Death to the 80/20 rule - The Long Tail
takes effect.
I've been reading a bunch of interesting articles lately
talking about the future of business is within niche markets
instead of the mass markets that dominate today. While I think
it will be quite a while before the Walmart's of the world
go away, it is interesting to think about and does offer potential
to online stores.
Here's an interesting tidbit.
To get a sense of our true taste, unfiltered by the economics
of scarcity, look at Rhapsody, a subscription-based streaming
music service (owned by RealNetworks) that currently offers
more than 735,000 tracks.
Chart Rhapsody's monthly statistics and you get a "power
law" demand curve that looks much like any record store's,
with huge appeal for the top tracks, tailing off quickly for
less popular ones. But a really interesting thing happens
once you dig below the top 40,000 tracks, which is about the
amount of the fluid inventory (the albums carried that will
eventually be sold) of the average real-world record store.
Here, the Wal-Marts of the world go to zero - either they
don't carry any more CDs, or the few potential local takers
for such fringy fare never find it or never even enter the
store.
The Rhapsody demand, however, keeps going. Not only is every
one of Rhapsody's top 100,000 tracks streamed at least once
each month, the same is true for its top 200,000, top 300,000,
and top 400,000. As fast as Rhapsody adds tracks to its library,
those songs find an audience, even if it's just a few people
a month, somewhere in the country.
This is the Long Tail.
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