cLong tail

There is a market for anything!

George Anagnostaros

hat is the Long Tail?
‡ Consumers want to buy unique products.
‡ On-line retailers can fullfil this request.
‡ In order to do so, it is needed to maintain long product
catalogs.
‡ The phenomenon of selling nearly any product that is
included in those catalogs is the "Long Tail".

source:http://www.leftclick.com/blog/2008/01/25/chasing-the-long-tail
 Vtructure

‡
hat is Long Tail?
‡
hat was happening in the pre-Internet Age?
Ê Retailers
Ê Consumers
Ê Production cost
‡
hat happens at the Internet Age?
Ê Digitization
Ê Everyone is welcome
‡ Real Cases
Ê Amazon
Ê Video Content
Ê iTunes App Vtore

hat was happening in the pre-Internet Age?
Retailers
‡ Brick and mortar retailers were selling only a small number
of products.
‡ Limitation of variety was due to the fact that:
Ê There was no unlimited physical space in their stores.
Ê Pareto's principle states that the 80% of the effects come
from just the 20% of the causes!

hat was happening in the pre-Internet Age?
Consumers
‡ Consumers could not search in other markets than their
local one, due to the physical distance.
‡ Non hits products were marked as failures and no one was
interested in them.
‡ Even if there was a niche market for those unpopular items,
the cost of distributing such products was extremely high.

hat was happening in the pre-Internet Age?
Production cost

‡ A product should have sold at least 2,000 copies in order to

be affordable.
‡ Those copies should have been sold in the local market.
‡ It was hard or even impossible to distribute it through other
markets
‡ The product should have sold for the long run, so that it
would worth to promote it.

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hat happens at the Internet Age?
Digitization
‡ Digitization of content allowed a new market of pure e-
commerce.
‡ Pure e-commerce is a channel that every transaction and
the actual product is not physical but digital.
‡ Digital world overcomes all the difficulties that exist in the
physical world. e-Vtores have unlimited space to host
unlimited number of digital products.
‡ Consumers perform:
Ê Vearches online
Ê Comparisons between products
Ê Customization of productions
Ê Velection of products
Ê And finally purchases by paying online
 What happens at the Internet Age?
Everyone is welcome

‡ The unlimited space of the online stores can host even the
not best seller products, that can be sold in several niche
markets that exist worldwide.
‡ Every product that is available to consumers will be
potentially purchased by someone.
‡ Even small companies or individuals can create and sell
their products with no need for marketiers, sellers or other
intermediator.
 Real Case: Amazon

‡ Amazon claims to sell more than 5,000,000 books

‡ Any physical store can sell up to 100,000 books
‡ It is certain that not all of those 5 million books are from the
top 100,000 selling books. They are also from the less
famous ones, that brick and mortar book stores would not
sell at all.
‡ The sales of those less famous books is nearly the 25% of
the whole.
 Real Case: Video content

‡ Back to the 80s, when only the public tv channels were

broadcasting, there were very limited options. You could
choose between only three channels.
‡ After the emerge of the private television stations, the
options were increased, but they were still limited.
‡ The real change to this picture was the emerge of the web
tv.
‡ YouTube and other services let anyone have his own
custom channel.

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 Real Case: iTunes App Vtore
‡ Till the mid 90s software was sold either in floppy disks or
CD ROMs.

....but the software is a purely digitized product, it does

not need disks!

‡ Internet was the disruptive innovation that let software to be

sold online, without needing to be packaged in disks or
distributed via physical routes!
Real Case: iTunes App Vtore
 Real Case: iTunes App Vtore

‡ Online trading caused more and more software to be

available for anyone, anywhere.
‡ Even small software houses, or individuals started selling
their own software online.
‡ Apple was aware of this situation and understood very early
that their brand new device, called iPhone, should be
accompanied by complimentary products, called Apps, that
"anyone" would be able to develop!
‡ Nowadays Apple's App Vtore hosts more than 300,000
Applications that have been totally downloaded more than
10 billion times!
hich means that each app has been
downloaded 33 thousand times on average!
Real Case: iTunes App Vtore
Any product can be part of
the Long Tail, why not
yours?

Thank you!