Saturday, August 8, 2009

Week 3: Microsegmentation and Social Media, part 2

I read the first chapter of Chris Anderson's "The Long Tail" on my flight home from our in-residence last night, and then listened to our Professors' discussion this morning. It was reassuring to hear some of the concerns I had about the theory get validated, particularly the extent to which Anderson may be overreaching with his theory of a "positive feedback loop that will transform entire industries - and the culture - for decades to come."

Anderson talks about choice unlocking demand that had been previously constrained by the "tyranny of locality." As one of the very people Anderson describes whose curiosity for "Touching the Void" was piqued by "Into Thin Air," I can't argue the point. Still, it's a stretch to take what begins as an argument about how technology has altered media consumption habits and suggest it will reshape the world as we know it.

The Professors point out a tendency for more obscure titles to have lower satisfaction scores among online retail customers, citing the possibility that they tend to be of a lower quality (I know there are exceptions to this, but still, intuitively, at least, this seems likely to be true). Another correlation I can imagine is between the size of the producer and the reliability of their supply chain (like the small press that prints books in short runs). This is important because online buyers of physical goods are forced to delay consumption; in turn web sellers go to great lengths to minimize the annoyance, promising extremely prompt and subsidized shipping. From my experience, this is pretty darn important to online consumers, and backorders can cause serious brand damage. To butcher The Rolling Stones' "Gimme Shelter," competition, Amazon, is just a click away.

This is just yet another reason why it's unsurprising that an online retailer would want to switch from physical to virtual goods, and this is the part of "The Long Tail" that was insightful to me: the argument that there's a link between a product's distribution constraints and the length of its market's tail (fewer constraints=longer tail). And so, this is how we find ourselves with the Kindle. On that, all I can say is that according to "Always On," the book is the only "old" media format that consumers are still actually increasing their exposure to, and if Kindle reviews like this are any indication, I don't see the book business getting "Napstered" any time soon.

p.s. I agree - "The English Patient" was HORRIBLE!

1 comment:

  1. Good comments. The idea of the Long Tail is intriguing and as one thinks about it more, there are many implications and questions. There is no doubt that the web has made it easier to find broader assortments of products. (Just take a look at for incredible choices of shoes.) However, there are costs to variety and customization that will naturally limit the number of alternatives. Manufacturing costs, despite automation, tend to increase sharply. Inventory costs can increase, but one advantage of the web is that wider geographic areas (and thus larger markets) can be covered. This makes carrying low demand items economically feasible. Another cost is shopping cost. When consumers are faced with huge numbers of alternatives in looking for a product, this can result in no purchase or frustration rather than greater satisfaction. Finally, not everyone want to have different products. People seem to like to copy others - dress the same, enjoy the same musice, etc. I think that social forces are powerful that keep us in sync to some degree.