Long Tail Economics - Chapter 8

For Rhapsody (digital music store), the tail is the area where the track rank is beyond 25,000 where users are still downloading tracks at the rate of 250 times / month (or approx $250 in gross revenues per month). This may not seem much, but by aggregating the tracks beyond 25,000, this translates to 25% of Rhapsody's total volume. (pg 20)

Offline, in bricks-and-mortars retailers (Tower Records), the top 1,000 albums make up nearly 80% of the total market. By contrast, that same top 1,000 Online, accounts for less than 1/3 of the market. pg 137

Amazon's sales of books beyond the top 100,000 translates to 25% of sales.

Experience of eTailers (Amazon, Netflix, Rhapsody) is that the more choices you offer, the more demand increases. In fact, "fastest-growing part of their business is sales of products that aren't available in traditional physical retail stores at all". (pg 24)

The recent phenomenon that enabled the long tail is Internet Economics, which has driven distribution and packaging costs, almost down to zero. That is, the cost of packaging a music track and delivering it to consumers -- is almost zero. Due to limited shelf-space, thousands of products such as garage-band music, had no way for them to reach consumers. With iTunes, and the future - mobiuslive.net, these consumers now have easy access to market.

"Long Tail products may not account for most of the sales, but because they're often cheaper to acquire, they can be very profitable, as long as inventory costs are kept close to zero. pg 134

"Offline,in bricks-and-mortar retailers, the top 1,000 albums make-up nearly 80% of the total market...By contrast, that same 1,000 online accounts for less than a third of the market. Seen another way, a full half of the online market is made up of albums beyond the top 5,000.



Other references:
www.thelongtail.com