The concept of “The Long Tail” was discussed in class today. The long tail was first created by Chris Anderson describing the strategy regarding many niche items against a few popular items. As professor mentioned in class, the niche market strategy like Netflix’s recommendations is a marketing strategy focusing on the “tail.” In contrast to traditional companies offering only popular items, Netflix can make small amount of from a variety of niche items which can add up to a great number.

However, some researchers and economists are raising questions about the profitability of the niche market in video industry. An article “Will the “Long Tail” Work for Hollywood?” (http://hbswk.hbs.edu/item/5520.html) discusses about the research conducted by Harvard Business School professors, Anita Elberse and Felix Oberholzer-Gee, analyzing the distribution of revenues in the U.S. home video industry from 2000 to 2005. Two professors analyzed revenue data in order to find out whether the long tail concept would work for the video industry.

According to the long tail concept, consumers will buy more on a wide range of movies rather than a few popular videos. Also, online companies with low distribution cost will be able to meet the variety of consumer tastes. However, video sales data could not only be explained by the long tail trend. Elberse said, “there is a shift in sales to the tail—but there is also an increasing number of titles that do not sell at all.” From 2000 to 2005, number of titles that can be described by the tail increased; however, number of titles that consumers did not buy at all was four times as high as in 2000. It is true that tail explains a large amount of sales, but Elberse said, “it’s not clear whether any single producer or distributor can do much to take advantage of that phenomenon.” The long tail concept is popularly applied and researched by various online business and entertainment industries. However, it is important to apply the idea by researching specific industries and consumer demands.