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samedi 19 septembre 2009

Since 2005 ,my academical and empirical position on Anderson's Long Tail Distribution was "binomial"....

Since 2005 ,my academical and empirical position on Anderson's Long Tail Distribution was "binomial": to position the theory and the practice, Anderson was excesively confident and deterministic. As an "extremistan" I could say he just fall into a platonic error. Anderson firmily believed that :
- Long Tail was applicable to ANY type of product and connected logistics and distributions
- Long tail would have been in a future dominated by internet "the " only distribution available...
- The economic and profitable size of any "nichebility" would have been irrelevant.

(to be finished)....

As a matter of fact :

Using data on movie-rating patterns, new Wharton research challenges current thinking on the Long Tail effect -- a widely publicized theory that suggests the Internet drives demand away from hit products with mass appeal, and directs that
demand to more obscure niche offerings.
In a working paper titled, "Is Tom Cruise Threatened? Using Netflix Prize Data to Examine the Long Tail of Electronic Commerce,"Wharton Operations and Information Management professor Serguei Netessine and doctoral student Tom
F. Tan pull information from the movie rental company Netflix to explore consumer demand for smash hits and lesser-known films. Netflix made its data available as part of a $1 million prize competition to encourage the development of new ways that will improve its ability to introduce customers to lesser-known
titles they might find appealing.
The Long Tail theory suggests that, as the Internet makes distribution easier -- and uses state-of-the-art recommendation systems that allows consumers to become aware of more obscure products -- demand will shift from the most popular products at the
"head" of a demand curve -- as charted on an xy axis -- to the aggregate power of a long "tail" made up of demand for many different niche products.

The Wharton researchers find that the Long Tail effect holds true in some cases, but when factoring in expanding product variety and consumer demand, mass appeal products retain their importance.

The researchers argue that new movies appear so fast that consumers do not have time to discover them, and
that niche movies are not any more well-liked than hits.
According to Netessine, the Long Tail effect may be present in some cases, but few companies operate in a pure digital distribution system. Instead, they must weigh supply chain costs of physical products against the potential gain of capturing single customers of obscure offerings in a rapidly expanding marketplace. 

Companies, they add, must also consider the time it takes for consumers to locate off-beat items they may want.

"There are entire companies based on the premise of the Long Tail effect that argue they will make money focusing on niche markets," says Netessine. "Our findings show it's very rare in business that everything is so black and white. In most situations, the answer is, 'It depends.' 
The presence of the LongTail effect might be less universal than one may be led to believe."

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