What the “long tail” means for the economics of e-commerce Economist.com

Profiting from obscurity

What the “long tail” means for the economics of e-commerce

May 5th 2005
From The Economist print edition

DISRUPTIVE technologies, learning curves, tipping points—every so often a trendy new term enters the business lexicon and becomes a staple of business plans, conference speeches and PowerPoint presentations. The latest example, generating buzz among entrepreneurs, technologists and bloggers, is the idea of the “long tail”. The term is not new, having long been used in statistics to refer to a feature of “power-law” distributions, such as the frequency with which different words are used in English: there are a few common words that are used a great deal, and a long tail of increasingly obscure words that are used less often. But the idea is now in vogue because of its particular relevance to the economics of e-commerce. Its popularity in this context is due to an article* published last year by Chris Anderson, formerly a correspondent for The Economist, who is the editor-in-chief of Wired, a technology magazine. The article struck a chord: Mr Anderson is expanding it into a book, and talk of long tails is becoming a venture-capital cliché. “Business plans now have to have an obligatory long-tail passage,” he says. So when people invoke the long tail, what do they mean?

The short answer is a shift from mass markets to niche markets, as electronic comm