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Is the "Long Tail" just a Tall Tale?

A new article/study by Harvard Business School Professor Anita Elberse challenges the validity of the Silicon Valley mantra/theory that the Internet created a new "long tail" of demand for niche products that would ultimately undermine and overwhelm the offline trend towards "big hits."  

  • Thank you to Lee Gomes of the Wall Street Journal whose excellent article: "Study Refutes Niche Theory Spawned by Web" brought the new Elberse research to my attention.
    • From Mr. Gomes article: "Prof. Elberse looked at data for online video rentals and song purchases, and discovered that the patterns by which people shop online are essentially the same as the ones from offline. Not only do hits and blockbusters remain every bit as important online, but the evidence suggests that the Web is actually causing their role to grow, not shrink."

Why this is such important new research is that much of the Silicon Valley 'pixie dust' that fuels so many of the new business models involving social networking, crowdsourcing, etc. is predicated on the "Long Tail" book/theory by Wired magazine editor Chris Anderson.

  • (I have read Mr. Anderson's book and blogged on how its interesting theory was embraced by many Siliconistas, even though though the siliconistas don't agree with Mr. Anderson's rule that "one price does not fit all.")

What this new reality-inducing research from Professor Elberse does is it gets us to wonder if the latest Silicon Valley narrative to sell us on the potential of their Internet innovations, may not be eerily similar to the the Silicon Valley hype of the Internet's infinite potential in the late 1990's which contributed to the devastating tech bubble and which destroyed $4 trillion of Americans' wealth. 

  • Now, like during the tech bubble, the Silicon Valley storytelling machine is hyping how what we know of the physical world is not how the Internet works.
  • Professor Elberse's research challenges that notion. 

Bottom line: If the long tail ultimately proves to be untrue or less true than the Silicon Valley hypesters represent, it undermines the case for Silicon Valley's public policy menagerie of: net neutrality, white spaces and copyleft -- which are all predicated on the assumption that the net should be neutral -- meaning the playing field must be leveled by hindering the big players that generate big hits and serve mass markets, so that the net can enable the long tail, niche producers' Internet democracy and free speech. 

  • Now one can see why it is so important to determine if long tail theory is actually valid or not. 
  • It makes no sense to build a whole new body of neutral law and abundance economics if the underlying long tail theory proves invalid.