Pecha Kucha presentation based on "The Long Tail

1. THE LONG TAIL
Henry Teall, Jo Chapell and James Goley

2. INTRODUCTION
The Long Tail Theory was developed and coined by Chris Anderson
The rise of the internet paved way for the development of
Chris Anderson‟s „Long Tail‟, as the availability of niche products expanded
alongside the growth of e-commerce websites.

3. ‘THE POWER LAW’
„The Power Law‟ is the broader umbrella in which „The
Long Tail‟exists
power law n. Math.
a relationship between two quantities such that the magnitude
of one is proportional to a fixed power of the magnitude of the
other.
- Oxford English Dictionary -

4. EXAMPLE OF THE POWER LAW
There are many countries and cities that
contribute to world wide fashion, however
when it comes to fashion week, only four
cities really count, New
York, Paris, London and Milan.
Hollywood films vs. the rest of the
industry.

5. BOTTLENECK EFFECT

6. THE LONG TAIL
Chris Anderson‟s Long Tail theory describes the online
retail market.
It explains how the desire for high demand products is
rivalled by consumers desires for niche products.
Aretailer may sell a large number of one popular product,
whereas they may sell many more small quantities of a
niche. Collating to a number that rivals the sell of the
mass product.

8. THE GROWTH OF THE LONG TAIL
The long tail came to exist as online retailers had „infinite
self space‟.
It is a lot cheaper for online retailers to store products in
large warehouses than it is for traditional shop keepers to
stock goods in high-street stores.
Hence online retailers can offer a larger range on niche
products.

9. THE 80 – 20 RULE
A general example…
20% of the elite population own 80% of the land,
Whereas 80% of the general population only own 20% of
the land.

10. THE LONG TAIL IN PRACTICE
In the next graph, the vertical axis shows the percentage of
demand for a particular film.
The Horizontal axis show the popularity ranking of the film.
Between 2000 and 2005, over 13,000 titles were added to the
Netflix library.
This graph show that as a result of this
growth, demand for the “middle”
increased.

12. THE LONG TAIL EXAMPLE
A typical Blockbuster stocks around 3,000 titles.
However, Netflix; without spacial limitations, has over 40,000.
If you apply the 80-20 rule, roughly 600 titles account for 80% of
Blockbuster's overall sales.

13. LONG TAIL EXAMPLE…
Blockbuster's 3000 th most popular title may only sell once or twice per
year. But for Blockbuster, there‟s no 3001 or any further titles.
Therefore, the tail is shortened and so only accounts for up to 20%.
If you extend the tail from 3000 to 40,000; no matter how little the further
37,000 titles sell they'd add up a lot more overall sales at the end of the tail.

14. THE LONG TAIL: THE MUSIC
MARKET
Niche products –
insignificant?
Can amounts to the
similar volumes of
goods
Build market share
Amazon and iTunes
have adopted this
strategy

15. GROWTH OF THE LONG TAIL
As the use of e-commerce has risen over the years, the idea of The Long Tail
has become more easily accepted.
By using the internet as a way of selling your products, you are allowing
yourself an „infinite‟ amount of shelf space.
This allows for not only a range of different products but perhaps more
options to personalise your purchases. It also allows for the supply of product
variations.

16. CATERING FOR WIDER
AUDIENCE TASTES
Consumer power – seek out products that are not available
Allows niche markets to exist
Obscure products are now easily available to us
The “misses” become as profitable as the “hits”