Pattern 7: Leveraging the Long Tail
Leveraging the Long Tail. Nice title uh? But what does it mean? It means that being online gives you the possibility to sell niche products, without loosing a lot of money. It means that you can, and maybe even should, reach out to the Long Tail, instead of just the head. One of the advantages with being on the web is that you dont have to worry about having enough shelf space and you dont have to worry about being able to pay the rent for your store. With a “normal” store you have to worry about this, and that often makes using the long tail not profitable. We all have seen a lot of niche stores come and go all the time. They just cant get enough customers to be able to justify their budget. This has all changed because of the internets low cost of production and distribution, and because you dont have to think about stuff like shelf space.
Leveraging the Long Tail
You have a lot of examples of online stores that is successful in using the long tail, like Amazon, Netflix and Rhapsody, check out the graphs under:
Example of long tail between Amazon, Netflix and Rhapsody
I am going to talk about interpunk.com. Interpunk is an online punk music store. Louis Posen, the president of the punk and hardcore label Hopeless Records, tells in a blog at Fast Company something interesting about Interpunk vs. Amazon: “Amazon carries every one of our releases, but their sales are modest at best, maybe 3-5 units per week of each title. Go over to interpunk.com, and each title sells 20 units per week, sometimes more. We do presales at interpunk that can reach 600 copies before street date, something we could never achieve on Amazon.” I find this statement very interesting since Amazon is one of the prime examples of companies that use the long tail. Why is it that the punk rockers prefer to use sites like Interpunk instead of the giant Amazon? It hard to say, but both from personal experience and this blog I would say its because of the experience. Hardcore music fans prefer to buy either directly from the artist or at a store that spesializes in music. You feel you get a better releationship with the band, and buying through more spesialized stores than Amazon makes you feel like you are supporting the music environment. I personally always buy from sites like In Flames’ official fanpage or the Norwegian band shirt store Rockshop.
Some of the best practises when you are using the long tail is to stay cheap. You have an advantage with not having as much costs as normal stores, use it! People buy from the internet often because its cheaper, if you are more expensive then they will just go somewhere else. After comparing some prizes with Amazon I noticed that Amazon often is more expensive, that could also be one of the reasons why the buyers prefer Interpunk.
An idea for Interpunk could be to have a rating system, or a system like Amazon has, where you get up suggestions to what you could be interested in from what other fans has bought. At the moment they have a vote for your favorite song system, but it doesnt really help consumers with deciding about wheter they should buy the record or not.
That’s one of the wonders with the internet, unlimited storage. Businesses who leverage the long tail strategy will surely flourish without a doubt, if they know exactly what the problem is in the market. Looking at your graph, Wal-Mart is able to store only 5% of what Rhapsody has in storage. Such a huge contrast between those two companies! Is there a music recommendation system that Interpunk uses? E.g. base on the users purchasing history the system is able to figure the most appropriate music recommendation. I think this is another future development they can endeavor in.
| Posted 1 year, 9 months agoYes, I totally agree with you! The only system, that I could find at least, is a rating system where you vote for your favourite song. But it doesnt really help with deciding what record to buy.. So yes, thats definitly something they should consider.
| Posted 1 year, 9 months agoThat is indeed a really interesting quote. I wouldn’t have expected that at all, but after thinking about it it does make sense for a few reasons. Listeners have loyalty – they go to interpunk because they trust them to have what they’re looking for, and as you said, they “prefer to buy either directly from the artist or at a store that specializes in music”. If the prices are the same, it just comes down to loyalty. This is a really interesting concept, I haven’t seen anyone else identify it either, well done.
All of that said, perhaps it should be noted that it is possible that those 3-5 units per week would not have been sold at all if they were to not leverage Amazon. From that point of view, it’s a 20-25% increase in sales, which is very significant.
| Posted 1 year, 9 months agoYeah, it surprised me at first as well. But after thinking about it, it totally makes sence. I do the same thing.
| Posted 1 year, 9 months agoYou are making an exellent point with the 20-25% increase in the sale! I hadnt really thought about that.
Also another great example of how Amazon’s API is working for it. Great blog you explained the concept very well in your own words.
| Posted 1 year, 9 months agoThanks Jack!
| Posted 1 year, 9 months agoI know exactly how the interpunk.com users feel, being a fan of a somewhat niche form of music myself in this part of the world. That music being heavy metal (but not the semi-popular here genres of metalcore and deathcore) I find myself looking for sources of my interest and most big stores and mainstream providers don’t provide all to well especially in the local market. Plus punk and metal both have a cultural element which points towards a “brotherhood” and loyalty of sorts where we’d rather buy direct from the artist or a specialty shop because it furthers the community.
| Posted 1 year, 9 months agoYes, I totally agree with you Tyson! The feeling of supporting your band is really important for most hardcore music fans! For example, buying shirts at concerts are my favourite place to buy new shirts. It gives you a memory from an awesome concert, and you know that the money goes directly to the bands pocket.
| Posted 1 year, 9 months agoInteresting article. I found that some artists rock band prefers to advert their product/song themselves by cutting out the middle man as they had encountered several issues being cheated when it comes to revenue. Do you see this as a future trend that likely to occur virally or vice versa?
| Posted 1 year, 9 months agoEnjoyed the post – it actually stirred me into doing some searching of my own and I ended up finding a site that was all for my favourite music (Gothic Metal). I should be thanking you for inspiring me to search for it!
| Posted 1 year, 9 months agoNice to hear that you liked my post, and that it gave you some inspiration:)
| Posted 1 year, 9 months ago