Long Tail Theory Analysis

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2.2. Explanation of the Long Tail Theory and its relevance in explaining the success of musical streaming platforms The second theory we will focus on is Chris Anderson 's Long Tail Theories on Business Models published in October 2004. Anderson 's (2004) theories claim that our markets are switching from being mass markets to niche markets thanks to the overabundance of online markets stores. Amazon and eBay, for instance, are displacing the classic bricks and mortar stores with their ever-growing catalogues. The author applies this theory to the music industry and to the streaming platforms like Rhapsody, Spotify and Pandora as they are allowing consumers to discover and listen to niche music, which wasn 't as accessible as today in…show more content…
If the 20th-century entertainment industry was about hits, the 21st will be equally about misses", in a statement that announces the reasoning that would eventually lead to his Long Tail Theory. Until very recently most of our entertainment media was stuck in the physical world but thanks to the overabundance of online markets today most of our daily entertainment is located online where the price rent for shelf space is nearly inexistent and the concepts of supply and demand are proving their limits (Anderson, 2004). Online services have way more backlog than conventional retailers, "Rhapsody, for example, offers 19 times as many songs as Wal-Mart’s stock of 39,000 tunes" (Anderson, 2004) and Amazon and Netflix display the same ratio of inventory when compared to their offline…show more content…
Traditionally hits and Blockbusters have been the way to go for the entertainment industry, as they represented the most viable solution for industries in constant need of cash flow in order to fund their newest artist 's album or the printing costs of their future bestseller (Anderson, 2004). However today thanks to the arrival of several big players like Amazon, Netflix or Spotify to name just a few, the balance is shifting towards an economy of abundance where customers have at their disposal an increasing number of products that would have never been accessible in regular retail stores: the long tail (Anderson, 2004). In the graph below (Figure 5) representing the average number of plays-per-month on Rhapsody and the popularity of titles, the Long Tail is represented by the bottom right part of the curve. The graph gives a clear overview of the size of this tail, which almost amounts to the number of plays of the hits and blockbusters also available in conventional retail stores (Anderson,

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