A Taste For Obscurity: An Individual-Level Examination of 'Long Tail' Consumption

Because online retailers are often able to provide products in a more cost-efficient manner than bricks-and-mortar stores, online channels are characterized by a vast assortment of products. Proponents of the "long tail" principle recently argued that the demand for the wide array of obscure products distributed via online channels may in the aggregate turn out to be quite substantial. This expectation, combined with the observation that online retailers often command relatively high margins on obscure products, has drawn much attention to the potentially profitable tail end of the sales distributions for online retailers. In this study, drawing on two novel large customer transactions data sets obtained from Rhapsody, an American online music service, and Quickflix, an Australian online DVD rental business, that together cover over 1 million products, nearly 80,000 subscribers, and over 23 million transactions, I investigate the characteristics of the customers interested in obscure entertainment products, examine how large their appetite for those obscure products is, and study how much they appreciate obscure versus hit products. Countering the idea that only a small group of "fanatics" is interested in obscure products, I find that a large share of consumers occasionally choose "long tail" products likely not available in bricks-and-mortar stores. However, the consumption of obscure products is particularly prevalent among those people who consume with a higher frequency—hit products have a "natural monopoly" on light consumers—and among those who concentrate on a narrow selection of genres and who have a less restrictive subscription plan. Casting further doubt on the assumed democratizing nature of online channels, hit products typically constitute the lion's share of customers' choices, even for consumers who regularly opt for the most obscure products, and hit products are appreciated more than obscure products—a "double jeopardy" pattern that appears fueled by a customer's familiarity with comparable alternatives. I discuss managerial implications.