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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: On Steam, Valve’s game publishing platform, users can download (for free) or purchase access to 781 million different games, as of 2018. This includes large blockbuster titles, as well as very obscure games published by hobbyists. Most distinctly, a large portion of all games published on the platform (or, as much as 450 million games) were never downloaded or played. In 2018, Steam introduced a $100 fee for publishing a game on its platform, to curb abuse of the system.
Learn more about Valve Corporation →
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 →
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 →
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: Spotify features a library of tens of millions of songs, with 20,000 songs added daily. The library features high-profile acts with hundred of millions of ”listens” as well as less-know musicians, whose songs attract less than a couple of thousand ”listens”.
Learn more about Spotify →
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