Who wags the long tail of diversified supply and demand?

The long tail model claims that the following three modifications to capitalism have occured as a result of new technology:

1. Democratize the tools of production – cheap and easy tools for creating products;
2. Cutting the cost of consumption – make distribution cheaper;
3. Connect supply and demand – the availibilty of mechanisms that connect consumers and producers amongst the complex and diverse marketplace.

The first two effects are quite obviously happening, leading to the so called 'long tail' on supply–demand curve, in which niche producers proliferate. However, the nature of the third point is contentious. A naive view would claim that these mechanisms are emergent from some increasingly self–organised and democratic network effect. I disagree. My account argues that in fact the long tail is simply the product of corporate capitalism becoming more sophisticated in dealing with massively increased and rapid demand, thus avoiding stagnation of products and consumer desire. I argue as follows:

1. The number of individual consumers has increased massively. There are simply more people with more money able to buy more units.
2. Each individual has more time in which to purchase products. Indeed the line between the activity of shopping (until recently considered to be a form of work occupied by the housewife) and leisure has dissolved, with a continuum between shopping for necessity and shopping for fun.
3. Demand has therefore increased, but not necessarily in favour of niche producers against big brands. Rather, for most people, the big brands have just got bigger, alongside more peripheral spaces for niche products.
4. And furthermore, the majority of people balance a set of big brands, against a set of niche products. The big brands are usually the products that must be bought quickly with as little hassle as possible, but with the ensuing degree of lock–in. The niche products are less essential, and hence can be treated with more consideration, greater risk but less lock–in.
5. The corporations behind the big brands are entirely supportive of this second parallel set of markets. The availability of a diversity of peripheral products helps corporations in identifying and developing new desires and new products, without the cost and risk of full scale core product [re]development. The corporations know that they can use scale and association with celebrity to engender their products with a degree of recognitional legitimacy and trustworthiness, giving a competitive edge over niche producers amongst a shifting and fragmented population for whom simplicity and consistency are rare and valued. In fact it may be that as the tail extends, consumers increasingly struggle to navigate a complex market place, and are driven again back to simple brands and recognisable labels, albeit ones that constantly mutate around their core identity. The trick that big corporations must master is this: allow consumers enough slack to explore new niche markets, but prime them with values, symbols and identities that allow the consumers to act as a bridge through which the new territories can be colonised if required.

Robert O'Toole : 07 Jul 2006 01:27 |  Tags: Long Tail Networks |  Comments (1) |  Report a problem