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  • July – August 2008
  • Article
  • Harvard Business Review

Should You Invest in the Long Tail?

By: Anita Elberse
  • Format:Print
  • | Pages:9
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Abstract

The blockbuster strategy is a time-honored approach, particularly in media and entertainment. When space is limited on store shelves and in traditional distribution channels, producers tend to focus on a few likely best sellers, hoping that one or two big hits will carry the rest of their lists. But online retailing and the digitization of information goods have changed the commercial landscape: Virtual shelf space is infinite, consumers can search through innumerable options, and the marginal cost of reproducing and distributing products is low. What does that mean for the blockbuster strategy? In his 2006 book, The Long Tail: Why the Future of Business Is Selling Less of More, Chris Anderson, editor of Wired magazine, argues that the sudden availability of niche offerings more closely tailored to their tastes will lure consumers away from homogenized hits. The "tail" of the sales distribution curve, he says, will become longer, fatter, and more profitable. Elberse, a professor at Harvard Business School, set out to investigate whether Anderson's long-tail theory is actually playing out in today's markets. She focused on the music and home-video industries-two markets that Anderson and others frequently hold up as examples of the long tail in action-reviewing sales data from Nielsen SoundScan, Nielsen VideoScan, the online music service Rhapsody, and the Australian DVD-by-mail service Quickflix. What she found may surprise you: Blockbusters are capturing even more of the market than they used to, and consumers in the tail don't really like niche products much. Elberse outlines the implications of her research for producers and retailers, and offers strategic advice to both groups.

Keywords

Demand and Consumers; Distribution Channels; Sales; Marketing Strategy; Online Technology; Motion Pictures and Video Industry; Music Industry; Retail Industry

Citation

Elberse, Anita. "Should You Invest in the Long Tail?" HBS Centennial Issue Harvard Business Review 86, nos. 7/8 (July–August 2008): 88–96. (HBS Centennial Issue.)
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About The Author

Anita Elberse

Marketing
→More Publications

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More from the Author
  • Number One in Formula One: Leadership Lessons from Toto Wolff and Mercedes, the Team behind One of the Greatest Winning Streaks in All of Sports By: Anita Elberse
  • The NFL’s $110-Billion Media Rights Deals By: Anita Elberse and Elizabeth Warner
  • Toto Wolff and the Mercedes Formula One Team By: Anita Elberse and David Moreno Vicente
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