20/07/06

The Long Tail

We (Apt Studio) were asked by Random House UK to create an online campaign for the UK release of Chris Anderson’s The Long Tail. (Production still above)

This is very exciting as the concept behind the book is very relevant to publishing, and I blogged about Chris before I even knew we would be involved in this. Clearly it’s a great book for us to get involved in. But even more so, the promo is going to be brilliant.

I finished the book on holiday, and will blog about it in more detail, but wanted to mention a couple of points given the profile the book is currently getting.

My first point is that I think the LT is one of the most misunderstood concepts in the current business / new media landscape. It’s actually a fairly complex idea, and difficult to ‘pitch’, as we found when trying to write the script for a 30 second ad. But importantly, it’s one which is commonly understood to mean something other than what it actually is.

The prevailing interpretation of the LT is that it is going to mean that (for publishers) all the crap you’ve been paying to sit in warehouses will magically sell in vast amounts at full price now that the LT has been identified as an idea. That, suddenly, all of your audiences will be magically ‘aggregated’ and will purchase your entire stock. I’m only just exaggerating.

Similarly, for authors (or musicians, film makers etc) it is as if a panacea has been created to free up your distribution problems and make you a mint.

Neither is true.

My reading of the LT was as an articulation of internet economics for the big boys. The winners in Long Tail economics are the aggregators who can pull in the huge audiences, sell millions of products to them, and have the required volume (and margins) to make this work. And this is a handful of operations – we’re talking Amazon, iTunes, eBay, and as the book states, Netflix, Rhapsody (which I’ve never before heard of or used).

The book also mentions Google as the Long Tail of advertising – which is of course true: Adwords is connecting advertisers to consumers and getting paid to do so. Additionally, I’ve blogged before now about LibraryThing and how that is in some ways a potentially marvellous articulation of Long Tail economics mixed with word of mouth, although clearly LibraryThing is not yet operating on those levels as a business, depending on subscriptions rather than cuts on individual sales. But now that Abe has taken a stake, who knows? Second hand book sales, and aggregated ones at that, are classic Long Tail markets, and the book highlights Alibris.

So, to be a successful LT retailer / aggregator you need to have huge market share (Amazon and iTunes both win there), low ongoing costs – ideally with digitised stock and distribution, or outsourcing the distribution to the producer (as eBay and Amazon marketplace do) and great profile among customers.

Therefore, setting up a ‘Long Tail’ business will be increasingly difficult as the ‘niche’ market will fragment, and customer acquisition will become more expensive – no doubt driving competition among ‘niche’ retailers, lowering prices and threatening the validity of the model itself. Anyway, I digress.

Of course, in the current setup, publishers won’t benefit from this significantly. The won’t (contrary to received wisdom – see above) suddenly start shifting stock from their websites in large volumes, although if they had well-structured, well-indexed and high-ranking web sites with extracts and good incentives to buy, they’d be doing a lot better. (More on this anon)

So how do publishers leverage the Long Tail? Can they? Ironically, I think the answer lies with Google, an idea that I have mooted before, and which comes into sharper focus in LT economics.

It is of course Google Print / Book Search. When Google has indexed all of the books, and has the ability to sell off the page, then it should provide the aggregation tools for the biggest and longest tail ever. Based on my above criteria, it has massive market share for search – and when books are fully integrated, even more so. It has very low costs beyond the indexing, which it is gobbling up, and the transactions will be outsourced to the publisher, Amazon, or possible their own system. But to be sure, particularly in non-fiction, the ability to do a google search on an obscure topic, and to find a book or set of books related to that search, has to be a pure articulation of the long tail in action?

More on the promo very, very soon…

Update: The promo will be released very shortly – watch this space.

Another Update: Obviously Google stuffed up with the whole publisher relationship thing. Had they not come swinging into town riding roughshod over things like copyright and the fact that publishers are a little protective about such things, terrified of piracy, and shall we say, sometimes not the earliest of adopters, then this would have been a great idea. It still is a great idea, but it’s going to be an uphill battle for a long time. I think it was Jane Friedmann who recently said that she didn’t expect the google issue to be resolved in the courts in her lifetime….

Posted by Peter Collingridge in Design, Future of the book, Librarything, Publishing.

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