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Internet Increases Variety of Goods, Services, and Culture

LongTailBK.jpg Source of book image:  the WSJ review cited below.

 

According to Mr. Anderson, technology is not just accelerating the delivery of traditional pop culture but affecting the choices we make.  The key to such change is a phenomenon he calls "the long tail."

In a traditional graph of sales and demand, there is a stratospheric swoop upward where hot products and services are tracked, and a long descending line tracing the less spectacular performance of low-volume also-rans.  For years, these outliers fell off the edge of the market or held only a marginal position, with minimal profits.  These days, though, technology has allowed such niche interests to thrive, finding steady customers and rising levels of interest.

For the full review, see: 

STEVEN ZEITCHIK. "BOOKS; A Nichefied Mediaquake; Technology has revolutionized distribution, but doesn't talent still matter?" The Wall Street Journal (Sat., July 8, 2006): P8.

 

Anderson's book highlights an important result of the internet revolution:  the increase in the variety.  In an earlier academic article, that discusses and measures this effect, Erik Brynjolfsson and his co-authors (see below) looked at the effects of Amazon.com on consumers.  They found a substantial benefit to consumers from lower book prices, due to more competition, and better information.  But their surprising result was that they found a much larger benefit to consumers from the greater variety of books that Amazon.com makes readily available.

The darkened long tail in graph below roughly represents the books available through Amazon that would not be available in even the very largest 'bricks-and-mortar' book store.

There are important implications for both readers and writers.  Readers are more likely to find the kinds of books they want.  Writers are more likely to find a sufficient readership to be able to sustain themselves through their writing.   

 

Source of graph is p. 1589 of:  Brynjolfsson, Erik, Yu (Jeffrey) Hu, and Michael D. Smith. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers." Management Science 49, no. 11 (2003): 1580-96.

 

The citation for the Anderson book is:

Anderson, Chris. The Long Tail. Hyperion, 2006.  (238 pages, $24.95)




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