The long tail strategy

The long tail is already a cliche in silicon valley circles, along with other words like Ajax, web services, weblogs, Google, del.icio.us, Flickr, folksonomy, tags, hacks, podcasting, wikis, bottom-up, RSS, citizen journalism, mobile, TiVo, and convergence.

But I just learned about it last week, when it came up in a conversation with my friend Evan Williams. If this is the first time you've heard the term, read on. If the long tail is old news to you, bookmark this link and use it to answer stupid questions from people like me.

About a year ago, Wired Editor Chris Anderson wrote an article called The Long Tail, where he pointed out that only about 20% of media and services are available to the public through traditional distribution channels. This is because for big companies the 20% is the only thing that counts because that's where most of the profits lie.

The remaining 80% is the "long tail" which was previously ignored because there was no way to connect the small niche markets with the products they were willing to buy.

Web companies like Amazon, Google and Rhapsody are already capitalizing on the long tail approach, using a number of mechanisms (people who bought this book also bought...) to connect niche content providers and buyers.

The Economist recently published an article called Profiting from Obscurity that gives a great overview of the subject.

In the words of Chris Anderson, "The companies that will prosper will be those that switch out of lowest-common-denominator mode and figure out how to address niches."