The term “The Long Tail” mentioned in class yesterday was first coined in the October 2004 Wired article found here: http://www.wired.com/wired/archive/12.10/tail.html

This article details the anti-scarcity phenomenon which somewhat counteracts the rich-get-richer scheme. Essentially, the emergence of online stores like Amazon and services such as Netflix allow the less popular choices to come into light. Any store has limited shelf space to carry goods, and any movie theater has a limited number of screens to show films. As such, stores and cinemas selectively choose their selection based upon how popular they expect something to be. The article gives statistics such as a CD being worth carrying if it can sell at least 2 copies in a year and a cinema only airing films with expected audiences of at least 1500 people in the first 2 weeks. As such, lesser known albums and films cease to be available, so “the rich get richer” since the “poor” are not even available. (That is not to say the rich do not get richer in places like Amazon, as their recommendation system certainly attributes to this, but The Long Tail gives the “poor” a greater chance.)

Once the internet comes into play, the picture changes. There is no longer problems with shelf space, especially for things like music downloads that require no physical space at all. Sales follow a power law, just like with physical stores, but in the case of the physical ones, the tails are completely severed due to a limit of shelf space and a lack of interest in goods that are not expected to be popular. Things like Amazon and Netflix have a long tail, and the article mentions the Rhapsody music service (at least when this was written a few years ago) streamed the top 400000 of its 700000+ tracks each month, while stores like Walmart wouldn’t carry nearly that much music. By making as many products available as possible, pretty much every good will have some sale, and the sum of this “unpopular” tail may well exceed the few highly popular ones. Selling a “miss” can earn as much as selling a “hit” so making them available allows for increased sales. The ability to find goods online that a physical store deems not worth carrying is one of the best advantages of online stores.

Today an article came out detailing a new restaurant attempting to go against the long tail phenomenon’s belief in avoiding scarcity (the article is here: http://blog.inc.com/the-browser/2008/04/taking_forced_scarcity_to_the.html). Rather than avoiding scarcity, the owner feels his restaurant will thrive from it by making the restaurant more exclusive. Anyone who wishes to eat there is forced to create an online account and make a reservation online about a week in advance, which is apparently quite difficult to do. The aim is to make would-be diners competitive about trying to get reservations, thus driving up demand for a seat in the restaurant. At the moment, the restaurant is packed every night (which perhaps sounds more impressive than it is given there are just 12 seats). Only time will tell as to whether this strategy is profitable. This system could serve to drive up the popularity, much like the authors who bought thousands of copies of their own book manipulated its ability to sell by making it seem more popular than it is; introducing this system may make the customers’ desire to try to get in increase. I personally think the Long Tail strategy of increasing sales by offering as many goods as possible seems like the better way to go with things like music and movie sales online, but obviously a sit-down restaurant does not have such an online equivalent. It’ll be interesting to see if this strategy pays off in the long run or whether it is just a quick fad.