The Long Tail is one of the most commonly quoted models for business on the Internet:
The Long Tail or long tail refers to the statistical property that a larger share of population rests within the tail of a probability distribution than observed under a ‘normal’ or Gaussian distribution. This has gained popularity in recent times as a retailing concept describing the niche strategy of selling a large number of unique items in relatively small quantities – usually in addition to selling fewer popular items in large quantities. The concept was popularised by Chris Anderson in an October 2004 Wired magazine article, in which he mentioned Amazon.com and Netflix as examples of businesses applying this strategy. Anderson elaborated the Long Tail concept in his book The Long Tail: Why the Future of Business Is Selling Less of More.
More money is made by creators at the head than at the tail, according to Kevin Kelly, via Chris Anderson:
In pocket #1 of the curve, Seth talks in terms of a creator of a work. In pocket #2 of the curve, he also talks in terms of the creator. But then when he gets to the long tail, he switches away from a creator, to talk in terms of an aggregator of other creators’ work. Why is that? What happens to the creator? The creator is dropped when we get to the long tail “pocket of profit” because the long tail is not profitable for the creator. It’s profitable only for the audience and aggregators.
According to Seth Godin, pocket #2 has some real potential:
The reason you can make money in the niche pocket is that it costs far less to compete here. First, because there’s less competition and the competition is less fierce, and second because it’s cheaper and easier to reach your target market because they’re choosing to pay attention.
After seven years as an independent working online and participating in online content creation, I am starting to wonder how much room there really is in pocket #2 and if it’s just a (very) short extension of pocket #1. Jaron Lanier in You Are Not a Gadget, says:
The people who are perhaps the most screwed by open culture are the middle classes of intellectual and cultural creation. The freelance studio musician, the stringer selling reports to newspapers from warzones are both crucial contributors to culture. Each pays dues and devotes years to honing a craft. They used to live off the trickle down effects of the old system, and like the middle class at large, they are precious. They get nothing from the new system.
If you’re not one of the recognized leaders in your field, can you make a living online or are you just part of the long tail, valuable only to aggregators and their advertising revenues? As a content creator are you providing the fodder that lets Google, Facebook and YouTube earn huge market valuations? Will there be a middle class in the networked economy, or only heads & tails?