Analysis of "The Long Tail" article

Résumé du document

The world of scarcity makes people want more than what they possess or need in actual terms. This urge creates hits on demand, and influences all actions from what people would like to hear, to see or to read. The world of abundance changes everything because constraints acting upon the world of scarcity are broken and there is no more limitation.

Extraits

[...] But where the Long Tail works, minority tastes are catered to, and individuals are offered greater choice. In situations where popularity is currently determined by the lowest common denominator, a Long Tail model may lead to improvement in a society's level of culture. Television is a good example : TV stations have limited time slots, so the opportunity cost of each time slot is high; stations therefore choose programs that have the broadest appeal. But as the number of TV stations grows or TV programming is distributed through other digital channels, the choice of TV programs grows and the cultural diversity rises. [...]

[...] Analysis of Long Tail” article Microeconomics The Long Tail The world of scarcity makes what people want due to the physics and local audiences constraints we have to deal with. It creates hits on demand, according to what people would like to hear, to see or to read. The world of abundance changes everything because constraints acting upon the world of scarcity are broken: no more limitation is available. What kind of market structure is likely to emerge Markets are classified according to the structure of the industry serving the market. [...]

[...] The impact of this reduction of consumer's search cost affects the consumer's willingness to pay. However, it creates new opportunities for product differentiation and it allows new pricing mechanisms. According to M. Porter2, the Internet is an enabling technology that has allowed companies to affect both their demand and costs at the same time, creating what Kim and Mauborgne3 call “value innovations”. Cultural impacts The Long Tail has possible implications for culture. Where the opportunity cost of inventory storage and distribution is high, only the most popular products are sold. [...]

[...] The long tail market means that with the same amount of demands, it ineluctably reduces the demand for the most popular products. For example, Web content businesses with broad coverage like Yahoo! may be threatened by the rise of smaller Web sites that focus on niches of content, and cover that content better than the larger sites. Summary The monopolistic competition raises from the world of abundance. It offers many positive aspects from a consumer perspective (differentiated products, reduction of consumer search cost . ) and impacts not only the consumer behaviour but also the cultural aspect. [...]

[...] Take movie rentals as an example: A traditional movie rental store has limited shelf space, which it pays for in the form of building overhead; to maximize its profits, it must stock only the most popular movies to ensure that no shelf space is wasted. Those economics of storage and distribution then enable the Long Tail as advantageous. The point raised by C. Anderson that average record store needs to sell at least two copies of a CD per year to make it worth carrying” is no more relevant within that new world. Microeconomics The Long Tail Indeed, the place parameter becomes virtual and therefore imply a huge transformation of the distribution model. [...]