The infinite tail

Some time ago, I attended a partner meeting at a VC. At some point during the meeting one of the partners proclaimed that YouTube is full of useless and pointless content which nobody really cared about. I will never forget this rant. He did not understand the power of the internet and it’s distribution mechanism.

Chris Anderson introduced the term “Long Tail” in an article in Wired magazine in 2004. Later in 2006 he wrote a book about it called “The Long Tail: Why the Future of Business is Selling Less of More”. In short the long tail is a theory where companies increase their relevancy by offering large numbers of products even though they sell only limited number of items per product. This became possible mainly because of the internet as a distribution mechanism. The cost of stocking and distribution costs have gone down significantly because of it. Examples of companies employing this strategy are Amazon and Netflix.

The world has changed since 2004. The long tail has been successfully employed by a number of companies, but the tail is getting longer. Way longer. Self-publishing and online creation have changed that. The internet has moved beyond making available what existed or created outside the internet. The internet has become the place of creation itself. YouTube is a good, early example of that. Self-publishing of videos have inspired and entertained millions of people and is still doing that today.

But self-publishing is beyond many of the frivolous videos on YouTube. Services like Lulu.com have over 1 million creators who published millions of books. Using Amazon’s CreateSpace service creators can distribute their book, music and movies to Amazon’s worldwide audience.

Since a couple of years, online creation and self-publishing of products became possible using services like Thingiverse and Shapeways. On demand manufacturing made possible using 3D printing, has moved self-publishing beyond the realm of media and into the world of physical goods. These services still have not reached their full potential and others will join this segment in the coming years, but the change is significant.

The basis of the theory of The Long Tail is underpinned by the fact that the internet lowered distribution costs, and thereby making it possible to offer large inventories to customers. But the rise of self-publishing has changed the distribution mechanism itself. The net effect is that the tail is getting longer each day. It never gets shorter, and for that reason, I would like to rename it to The Infinite Tail.

Products will never go out of stock, and their availability is infinite. Digital shelf costs are low, and they go down each day. The internet has made it possible to distribute individual creations to large audiences. For each creation, there is a potential market — sometimes as small as 1. But with new production technology and distribution mechanisms, the cost of producing and distributing a single item is not prohibitive anymore. That is what I call The Infinite Tail.