At The Long Tail Churchill Club event this morning Chris Anderson (Wired Editor in Chief and writer for the Economist), who claims ownership of the term, discussed his research and his upcoming book about The Long Tail.
Torso Makes The Tail
His speech reiterated some well-understood findings at Amazon, Netflix, Rhapsody (all of which have been mentioned here before), as well as some esoteric analytical findings in which academia attempt to approximate the outcome of Long Tail markets with formulas. The Q&A session leads us into some of the business impacts of Long Tail markets.
First, he agreed with us. No business should create a Long Tail without a Torso.
Second, new search technology customized to every individual usage (vertical search) is essential.
Meritocracy with democratic production
Lego’s interesting example was the toy company that changed its conservative marketing strategy (Pareto based) into a community marketing strategy, realizing better segmentation and margins can be derived from its very loyal community that continues to grow.
Our stance: Long Tail markets can succeed if:
1) The Torso exists and is successful in drawing the crowd
2) Long Tail demand is fed through Long Tail supply, creating a free-market
3) Arbitration is “owned” by the marketplace (not the company)
4) The marketplace offers sufficient transparency to allow for discovery, not just search
5) The business behind the marketplace makes money on the distribution (not aggregation)
6) The marketplace offers integrity in pricing, use, and abuse prevention
Read on for more information on The Long Tail in this blog series…