In 2004 Chris Anderson introduced an important concept: the new and cheap distribution online chain was ready to change the market. The focus was shifting from selling large volumes of few popular items to selling smaller volumes of many more items.
This model was perfect for describing what was happening in music distribution with digital downloads, getting rid of the issue of limited shelf space. The same model could be replicated to an unlimited range of businesses.
Google was one of the first to understand the potential of the long tail, opening “Adsense” online adv program in June 2003. With a self-service online tool, Google was giving the opportunity to all webmasters and small publishers to get revenues by hosting ADV campaigns sold directly by Google with another self-service tool named Adwords, already launched almost 3 years before.
After almost 15 years it seems that this idea has some limitation. In January 2018 for example, YouTube decided to cut almost completely their long tail. Monetization for YouTube channels had new minimum limits: 1,000 subscribers and 4,000 hours of watch time within the past 12 months.
According to Chris Anderson the extra distribution given by the long tail had a small distribution cost compared to the great shift in revenues.
Amazon in 2018 started banning not only merchants but also customers with too many returns.
Also Google has changed search engine behavior: people working in SEO and SEM for sure realized how their jobs are becoming more and more difficult. It seems that Google is willing to return less search results cutting not only “toxic” websites but also good ones.
Why are companies trying to cut the long tail?
All this content variety gives too much choice: customers are overwhelmed by too many options. Even YouTube is struggling since it keeps proposing the same content, most of all already seen.
This could be resolved with big data algorithms in order to develop more efficient recommendation engines.
This abundance is also an issue for big companies, who need to decide where to focus their marketing efforts.
The other big issue is related to costs. Distribution costs are low in the assumption of the the long tail theory, but there are other hidden costs like accounting or customer care. Most of all it makes it really difficult and expensive for big corporations to control the quality of their services.
For this reason right now the long tail is shrinking and becoming a “medium tail”. Instead of putting filters for “reducing the noise” and having a better “signal to noise ratio” they are giving away a part of the tail. The part that is by definition endless.
All of this issues would be easily solved with blockchain technology. It will become a powerful tool for accounting, payments and a good reputation ranking system for every single item, merchant or customer.
And the long tail will be long again.