Jack Schofield

The long tail is named after the type of power law curve you get when you plot the sales of CDs, computer games and other products, or the popularity of Web sites, or the frequency of word use in a language. This is where George Kingsley Zipf, professor of linguistics at Harvard, observed it.

To put it crudely, there are a small number of words that appear very frequently: the, of, to, and, a, in, etc. After that, there is a steep decline, followed by tens of thousands of words that appear relatively rarely: palimpsest, lapidary, rodomontade, epalpebrate and so on. When you graph what is now often called the Zipf distribution, these rare words form the long tail that tapers off to the right.

The Zipf curve turns out to be at least as common on the Internet as it is elsewhere. You might suppose, for example, that since all Web sites are more or less equally accessible, visitors would be evenly distributed. That is not the case. Research by Lada Adamic and Bernardo Huberman showed that, in fact, “the distribution of visitors per site follows a universal power law, characteristic of winner-take-all markets.” In other words, a small number of sites — Google, Yahoo, MSN, etc. — have tens of millions of visitors each month, while millions of sites attract only a handful each. Counterintuitively, the more choices there are, the more extreme the curve becomes. Life isn’t fair. This knocks most naive ideas of competition on the head.

What interested Anderson, however, was what happens when something moves from the physical world of atoms to the digital world of bits. That’s where the “long tail” effect starts to make a real impact. Anderson points out that in the real world, there are physical limits on how many titles a shop can stock or a cinema can show. These are the economics of shortages. For example, an average American movie theater can only show films that will attract 1,500 people over two weeks, and almost all of those will live within a 10-mile radius. It is hardly surprising that relatively few movies ever get a showing, and cinema distribution has almost no tail at all: You go straight from hero to zero.

It is not that cinemas wouldn’t like to serve these markets, just that they have no economic way of doing so. Sell movies on DVD, however, and the economics are different. A movie that wouldn’t fill a local theater can still sell 1,500 copies across America. And instead of making a couple of hundred movies available, like a cinema, a typical Blockbuster can stock 3,000 titles. Most sales will still go to the big Hollywood hits, but at least we can see the start of a tail.

Sell movies online and the equation changes again. According to Anderson’s figures, for example, Netflix offers 25,000 DVDs. The 24,000 or so titles in the tail may not sell many copies each, but they add up. (Most of Amazon’s sales are of titles the average bookstore just doesn’t have room to stock.)

With the move to digital downloads, however, Anderson argues that the misses can be as important as the hits. “With no shelf space to pay for, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. Suddenly, popularity no longer has a monopoly on profitability,” he wrote in Wired.

Where a retailer might offer, say, 30,000 songs on CD, an online music store can offer a million. The hits will still sell far more than the misses, but since almost every download finds someone willing to give it a try, the long tail could provide the majority of sales. “Now we could look to the right [of the graph], which could be as economically valuable as the left,” says Anderson.

The entertainment industries provide an accessible illustration of the long tail, and Anderson reckons these will take up about half his forthcoming book. However, he also cites Google as a long-tail business, because of its contextual advertising. The first big Internet sites aimed to attract millions of users so they could sell banner ads to major brands. Google’s AdWords, by contrast, are so cheap that almost anyone can buy them, and they can be targeted at a handful of users. Google’s financial success therefore comes from aggregating lots of small advertisements shown to small audiences — a long-tail effect.

EBay is another long-tail business. It is not about auctioning a few old masters for 20 million pounds apiece; it’s about providing a market where huge numbers of people can sell almost anything for a couple of quid.

None of this means Hollywood studios will stop trying to make hit movies and make misses instead. However, Anderson refers to the long tail as “a million billion niches,” and niche products can be profitable, if they can find their audience — or vice versa.

Mass-market advertising is clearly out of the question for niche products, but Internet retailers have already developed ways to make them visible, particularly Amazon. One example is the social software that does “collaborative filtering.” Other people who bought X also bought Y: Your taste may be similar. Getting buyers to write reviews and create their own hit lists and wish lists also helps buyers to find people with similar tastes, and perhaps to try their recommendations.

But the process only works if a Web site offers a full range of products. “Hits still matter,” says Anderson, because they are needed to attract mainstream buyers. After that, recommendations can encourage them to try niche products, driving them down the long tail. Offering only hits, of course, does nothing to expand the market and change consumer behavior.

