Long Tail Theory - Anderson

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Long Tail Theory - Anderson

In his 2006 book: "Investing in the Long Tail: Why the future of Business is Selling Less of More", Chris Anderson - Editor of Wired Magazine - presents his Long Tail Theory on demand curves:
1. The long tail of demand curves is getting longer, because when goods don't have to be displayed on store shelves, physical and cost contraints on selection disappear.
2. The long tail of distribution curves is also geting fatter, because customers are going to buy more niche products instead of blockbuster products or bestsellers.
After doing some research, Professor Anita Elbertse concludes that only the first idea of Anderson is valid. Blockbusters, topsellers and hits are increasingly where the biggest profits are made. According to her, "it is therefore highly disputable that much money can be made in the tail" (in HBR July-August 2008, p 88-96).

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