you either know the code already, or you can get it decoded for you here.