Long Tail Theory Study Notes: Chapter 4 three powers of Long Tail

Our cultural and economic centres are accelerating our transition from a few hot spots in the demand curve to a large number of niche products and markets at the end of the demand curve. In an era without shelf space restrictions and other supply bottlenecks, products and services targeting specific small groups can be equally attractive to mainstream hot spots.

Six themes in the long tail era:

• There are far more niche products than popular products. As production technology is getting cheaper, the proportion of niche products is getting higher and higher.
• The cost of acquiring niche products is dropping significantly. Digital Communication, search technology, and broadband have enabled some markets to supply unprecedented products.
• Consumers must find a niche product that suits their special needs and interests. The filters for Automatic Recommendation and product ranking can push the demand to the backend of the long tail.
• With an unprecedented variety of products and filters used to make choices, the demand curve is flat.
• When niche products are aggregated, a large market that can compete with the popular market will be formed.
• When all of the above conditions are met, the natural shape of the demand curve will be displayed, free from supply bottlenecks, lack of information, and limited shelf space distortion.

Three powerful features of Long Tail:

The first force is the popularization of production tools. The personal computer greatly expands the team of producers. If you assign creativity to enough people, the appearance of excellent products is only a matter of time.

The second force is to reduce the cost of consumption through popular communication tools. PC converts everyone into a producer or publisher, But it turns everyone into a disseminator of the Internet. The Internet reduces the cost of product exposure to more people, effectively increases the liquidity of the long tail market, and the sales curve is too high.

The third force is to connect supply and demand, introduce new products to consumers, and push demand to the right of the curve.

Search costs refer to any things that impede your search for goals, such as time waste, debate, incorrect timing, confusion, and wrong purchase. Action by other consumers is often the most useful indicator. Consumer intelligence of Google and Netflix, good song recommendation of iTunes, and consumer blog all play the role of mentor. When you are looking for a new product, it is easier to find your desired choice at a faster speed.

The mysteries of Long Tail:

Power	Enterprise	Example
1. production popularization	Long Tail tool manufacturer and producer	Digital camera, desktop music, video editing software, blog tools
2. Spread	Long Tail collector	Amazon, ebay, iTunes, Netflix
3. supply-demand connection	Long Tail Filter	Automatic Recommendation by Google, blog, and Rhapsody