Of course, The Long Tail, might be yet another buzz word that catches the zeitgeist, then quickly gets lost in the ever-changing world of the media, but its principles are defining and will be felt long after the phrase is forgotten.
"The Long Tail" was first coined by the American writer Chris Anderson. Beginning in a series of speeches in early 2004 and culminating with the publication of a Wired Magazine article later that year, Chris described the effects of the long tail on current and future business models.
The basic principle of the Long Tail is that products that are in low demand or have a low sales volume can, if managed correctly, collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters. That is, if the store or distribution channel is large enough.
The internet is the perfect zone for such a distribution channel. Just think of Amazon.com, Netflix and e-Bay. It is a theory summed up by an Amazon employee when he said: "we sold more books today that didn't sell at all yesterday than we sold today of all the books that did sell yesterday." In other words, the total volume of low popularity items exceeds the volume of high popularity items. And the key factor that determines whether you have a Long Tail on your hands is the cost of your storage and distribution. Where back-catalogue storage and distribution costs are low, it becomes economically viable to sell relatively unpopular products.
However, when storage and distribution costs are high only the most popular products can be stored and sold. And in the digital world where you can buy downloadable albums or videos this has profound implications.
If you take film rentals as the example, a traditional Blockbuster store has limited shelf space, say 2,000 titles, which it pays for in the form of monthly rent. So, to maximize its profits Blockbuster the store must stock only the most popular movies to ensure that no shelf space is wasted. Because the DVD Internet distributor, Netflix, stocks movies in centralized warehouses, its overall storage costs are far lower and its distribution costs are the same for a popular or unpopular movie. Netflix is therefore able to build a viable business stocking a far wider range of movies than a traditional movie rental store. Those economics of storage and distribution then enable the Long Tail to kick in: Netflix finds that in aggregate "unpopular" movies are rented more than popular movies.
But the capability now, with better compression technologies, faster broadband access and cheaper storage facilities mean that the proliferation of broadband in the UK takes this a step further. By taking out the need for a physical centralised store with millions of titles, all you need now is a huge data-storage facility. And the whole world is then at your door. In short, you would be able to order up any film ever produced (as long as it was digitised and stored on the central computer) from any PC in the world.
This Digital Long Tail has strong implications for Britain's cultural life. Traditionally, where the cost of storage and distribution is high, only the most popular products are sold. But where the Long Tail kicks in, minority tastes are catered to and individuals are offered greater choice.
TV is one area that is likely to be hugely affected by this. Traditionally, the BBC, ITV, Channels 4 and 5 have limited time slots, so the air-time 'cost' for each time slot is high. Commissioners therefore choose programs that they believe have the broadest, mass appeal.
But Digital Long Tail offers the opportunity for programmes to be available that are not popular to the mass, but to the few. So we might get to a situation where Internet TV is a medium that is not purely limited by an advertiser's patronage or a TV commissioner's pre-conception of what we want to watch. Rather it is limited to whether the company that makes the programme can persuade its fans or advertisers to pay for it. And the world of the web is their possible fan base.
So, as the number of TV programming distributed through the medium of the Internet grows, so will the possibility of people being able to watch programmes about Frida Kahlo or Opera in the 15th century or the Rise of the Locomotive Steam Engine in Northern England. And all of this might spell an end to the cry: "There's nothing on TV tonight".
The Long Tail will not just have a cultural effect; it can also threaten established businesses. If there is a rise of smaller web (or Net TV) sites that focus on niche content, site that covers that content better than larger sites like the BBC for instance, then these sites pose a real threat to the major players.
After all, the competitive threat from these niche "category killer" sites is related not to getting air-time, but more to whether they can survives the costs of establishing and providing content that gathers enough revenue. And en masse these niche sites much erode the big player's dominance. Furthermore, opening up those previously uneconomic niche markets may also increase overall demand. Because as people are better able to explore niches, they are more likely to find things they like, and so consume more of them.
The use of Amazon’s “Customers who bought/listened to/downloaded this item also bought...” is a great example of this. It is an approach that allows users to navigate from hits that they know they like to more obscure titles further down the long tail. You know you like watching programmes about the art of Claude Monet, but did you know there was a programme about Seurat that is out there too? Niche content can be of higher quality than hit content. And, better still, you probably can charge more for high-quality niche content because it is so well-suited to its audience.
This long tail draw can be applied to many forms – music, books, wine - anything really - but when it comes to entertainment it is possible that, in the future, our evening's television choice will be as widespread and as diverse as a trip to Waterstones is for booklovers. And that, for the nation's once dominant TV commissioners, is a worry.