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The New Tipping Point?

If you haven’t read Chris Anderson’s piece on the Long Tail you’d better… Usage of the phrase are popping up everywhere. The Long Tail has many other names – like, “The Network Effect”. Or, is it “Viral Marketing”.

Actually, Chris has crafted a very unique view of how the web coupled with the infinite inventory and access of the web are driving new purchasing behaviors and market phenomenon. This is actually incredibly stimulating as a notion for all marketers. It points to the need to look beyond the 20% that account for 80% of the revenue towards the massive incremental revenue potential of scaling the 80%.

To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service (owned by RealNetworks) that currently offers more than 735,000 tracks.

Chart Rhapsody’s monthly statistics and you get a “power law” demand curve that looks much like any record store’s, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero – either they don’t carry any more CDs, or the few potential local takers for such fringy fare never find it or never even enter the store.

The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody’s top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it’s just a few people a month, somewhere in the country.

This is the Long Tail.

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