March 17, 2005

ETECH: The Long Tail

Filed under: markets — Wendy @ 2:24 pm

Chris Anderson talked about the “millions of niches” of the long tail. He described a fairly recent shift from hit-heavy production to marketing of the these niche items, fueled by democratized production, cheaper distribution, and user communication. Joe Kraus added, “all long tail businesses are marketplaces.”

Long tail items are the opposite of commodities, unique items of perhaps intense interest to a few. But underlying their success, I think, is the commoditization of some of the basic goods, the platforms that allow buyers and sellers to meet, and users to communicate. Successful marketplaces on Amazon and eBay offer general-purpose interfaces, not shelves tailored toward display of the few bestsellers, but a series of display cases. Users as well as shopkeepers can customize or group these displays (reviews, lists of related items). The users’ niche interests are served best by a neutral marketplace (not quite a commodity, since both Amazon and eBay benefit from network effects of market dominance).

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