Below is the first full draft of our presentation upon The media long tail. I shall post the edited edition once we have written and performed the piece.
Hey everybody, in this presentation we are going to be discussing the benefits, the development and future prospects of the long tail. In a nutshell the long tail is an idea based around expanding profits and reaching out to wider audiences and niche markets, which were not originally accessed due to limitations in storage space and
businesses aiming to make maximum or sufficient profits. In order for businesses to do this, they had no choice but to aim purely at the mass market.
2)However now with internet being more accessible, companies have been able to store a more diverse range of goods in free space.
This was pointed out to consumers by Chris Anderson who stated in Wired magazine that long tail can increase business opportunities and raise profits easily by reaching out to wider markets. By storing in warehouses as oppose to small shops, goods can be supplied more efficiently. For example, A typical bookstore can only store a book which is estimated
3) to sell at least 6 copies a year, otherwise the book will not make sufficient profit.
As the diagram demonstrates in every form of entertainment there are more popular mainstream products which ultimately sell well. The long tail constitutes to the more obscure part of the market. You can find anything in the long tail, it is the back catalogue of entertainment ie. Old albums still fondly remembered by longtime fans, live tracks from concerts, foreign bands, foreign films etc etc.
4) but for a considerable amount of time these were not available to consumers.
If we travel back in time before the long tail was invented, it is evident that there are several limitations to our entertainment choices. Many of our assumptions about popular tastes are simply artifacts of poor supply and demand. We have to like what everybody else likes as nothing else is available. This is due to two very restricting limitations that businesses face.
5) First, is the need to find local audiences. An average cinema will not show a film unless it can attract 1,500 people over a two week run; as this amount merely covers the rent of the screen without any profit. Retailers will only carry content that can generate sufficient demand to earn its keep. The second constraint is physics. The radio spectrum can carry only so many stations. A cable can only supply so many TV channels etc.
7) The second rule is HALF THE PRICE THEN LOWER IT. Due to online suppliers supplying a diverse range of stock they are attracting more custom therefore they are able to sell goods for less than half price, while still making vast profit. Often people forget that the long tail includes the popular choices as well as the more obscure buy. In order for online stores to attract customers who purely want popular items they must beat the competitor’s price. By succeeding in this they are fully dominating the retail market.
8) Thirdly, HELP THEM FIND IT. The factor that is generally classed as the biggest advantage to shopping online is the assistance that the online supplier offers. Amazon.com is a great example. By keeping a database of what people purchase, it is easy to distinguish patterns between goods. Therefore when a customer purchases a certain item, Amazon can recommend similar goods that relate.
9) This is beneficial to the customer as they can find things easily and efficiently and intern beneficial to the business as they can add on sales. This again links back to the niche market as it helps to sell more unpopular items. Recommendations are repeated throughout the website to constantly help the customer. These rules are the factors which have shaped the industry and therefore are the reasoning behind many companies such as Last.fm, I-tunes and Ebay, applying and copying these codes and conventions.
10) And it’s by using this technique that these companies have become successful players in the web 2.0. This third rule could certainly be argued to be the most useful in enhancing a company’s revenue, as by enabling every customer to have a stress-free shopping experience you are meeting customer satisfaction and in turn creating bounce back customers.
11) It is obvious that the long tail has introduced an entirely new economic model for the media and entertainment industry, one that is gradually becoming more and more powerful. The long tail offers more advantages to retailers as it means they can supply and demand for every individual and thus makes vast profits, in turn this will also prove successful in gaining customer satisfaction.
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14 + 15) So what does the future hold for the long tail theory, how will it be applied and what will this mean for retail shops? In the future, the long tail will be a necessity to all businesses globally; it will need to be applied to everything. This has already started to happen. Day by day more companies are taking this approach and are trying to supply as broad a range of products as possible however this will eventually leave retailers struggling as online retailers are gradually capturing a much larger proportion of the market. As the future of this theory continues, audiences will expect more and more from the online retailers, expecting them to constantly supply a wider range of goods putting constant demand on the businesses. For every business more demand means more money. More money leads to a wider expansion on goods, which means more customers which leads to greater profit.
Thank You and Good Night (:
You will note that the presentation is laid out in an unusual way, this is due to the constrictions of a PechaKucha format. In order to stick with the regulations of a typical PechaKucha presentation our presentation had to consist of 15 slides. Each slide had to last 20 seconds therefore each paragraph above lasts for 20 seconds. TRICKY, TRICKY, TRICKY :)
