Innovation and Technology Management - Long Tail - Essay Example

rd to the explosion of online commerce and distribution is that this new distribution medium is changing the way products and services are consumed, away from the traditional model of mass consumption that is premised on scarcity of distribution resources and the need for hits to keep the markets for all kinds of goods and services viable and humming via a reliance on hits. In the new distribution paradigm, there is no additional cost to keeping non-hit products in the inventory, especially with regard to electronic goods such as music and books, and that pioneering companies in the new distribution channels, such as Amazon and Netflix, as well as Apple for music, are finding out that non-hit music, books and movies kept in stock and easily procured by specific niche consumers have come to constitute a steady stream of on-going business, This is to the extent that in some cases, the cumulative sales of these so-called long-tail products and services have come to account for a large portion of the total sales of these firms, dwarfing or becoming comparable to the sales of the hits products and services that used to account for all the sales.

This is a new business reality that is the result of the online commerce revolution itself, and promises to be a very profitable new reality for those who know how to capitalize on the knowledge and implications of the long tail (Anderson 2004). The literature has come to unearth a large number of phenomena in the business world relating to the long tail, even as the term itself has come to be associated with the returns that can be had from keeping goods in stock for those items that are not in large demand but whose costs of distribution, marketing, warehousing, storage and merchandising are low enough that those costs are offset by marginal sales.

Statistically too, the implication of the long tail concept is that there is money to be made within that area of the probability distribution for a population lying at the tails