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Long Tail 28#

Instead of concentrating on blockbusters, the main bulk of revenues is generated through a 'long tail' of niche products. Individually, these neither demand high volumes, nor allow for a high margin. If a vast variety of these products are offered in sufficient amounts, the profits from resultant small sales can add up to a significant amount.


Apply this pattern to your own business and create your next innovative business model!

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Force Directed Circle

Minimum observation count: 1

Examples: Iconic Cases

Apple iPod/iTunes→ Amazon Store→ Google→ Blockbuster→ CDnow→

How they do it: Apple offers its customers a wide variety of music in its iTunes store. Revenue with individual songs might be small but through the sheer mass of songs users download it generates a substantial amount of revenue.
Learn more about Apple iPod/iTunes →

How they do it: Amazon is offering all kinds of niche products on its platform while ensuring that they are competitively priced. Hence it allows them to adress a big audience of potential customers through its wide offering and good prices, rather than few high margin products. Individual margins might be low but the sheer majority of transactions add up to a significant revenue.
Learn more about Amazon Store →

How they do it: By making their search engine universal and allow customers to look for anything in the internet, Google has become the leading search engine provider. It’s value proposition is to give customers exactly the search results they are looking for, no matter how small the niche. This leading market position supports itself as with a large enough customer group, the probability that someone has searched for a certain thing before increases.
Learn more about Google →

How they do it: Blockbuster, at the peak of its powers in 2004, operated about 9,000 stores globally. For the first Blockbuster store, $800,000 were invested in order to outfit the store and its movie title inventory. At its opening, customers were spoilt for choice, as the store already then made around 10,000 titles available for rent.
Learn more about Blockbuster →

How they do it: CDnow, Inc. operated an online shopping website that sold compact discs and music-related products. In 1995, it already provided listings for over 100,000 music CD and cassette titles via its website.
Learn more about CDnow →



Top Industries     Pattern Co-Occurrence

Below, the top industries for the pattern "Long Tail" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 12 firms using this pattern.


Top Industries
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Entertainment
50% of firms using pattern
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Information Technology
17% of firms using pattern
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Hardware
12% of firms using pattern

All Industries

Below, the pattern "Long Tail" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.


Top Co-Occurrences
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Two-sided Market
6 pattern co-occurrences
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Leverage Customer Data
5 pattern co-occurrences
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Digitization
5 pattern co-occurrences

All Co-Occurrences


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