Week 19 - Aggregation, Disaggregation and Long Tail Effects

Why has the ‘long tail’ theory appeared?

The phrase ‘long tail’ came from a wired article written by Chris Anderson. The theory describes the wide selection people have of the niche market on the internet and the potential profits sellers could make. Traditionally, records, books, films and other items have created a popular or mainstream section as stores can only afford to have the most popular items on their shelves in order to make a large enough profit. However, the internet allows people to find less popular items or subjects as there is a profit in those ‘missed’ items. For example Amazon can sell unknown books and iTunes can sell unknown songs.



The emergence of online and shopping, of many different items, via the internet this has caused the long tail theory to appear as people can now have a wider selection online then in stores. However, this causes to question whether the long tail theory is accurate? In the 2007 the long tail theory was put into question as more then 10 million of the13 million available music tracks failed to find a single buyer. The chief economists of the MCPSPRS alliance suggested that the niche market is not the most profitable area and that the online sales still heavily relies on mainstream items.

I personally believe that the long tail theory is accurate in the sense that it shows how wide the selection people have of niche items. However, I think the theory is inaccurate in saying the niche market is a goldmine for internet sellers, as most sale figures are of the mainstream items.