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» Filtering, aggregating, searching, and monetizing the Long Tail from Ho John Lee's Weblog
David Hornik asks: Where’s the Money in the Long Tail? It is certainly the case that in the aggregate, Long Tail content is extraordinarily valuable. The question for VCs and entrepreneurs is "for whom?" … The real money is i... [Read More]

» The Real Money in the Long Tail from The Bay Area Is Talking
It used to be when someone spoke of the Long Tail, you could count on some lengthy explanation to follow involving a graph with the long tail stretching to infinity. Today Susan Mernit links to David Hornik at the Venture... [Read More]

» When Is A Platform A Platform? from SocialTwister
Sometimes, I think I must read all the same sites as Pete Caputa (though I am sure he reads lots more than me). Yesterday, he made and interesting post about the Long Tail and where the value will fall: However,... [Read More]

» Where's The Money In The Long Tail? from i-wisdom
Venture Capitalist David Hornik has posted a great analysis on Ventureblog.com on the economics of the long tail. His question is what kind of services can indeed extract value from the long tail of content creators that are on the [Read More]

» A Silicon Valley Entrepreneur's Musings on 2005 from Nouveau by Zaw Thet - Interesting New Stuff
2005 was a crazy year for me and 2006 looks like more of the same. Before 2006 rolls around I thought I would share some of the questions, lessons, lists and various other things I have on my mind this New Year's Eve. These are in no particular orde... [Read More]

» Media Disruption from Occam's Razor
Interesting panel discussion IT conversation podcast from Supernova 2005 with Dan Gillmor, Jeremy Allaire, Suranga Chandratillake, Lawrence Gelburd on Reinventing Media with good point of view from Blinks and Brightcoves More and more people are turnin... [Read More]

» Long Tail from 180solutions
As we continue to create the content economy, hardly a meeting goes by where "lo [Read More]

» Vertical Social Networks from Genuine VC
In the past couple weeks, we've seen an additional couple of fundings in social networking. While I think that there is a lot of opportunity (i.e. ripe ad dollars for the teen/music demographic) that many of these hot new start-ups are chasing, the s... [Read More]

» Favorite Added: VentureBlog from FeedAgg.com
Well, it's 1:32 in the morning and I've just read David Hornik's entire front page of blog postings. The post on "Where's The Money In The Long Tail" stood out to me, especially in light of what we are doing here at FeedAgg.com, as it describes very s... [Read More]

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vLS

Excellent piece. The conversation about the long tail has drifted quite a bit, this should help return focus.

Outside of media markets, there are examples where the aggregator may enable a jump from obscurity to hit -- but the hit may be short lived. In software, new aggregator platforms -- such as salesforce's AppForce -- promise (we'll see) to reduce the barriers to small software vendors to get their wares built, sold to, and deployed for customers.

It seems entirely possible that a small ISV could have a previously impossible hit with a modestly scoped, broadly applicable feature that salesforce itself has not brought to market. In the old world of ERP/CRM alliances, such a mini-app could never carry its costs.

Interestingly, the salesforce platform goes beyond Amazon et. al. in reducing the normal long-tail sales, marketing, and distribution costs. It significantly changes the economics of content creation and use -- by providing an application platform, hosting infrastructure and cheap access to a complementary product. Put another way, text and music already have standards for content creation (book, browser, cd, mp3). Enterprise software, not so much.

The challenge, of course, is that a modest, popular feature could easily be subsumed in the next release of salesforce's core applications. Not surprising, as sustainable advantage doesn't flow from something unless it is hard.

Thanks for the consistently interesting posts.

clalonde

The question of who makes the money off of long tail content is truly an interesting one. The economics of current brick and mortar long tail businesses (such as used/rare book stores, antique shops) capitalize on the scarcity of the content in question (out of print book, rare vase,etc.) to command a premium price and do not have to share revenues/royalties with the original author/creator of the content.

The economics of the long tail e-business model may not be as completting; as scarcity will not be as big an issue for digital conent for it can easily be duplicated - unlike say a vintage vinyl album or first edition book. This along with the cost to build and maintain the storage platforms for this content and the greater ability of the original authors/creators to track sales and extract royalties/commissions from the content distributor could break the business model. That is unless the sellers are somehow able to convince the buyers that the download of that obscure song from iTunes or that v1.0 eBook or program is worth more than the songs, books or programs that are current and/or more popular.

adam moskowitz

this is a great post. i have been following the long tail for awhile and i believe you are spot on. i have also been involved in a company i believe satiates both aggregation and filtering (at the user level) better than any other play in the market. its called clipmarks and i recommend highly. forget bookmarks or favorite!? clip and collect the SPECIFIC stuff you care about on a page. and if u add to the public engine you are participating in the first social engine created entirely by its users from the ground up (scalable) containing ONLY the content the users care about. NO MORE CLUTTER! sorry for promotion but iam a believer...

ndintenfass

I can't disagree from an investor (or even entrepreneur) perspective, but from a content creator's perspective the reason that there even is a "long tail" is that the threshold for success is so much lower. Music is the obvious example -- sure, most musicians would love to be in the hit portion of the tail, but just making a living would be considered a success for most of the musicians out on the long tail. Look at what EBay has done with even non-digital goods -- lots of folks making what they consider "good money" even if those amounts aren't interesting (unaggregated) to investors or the types of entrepreneurs that are looking for investment. The point being that to make aggregated money in a long tail business, one needs to be thinking of ways to help those out on the tail realize their own versions of success -- picture moving the tail graph (or at least most of it) up a couple notches on the y-axis as a result of your business -- each point on the tail gets their small win, and you get your aggregated big win. I suspect that the biggest long tail success stories will be those who really do create a rising tide phenomenon rather than just find ways to aggregate/filter without bringing at least some value to those who make up the tail.