Another question is: “What does the tail do to the shape of the head?” This is one of Anderson’s research projects. At the moment, on the Pareto principle, the top 20 percent of titles probably bring in 80 percent of the revenues. Will there be a leveling of the graph if more demand moves to the long tail? Anderson thinks so.

Finally, there’s an apparent conflict between the economics of the long tail and the progress made over the past few years by Creative Commons, a copyright reform movement started by Lawrence Lessig, a Stanford University law professor (and Wired columnist). This has been driven by the argument that, for example, out-of-print books are not worth anything, so copyright owners might as well give them to the community for reuse.

The long tail argument, in contrast, suggests that copyright owners should make everything available online, as cheaply as possible, because it will still find buyers, and the aggregate sales could be significant.

Anderson tackles this problem on his Long Tail blog, where he points out that the people who usually find new commercial outlets for the back catalog are the ones who repurpose and/or remix it, not the original copyright holders.

With both Anderson and Lessig speaking at the O’Reilly Emerging Technology 2005 conference in San Diego last week, it would have been interesting to hear them discuss the problem. Alas, it didn’t happen.

However, the issues are closely related. At the moment, the major film studios and record companies are pricing their online, digital products (if any) to defend their retail sales, not to exploit the low cost of doing business over the Net. The obvious and perhaps inevitable result is rampant piracy.

At ETech, Lessig said the big copyright holders were trying to blind the technology to conform to 18th century law, rather than reforming the law. Maybe they’ll read Anderson’s long-tail book, when it comes out, and see the light. If Anderson is right about a change from the old economics of shortages to a new economics of abundance, will they have a choice?

The market power of female electronics buyers doesn’t seem to have made the impact in the U.K. that it has in the U.S., South Korea and Japan. In the U.K., people who are interested in gadgets still probably think about men’s magazines such as T3, Stuff and Boys Toys, rather than the trendier, women-friendly Web sites such as ShinyShiny, Popgadget and GirlsStuff.co.uk. Consumer electronics manufacturers have relatively few products aimed specifically at women, and women may feel patronized if they visit popular electronics shops.

However, Paul Hide from Sony says that in the U.K. last year, 53 percent of the purchasers of electrical and electronics products were men and 47 percent were women, and with products such as DVD players, TV sets and laptop computers, the number of female purchasers was about the same as the male. The market is changing, and the changes could go even further.

If you look at the next generation of American teenagers, ages 13 to 18, girls are already more frequent users of some consumer electronics products than boys. Girls are more likely than boys to use a mobile phone (88 percent to 83 percent), a digital camera (54 percent to 50 percent), a DVD recorder (21 percent to 19 percent) or a satellite radio (24 percent to 18 percent), according to CEA market research into use over the previous 30 days. In most other areas, girls score the same as boys — for using TVs, VCRs, DVDs and PCs — or a little less. Only in video-game consoles (49 percent to 89 percent) and portable MP3 players (18% to 29%) are girls way behind.

Paul Jackson, a principal analyst with Forrester Research, thinks teenagers adopt consumer electronics products, whether they are boys or girls, partly because they have grown up with them. “They don’t necessarily see it as technology anymore; they just accept it, like electricity or television.” However, he reckons that changes in the nature of the technology have contributed to the shift in focus away from just males.

In the early days, new technology was of particular interest to men because it provided access to productivity tools that were familiar from work — word-processing programs and spreadsheets, for example — and appealed to hobbyist instincts. As the industry developed, emphasis shifted to things with much broader appeal, such as music, entertainment and e-mail. More recently, there have been moves toward areas that appeal strongly to women, such as capturing family memories (with digital cameras) and communications, which takes in instant messaging, mobile phones and camera phones.

In other words, women’s interests haven’t necessarily changed, but digital technology has finally caught up with them, in forms that are affordable and reasonably easy to use. Portability and wearability have helped a lot. CEA’s market research says that “in a reflection of their increasingly mobile lifestyle, teens have particularly embraced electronics products and services that enable them to be and stay on the go.” This may change when they get married and settle down, but perhaps not. Women, like teenagers, also have increasingly mobile lifestyles.

Genevieve Bell, an anthropologist and ethnographer who works for Intel in the United States, points out that women may now have a wider range of demands than men because they often have to combine work, running the home and child care — ferrying the kids about. These time-challenged “soccer moms,” who have grabbed the attention of American marketing departments, may need their BlackBerrys and mobile devices more than men do.

