The Long Tail Effect and Successful Businesses

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The long tail effect suggests that the internet makes it easier to distribute items and products, this will then entail a shift from the most popular products being at the head or centre of the public eye and demand to a number of small niches being increased. So overall we a shifting our focus onto a small number of specific niche markets.

The digital market – Amazon, Spotify, iTunes and Netflix – allows for an unlimited amount of choices for the public with no restraints.

Amazon is a great example of the long tail effect in action as they are one of the world’s most successful e-commerce website. Through using the theory of the long tail effect Amazon holds an advantage over other competitors which makes them the most powerful and popular sites in the world today.

Amazon holds a wide range of products, from DVD’s to CDs, games, books and general products. Through including niche products through these categories it gives amazon the ability to sell their products to a wider audience. What’s interesting about this is the fact that Amazon finds most of its money supplying items to the hundreds of niche markets compared to copies of ‘popular’ items from their best selling range.

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Other sites like Spotify and iTunes are also making money from the long tail theory as they are supplying their customers with growing and extending content. In doing this it allows for customers all around the world to access their niche markets just as simple as finding the ‘top 10 pop chart’ songs.

Netflix also involves this theory somewhat with the availability to stream movies from their site. Netflix holds quite a decent amount to DVD titles from a respectable spread of categories as well as films which may be been discontinued from other rival companies. However, Netflix doesn’t apply the long tail effect as effectively as the other digital markets that were discussed. This would be because the movies which are added to the site are somewhat restricted to viewers based on where they live in the world due to copyright and what not. In doing this, Netflix limits itself in a way and hinders its expansion. Netflix has a great opportunity to make itself one of the world’s most successful business, its possibilities are endless, however, in doing what they are doing they are shooting themselves in the foot.

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3 thoughts on “The Long Tail Effect and Successful Businesses

  1. I really like how you spoke about Amazon. I have lost count how many times I’ve been looking for a certain book or DVD or just something general and the only place I can find it that isn’t some dodgey site is Amazon.
    This then applies with Spotify for me. I think the radio feature is amazing. There nothing better then just plugging 1 song in that you’re feeling and it spits out many more in the same tone. For a while I had premium from my phone plan and I loved having basically any music I want at a great quality whenever I want.
    Great post at being able to identify these big companies that have built their services from longtail.

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  2. Hey Bec,

    I really like how you didn’t just touch on one company but you incorporated a few sites which as active user online I could relate to distinctively. Its really insightful to see how these larger companies have developed from targeting niche markets online. If you were thinking of developing your argument further this brief article delves into the success of Amazon and Netflix. http://www.theverge.com/2015/12/30/10647736/netflix-hulu-amazon-original-shows-streaming-tv-2015

    Like

  3. My favourite part of your post was your choice of businesses that support the long tail effect. See what they all have in common? They’re all online. However I don’t believe Netflix falls into the same category as others. It only stores a certain number of titles, and of course it will be storing the most popular titles in order to get people to subscribe. Therefore although it is online, it sits at the opposite end of the long tail.

    Like

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