Long Tail

long tail

amazon

A long tail refers to the statistical property where a larger share of the population rests within the tail of a probability distribution than observed under a normal distribution. This has gained popularity in recent times as a retailing concept describing the niche strategy of selling a large number of unique items in relatively small quantities – usually in addition to selling fewer popular items in large quantities. The concept was popularized by Chris Anderson in an October 2004 Wired magazine article, in which he mentioned Amazon.com and Netflix as examples of businesses applying this strategy.

However, a 2008 study by Anita Elberse, professor of business administration at Harvard Business School, calls the Long Tail theory into question, citing sales data which shows that the Web magnifies the importance of blockbuster hits.  Also in 2008, a sales analysis of an unnamed UK digital music service by economist Will Page and high-tech entrepreneur Andrew Bud found that sales exhibited a normal distribution; they reported that 80 percent of the music tracks available sold no copies at all over a one-year period.

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