The Long Tail: How Endless Choice is Creating Unlimited Demand
Chris Anderson
http://www.ted.com/index.php/talks/view/id/72

Chris Anderson is Editor of Wired Magazine and used to write for the Technology section of The Economist. Why do you think Netflix, Amazon, iTunes and eBay are experiencing such dramatic success? - basically because of the economics of niche markets.

Let’s begin with some facts:
Says Anderson: Half of the top 10,000 books in a typical book superstore don’t sell once in three months, and half of the top 10,000 CDs at Wal-Mart don’t sell once in three months. In a situation where space is not a problem due to online retail, we are beginning to observe three things:

a) the tail of available variety is far longer than we realize
b) it’s now within reach economically; and
c) all those niches, when aggregated, can make up a significant market.

Technology is indeed turning mass markets into millions of niches. In the past, bookstores, radio stations and cinemas dictate what became hits and generated sales for those that have hit the charts. Space was a premium and so we reduced demand and the availability of products to the lowest common denominator.

In a world of abundance, an online music retailer such as Rhapsody can offer more than 1.5 million tracks for downloading. Virtually, every single one of those tracks will sell. Not only is every one of Rhapsody’s top 60,000 tracks streamed at least once a month, but the same is true for its top 100,000, top 200,000 and top 400, 000 – even its top 600,000, top 900,000 and beyond. As fast as the company is able to add tracks to its library, those songs find an audience, even if it’s just a handful of people every month, somewhere in the world. This is the Long Tail.