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Chris Anderson Explains the Long Tail

We are fortunate to live in these times and to be able to look at our culture from our databases., says Anderson. He goes on to explain his long tail theory with the 80/20. There are infrequent events that have high impact. These are low frequency, high amplitude events like earthquakes.

Another example is of most of the population being concentrated in cities. This 80/20 rule is true in human economies,  human affairs and nature itself.
If plotted on the linear curve  it would show a large concentration on the left. If we plot if log-log we would get a sloping line.

In the box office, the #1 film made a lot of money. then there are many over time that did not fare successfully. The vast majority do not make it to megaplexes as there are not enough screens for them. This means that our belief about Hollywood taste is shaped by the distribution channel. These bottlenecks distort the market and our perception.

In our era, we have Internet distribution channels that do not have much of the bottlenecks like storage area or shelf space. We now have access to the latent market, which we could not reach with traditional distribution.

Rhapsody carries niches from this domain in music. These are tracks that Walmart does not carry. Rhapsody carries far more inventory than Walmart. The same difference is seen between Netflix and Blockbuster and between Amazon on Borders.

The low sellers were not significant in earlier markets and are beginning to count toward sales online. We are moving toward a trend where half the market is sold via the old model and the other half through the new distribution models.

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