Overcoming the retail logic

Chris Anderson explains in a persuasive way the overreaching power that the Long Tale theory has in  online environments. As he recognizes, the old assumptions about popular taste in the retailer world were actually the result of “poor supply and demand matching.”

Back catalogs, underground art and music find now niche audiences and markets thank to digital platforms that break the physical space and the old store logic. (See this controversial example of Fan Fiction).

Anderson calls it the tyranny of physical space and the dictatorship of entertainment hits. He shows how “misses” are also able to make money if they can be found for the audience.  

I agree when he says that the Long Tail economy is good for societies because probably the industry does not know what the public wants.  

His three rules of the Long Tail Theory are also astonishing: 1. Make everything available, 2. Cut the price in half. Now lower it, 3. Help me find it. I specially like his argument when he explains the logic behind the current price for a digital song and how traditional recording studios want to protect their DVD industry by dividing the price of a physical album.

However, his most powerful argument is when he explains the new capability of the industry to go deeper in their catalog to recommend products that make sense to the costumer according to his/her previous consumption. Also recommendations by friends or people we trust have a great impact on consumers' decisions. 

Anderson’s ideas apply perfectly when talking about digital products that don’t need a physical space to be stored.

However, he forgets to mention that most of the shopping transactions in Amazon, for instance, are orders that imply delivering physical things such as print books, clothes and electronics. For those kinds of products, storage and delivery represent a huge problem that the author forgets to mention probably because it doesn’t support his arguments. 

(e.g. In his last blog post, Picard points out that the material world is reining in Internet companies: "Although they [Internet companies] would like to think they operate in a separate virtual world, they also operate in a material world where users and advertisers reside, where advertising and search placement payments take place, where content is created, and where they locate physical offices.”)