Manjit Waters, head of O2′s active/mobile portals business, certainly thinks so. She thinks the BlackBerry is, for businesswomen, “the greatest invention” because it lets her do quality work while still being there for her daughter.

But Bell reckons there are still some gender differences. There are some women who are geeks and lots of men who are not geeks, of course. But “there’s something about playing around with technology that is distinctly male,” says Bell. “Women are more likely to say, ‘I don’t have time for this.’ They need good ease of use, simplicity, reliability, durability. To be adopted, the technology has to take the burden off somewhere else.”

Either way, consumer electronics markets have not split along gender lines like, say, wristwatches, and there is lots of overlap. As ShinyShiny’s Katie Lee says: “It’s not just about women: Things are less geeky and more appealing for everyone. The key is just to make things that are small and look nice, because men like nice, small things as well.”

Should consumer electronics manufacturers design things specifically for women? It is a tricky question. Maureen Craig, vice president and chief strategy officer at Red Tettemer, an advertising agency based in Philadelphia, agrees there is “a gender-agnostic teen market,” but says: “I don’t believe that will hold up when they become adults.” Mobile products suit the teen lifestyle — “if you look at what they can use and what they can afford, mobile fits” — but when they get their first apartment, they will have different needs.

Craig thinks there is a market if consumer electronics companies can come up with gadgets that are “tactile and feminine — look at the products you find in the kitchen,” she says. “That’s not to say you just have to paint it pink: Barbie ain’t the answer!”

Clearly, there’s more of a fashion element to portable electronics because so many of them are wearable, and disposable. Intel’s Bell points out that many girls in Korea and Japan “wear their phones around their necks so they are on display all the time, as a statement of who they are. There are handsets you buy at the jewelry counter!”

This kind of business has driven Asian manufacturers such as Samsung to produce small, cute, clamshell phones that look less like geek gizmos and more like jewelry — and these have also proved popular with European and American women. The ability to change colors by using add-on fascias is also an advantage, since it allows one phone to be matched to different outfits. In Asia, there is also a market for cute, branded gadgets based on characters like Hello Kitty, though this does not seem to have traveled as well.

Jo Twist, science and technology reporter for BBC News Interactive, says she finds the cutesy approach — visible in some displays she saw at the Consumer Electronics Show in Las Vegas earlier this month — somewhat patronizing. Catering for women “is more than just sticking a mirror on a mobile. I tend to steer away from things that are aimed specifically at women, and I couldn’t bring myself to buy a Hello Kitty phone,” she says. “That’s the wrong approach.”

What she wants are functional products that are well designed and easy to use, but aimed at a range of people, “not just the main demographic, middle-aged men.” She also wants them explained in media that women are comfortable reading, rather than in T3 or Stuff. “If you have to find the gadget in the cleavage, that is bound to put women off.”

This is the approach that chimes with the industry. For example, Mike Short, vice president for research and development at O2, the mobile network provider, argues that the appropriate differentiation can be done via content, and via different advertising and marketing channels, rather than by redesigning the product. For example, companies could sell basically the same phone either with access to Disney or Hello Kitty content (which they do in Japan), or with access to Premiership goals. An MP3 player could come preloaded with classical music or rock classics. The same products could also reach different demographic markets by being marketed differently through different types of outlet. The same phone could be sold in bubble wrap in a trendy fashion store such as Gap or by mail order from your pension provider, perhaps differentiated by a spangly red or silver gray fascia.

At Sony, the largest consumer electronics company, Paul Hide says: “We have some products, like portable audio, that come in a range of colors, but they are not specifically aimed at women. We are trying to be gender neutral. But we are moving away from ‘technology buyer’ messages to ‘lifestyle’ advertising. The days of us selling a lot of technology because it was high technology have long gone. On its own, being a technology leader is not enough: There has to be more to it than that.”

Bell says that catering nonspecifically for women “is part of a larger move for companies like Intel. It is not just a matter of paying attention to women but paying attention to older people, to the developing world and a range of other groups.”

In other words, consumer electronics companies are not switching from catering for men to catering for women. There will always be some products targeted at specific groups, but the general idea is to switch from catering for geeky men to catering for everyone. That must be a good thing.