Home Book Reviews The Long Tail: Why the Future of Business is Selling Less of More

The Long Tail: Why the Future of Business is Selling Less of More

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The Long Tail

Chris Anderson, Editor-in-Chief of Wired magazine, published The Long Tail: Why the Future of Business is Selling Less of More in 2006 after writing an article in Wired of a similar title back in 2004. This is another “must read” book that provided me with a number of insights into the scalability of businesses on the internet. Using a few examples, like Amazon.com and Rhapsody, Anderson demonstrates how the value proposition in retail business shifts when retailers utilize the internet. Typically, stores stock the items most likely to turnover (sell) the fastest since physical shelf space is at a premium. The better your selection, the higher your gross revenues. Anderson shows that the long end of the traditional demand curve is longer than many realize. An example of contrasts is the demand for music downloads.

The largest music retailer in America is Wal-Mart. The average Wal-Mart stocks 4,500 unique CD’s. The top 200 albums account for 90% of Wal-Mart’s CD sales. Rhapsody has approximately 2 million tracks available. The top 25,000 tracks on Rhapsody are the equivalent of Wal-Mart’s 4,500 CD’s. Sales of the next 75,000 tracks (from 25,001 to 100,000) are nearly 25% of Rhapsody’s downloads and there are sales beyond that. From 100,000 to 800,000, the downloads are about 15% of Rhapsody’s totals. According to Anderson, every time Rhapsody adds a track, there’s at least one download a month indicating that someone in the world is interested in purchasing even the most esoteric track. Rhapsody doesn’t have to give up shelf space to add these tracks. Once they’re digitized and added to the virtual inventory, they’re available to the consumer.

Anderson concludes by saying that successful internet companies will adhere to two rules: 1) make everything available and 2) help me find it. I keep his book on the shelf nearest my desk and I subscribed to his blog’s RSS feed.

Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA) and as a member and chair of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.

Comment(3)

  1. Wally,
    I suppose there are some similarities between e-tailers and online universities in this regard?
    If a brick and mortar university decides to add 100 additional courses to their catalog, they have to overcome many more logistical hurdles than an online university.
    I’ve actually noticed that many B&M schools are adding online courses to their catalogs. Is this because “shelf space” is limited and the universities have found that the online format is an overall better value?

  2. Ed:
    I think there are some similarities between online e-tailers and online universities regarding the theory of the “Long Tail.” Because our reach is global and transcends geographical boundaries, we can find students with interests in topics like the Civil War when a traditional school might have difficulty filling the class. As far as the trend of brick and mortar universities adding more online classes, I believe that trend is more in response to student demand and, in the case of community colleges, employer demand. There are studies from respected organizations such as the Sloan Consortium (www.sloan-c.org) that demonstrate online students learn as well as or better than on ground students. I have read reports from brick and mortar schools that indicate online courses cost them more than on ground courses. I believe that is true until they reach a tipping point of scalability. There is, however, the recognition that online courses can reduce the need for physical classroom construction. I recall that the University of Georgia system proposed that all freshman English classes be held in an online format in order to save hundreds of millions in classroom construction costs. Seems to me that that proposal was a smart move. There are two schools, University of Massachusetts and University of Maryland, that have built a substantial number of online programs, more in line with the Long Tail.

  3. Hi Wally,

    This is a typical participative style of leadership with an open-door policy. Please, I am Urging you to keep it up; we the future leaders in Nigeria are actually looking up to you. Aboout long Tail: It is an issue bordering around the business horizon. I think that the problem with most businessmen and women today is thier inability to differentiate between the traditional profit making and contemporary issues of corporate interest, such as social responsibilty; international management; and the importance of emotional intelligence as a success factor to business managers.

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