Long Tail Economics

Big in the press and among the businessrati these days (as in the last year). Just started reading The Long Tail by Chris Anderson and it's an interesting read so far.

The basic premise is that the aggregate sales of all the niche sales along the tail of the demand curve exceeds those in the head of the curve. And this goes against the traditional practice of focusing on the big hits in the head of the curve (i.e. movie blockbusters, billboard charts leaders).

This new model works particularly well for Internet based companies because the web has essentially created a costless distribution channel - making it very cheap to carry and sell all of the niche inventory. This long tail then becomes economically attractive.

Think Amazon, Real Networks' Rhaspody, Netflix. All those hard-to-find books, tracks, and videos.

Not totally revolutionary but nonetheless useful as one thinks about starting an Internet business and how you plan to serve your customer. Can you take advantage of these long tail economics in your business model?

Here's a link to the original Long Tail article from Wired magazine.