In the digital age with dropping costs for inventory storage and distribution, the traditional economy is (partially) transformed to a new economy where products which are part of the Long Tail suddenly become available almost for free. The articles linked to (from Wired magazine) for the most part refer to entertainment industry products like music, video, books etc.
Fig. 1 The Long tail “Power Law like” graph from Wikipedia
What’s interesting is that because of scarce (physical) resources in the traditional economy , only about 20% of the products, – the most popular ones -, are available to consumers. But with the digital economy it is feasable to deliver the other 80% of the products (like Amazon is doing). Even more remarkable, this 80% share amounts to a larger profit than the small 20% population because the costs of storage and distribution are almost the same for all digital products. Apparently Amazon makes most of its profit from the niche products.
I suppose the Long Tail could also apply to any other product or service which can be delivered through the Internet. Software and software development seem to follow these same rules (with the open source software movement). You could probably find the right software for any niche, with varying levels of quality. But isn’t that similar to finding niche music, where you’d find different levels of quality as well?
So maybe every product or service that can be transformed from physical to digital form can be delivered (almost) for free and still give consumers an almost unlimited choice.
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