The Long Tail: How Endless Choice is Creating Unlimited Demand
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Edited version of a review first published on LibraryThing 30 September 30 2008
It should come as no surprise that the editor of Wired magazine, that bible of all things technological, should be enamoured with the significance of the internet, but even so, only someone totally besotted with it, and apparently unaware of the world beyond it, could have written a book like The Long Tail, being as it is informed so deeply by such a utopian (or dystopian, depending on how you look at it) view.
Chris Anderson believes the internet has changed the fundamentals of economics, for all places, for all time.
He’s not the first to think this, of course: legions of young investment bankers, now deceased, made a similar mistake in those first few giddy months of the new millennium before the bubble burst. I can still remember the hubris; the outrageous scepticism which greeted ginger mumblings that things might be in la-la-land.
Traditional business models were over. No longer did you need to have anything old fashioned like cashflow, or a business model which might actually render some profit.
Well, those young bankers, and their clients, got burned, and even now their successors and survivors shudder at the prospect of making the same mistake. And while Chris Anderson hasn’t made that exact mistake, he’s made an analogous one: he’s assumed that some undeniable developments in that (actually fairly slim) part of the economy that he knows about will necessarily revolutionise the whole caboodle.
For Anderson now, just as for those currently redundant young masters of the universe then, we’re on the cusp of a brave new world.
And, just as they were not, he’s not completely wrong, either: There is a phenomenon called the long tail (there always has been; the difference is that it’s now sometimes economic to venture down it).
And it’s true, that opportunity has been created by the confluence of technological developments we’re beginning to call the digital revolution. It’s also true that the internet has radically changed, forever, some business sectors: those that deal in the digital revolution, and in particular "intellectual property", which has been most profoundly affected by it: publishing, music, film, and the industries surrounding the web itself.
But it needs to be kept in perspective. For the rest of the economic world — and for those not dazzled by the e-froth, that’s quite a lot of it — it’s business as usual. The long tail won’t matter a damn. As long as there’s a physical good that needs to be manufactured, shipped and warehoused somewhere pending sale, the long tail - which is as there as it ever was, will be just as inaccessible.
The point is that the long tail wags only for those artefacts whose main value is intangible — which can be practically separated from the physical “thing” that contains them. For example: shorn of the intangible intellectual property inside it, the physical manifestation of a book, as an artefact, islargely (but not completely) valueless. A compact disc, as an artefact, is completely valueless.
The digital revolution has allowed each of us, as never before, to quickly separate the valuable bit from the physical bit. Being a string of ones and zeroes, and thanks to Moore’s Law, the cost of replicating the valuable bit of intellectual property is nil. Once consumers can accept the valuable bit without its "thing" the supply/demand curve looks different, since the supply curve starts at an enormous amount, for one unit, then immediately drops to a micron above zero for the second, and flatlines there until infinity. The only limiter is demand. And, though Anderson doesn’t think so, demand isn’t unlimited. You can only listen to so many CDs, and read so many books.
But for trucks, bricks, oil and other commodities most of the long tail effect will be muted at best, and unobservable for the most part. Sure: businesses will be able to minimise warehousing costs off the high street, on a more dispersed basis, but it won’t do much other than save some marginal costs. Someone still needs to store your oil. Oil isn’t a collection of ones and twos. Neither are bricks, SUVs, or most things in the economy.
But, this doesn’t seem to faze Anderson, who rounds off by saying, apparently without irony, that when the technology of “solid state printers” (which render three-dimensional objects in polymer from computer instructions) develops, no longer will we need to warehouse much at all. I guess we’ll just teleport things to our customers. Good grief.
Anderson makes some enticing comments about the inherent shortcomings of intellectual property law given the digital revolution, but then doesn’t really follow them to their logical conclusion. It could have been a nice, and ground-breaking, book had he done this, but the opportunity was lost, and this book sits a fairway down the tail of decent Web 2.0/new technology business books floating around at the moment.
Curate’s egg.