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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.
Examples: Iconic Cases
How they do it: Instead of offering their advertising solutions to few companies, through Facebook all kinds of companies and initiatives ranging from small to big in advertising budget can use the platform to target their audience. Although individual small customers may don’t have a big advertising spend, the amount of companies adds up to significant revenues.
Learn more about Facebook →
How they do it: While a spectacular 10,113 YouTube videos generated over 1 billion views, among the platform’s over 5 billion individual uploads there are many that have only been watched a handful of times, consisting of a long tail of niche videos.
Learn more about YouTube →
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: 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: Nintendo offers a wide variety of games for its game consoles. The games are not necessarily developed from Nintendo itself but all need to be certified by Nintendo to run on the consoles. The large variety of games allow for targeting of different age groups and genres.
Learn more about Nintendo →
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
Entertainment
63% of firms using pattern
63% of firms using pattern
Information Technology
22% of firms using pattern
22% of firms using pattern
Hardware
17% of firms using pattern
17% 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
Two-sided Market
6 pattern co-occurrences
6 pattern co-occurrences
Leverage Customer Data
5 pattern co-occurrences
5 pattern co-occurrences
Digitization
5 pattern co-occurrences
5 pattern co-occurrences