John Furrier

Nice post except your missing a 'big' piece to the puzzle or should I say the 'biggest' piece. You've got two of the three. Nice work.

The best investors will see what others don't.

Kevin Fortuna

Anothing interesting trend that touches the "long tail" concept is the blurring of the line between media and commerce. A long time ago companies like Digital Entertainment Network and Pseudo Programs tried (and failed) to capitalize on long tail audience value. Back then, they used different jargon -- "thin castles with high walls" comes to mind. The idea was the same, though: if you go after high-value audiences/demos and lock them up, the ad dollars will follow. Now we see Amazon and eBay and others capturing the audience and selling them merchandise. Because they're online, and because they have a digital channel that finally supports rich media, they can develop a media component of their business model -- one that has the potential to be much higher margin than their core model. It'll be interesting to see how aggressively they chase it, and how successfully. Kevin Fortuna

Franco Cumpeta

The long tail could be here, when we recall how many .com .it .us .net . and, and, the next is coming (if not count that ones still living and forgot right now). The long tail is, jus to show an example in "poli". The long tail is in the world growing by websites made of small business, but also connecteted with the large business, because there's no competition between them. The long tail is into setting something valuable for the people living in the real world, not something valuable only for who like to play with the world.

The long tail is also in the fact that if we don't get an answer on how you do decide to use that fat of the money you receive just to have troubles in where to send it, maybe China, maybe to who knows, you lose the main opportunity The America had in the past Century: to be the wise country in which the good ideas strove. Large, fat, overestimated targets, overfilled bank accounts doesn't help that America I dreamt when I was young, in the fifties of past Century.

Don't ask too much, be able to open. To italians, like me, which support is undoubtable, which too often somebody you spit at, supposing we are all pizzas, mafia, and joking people. It is not, very often, mine is the case; so pay respect, and spend money, and let go your arrogance, that has to be used in other minor causes.

The long tail is in the city, not that jelly you managers of the universe too often send away as the future. I never touched the universe, I touch my neighborhoods. By mean of them, maybe, the whole may be disclosed. Disclose it by mean of a general statement setting that from now and ahead we all must be chained to respect and produce under the same rules, set by someone, is not a wise move, actually. This is science, there's a valid issue, not policy, that's another thing.

The long tail is in respect diversities, connecting them in a net of different hot spots, so to get at the same time something global, together with something localized. Giving both, the local and the global.

Now try to send this idea to Google, just because they have to made it and get profits, either to Microsoft, just because the same, and I will sue you forcing you to pay what I had to pey from since the year 2000, for my idea, for my work I kept up against all odds for six years, helped by nobody. For "poli".

Keep in mind this name. It will grow, very fast; your money available or not. And when Los Angeles, Chicago, New York, Hawaii, Miami, San Francisco (intended as enlarged metropolis served by maps) will be in place, don't ask me for; ask why you once again lost the next step in the internet. Not 1.0 or 2.0 or 3.0. The internet is the tcp/ip (Vinton Cerf teaching me) then is the html (Berners Lee teaching me). Any other trick is open, but sorry the internet is ecaxtly this, and it will be, exactly, this. A packed switching network.

My wishes for an Happy New Year.

Have my best greetings.

Franco Cumpeta

Franco Cumpeta

I got, finally, a beginning, here; the spot will be populated; either we may do from every other spot in the future. Keep account, thank you.

Franco Cumpeta

The url is this: (online now - but five years ahead of Google)

http://www.turismo.fvg.it/MB2.0.1/MapBroker.htm?javarel=2

It's not important if it's hidden under my name below. It may be affective to everybody. Stop.

CorpDevDude

This is a great article with many insightful points. A particulary poignant comment by David, "As an aside, I believe that it is difficult to be an aggregator without also being a filterer."


I agree but not with the corollary - you can be a filterer without also being an aggregator. Maybe this was obvious to all readers but a point I hadn't seen in the posts to date.

Alex Pooley

Hmm, I agree with much of what has been said but I think it depends on context.

Understanding the long tail phenomenon has opened up new business opportunities. The long tail is really a term used to describe a broad distribution. So if you have a site on the Internet, you are part of that broad distribution and hence the "long tail". So while the long tail has opened up new opportunities that take advantage of this distribution, the sites that make up the long tail can still make plenty of money.

In fact, if you have an aggregator/filterer on the Internet that takes advantage of the long tail, then you are also part of the long tail.

It's a recursive and beautiful relationship.

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