Anita Elberse Did the Research
Anita Elberse studied sales in the media and entertainment industries to test the Blockbuster strategy — putting most resources behind a small number of products — against the Long Tail strategy — selling fewer units of a far-wider range of items (a lists too long for brick-and-mortar channels to inventory.)
To find out, I investigated sales patterns in the music and home-video industriesÃ¢â¬âtwo markets that Anderson and others frequently hold up as examples of the long-tail theory in action. Specifically, I reviewed sales data obtained from Nielsen VideoScan and Nielsen SoundScan, which monitor weekly purchases of videos and music through online and off-line retailers; from Quickflix, an Australian DVD-by-mail rental service; and from Rhapsody, an online music service that allows subscribers to choose from a large database of songs for a fixed monthly fee (and which Anderson cites often in The Long Tail).
Elberse’s findings were no surprise that the 10% across the markets did close to 80% of sales and represented more units than most stores could inventory. They also showed the long tail that Chris Anderson wrote about in his blockbuster book of that name. The results there showed that as sales move online, niche titles that sold a few units almost doubled for any given week during 2000-2005. However, Elberse also found that the number of niche titles that didn’t sell at all or quadrupled.
Thus the tail represents a rapidly increasing number of titles that sell very rarely or never. Rather than bulking up, the tail is becoming much longer and flatter.
Elberse’s advice to product developers was
- Stick to blockbuster strategies of resource allocation.
- If you serve the long tail, keep costs low and know that success is unlikely.
- To gain visibility and reach, focus on your most popular offerings.
- Leverage a strong product mix across your online presence.
She offered similar advice to retailers.
Chris Anderson’s Response
In a response to Anita’s article, Chris Anderson responds and mentions that he collaborated with Anita Elberse on some of his research. He explains how and why he reaches a different conclusion reading her most current data.
Let me start by saying that the paper looks rock solid and I’m sure her analysis is accurate. But there is a subtle difference in the way we define the Long Tail, especially in the definitions of “head” and “tail”, that leads to very different results.
My point is not to suggest that Elberse is wrong and that I’m right, it’s only to point out that different definitions of what the Long Tail is, from “head” to “tail”, will generate wildly different results.
A question of semantics?
One thing is certain, Chris Anderson book The Long Tail was auctioned and supported in the traditional blockbuster strategy.
Which strategy will own Internet commerce in 2050?