🔖 Summary in 3 Sentences
A journey through the history of media from printing, radio, TV to the internet. The author explains what is a "Long Tail" and teaches us how to catch it. A great insight into how the internet changes the world from a few big hits to thousands of niches.
🧑🏻 Who Should Read It?
Anyone who is interested to start an online platform.
🔑 My 3 Key Takeaways
The old media is dying.
MSNBC's The Abrams Report, with a multimillion-dollar budget and a crew of dozens, was at the time of this writing watched by an average of 215,000 homes per day. Rocketboom, a Jon Stewart-like comedy news program created online by exactly two people for the cost of some videotapes, two lights and a cardboard map, was watched by 200,000 homes per day over the same period.
Who can remember sitting in front of a TV watching program that aired exactly at 7 pm for news? With the internet, we can get all kinds of content everywhere and on-demand. Last time everyone got to watch the same news at the same time, listen to the same music on the radio at the same time, read the same newspaper on the same day, but now, everyone got to pick what they want to watch, listen and read. The Internet changed all of that. It's the end of an old era and the start of a new era.
"Make everything available" and "help me to find it".
In bricks-and-mortar store, products sit on the shelf where they have been placed. If a consumer doesn't know what he or she wants, the only guide is whatever marketing material may be printed on the package, and the rough assumption that the product offered in the greatest volume is probably the most popular.
Online however, the conumser has a lot more help. There are nearly infinite number of techniques to tap the latent information in a marketplace such as sorting and recommendation.
Research shows that when a group of people is given few choices of jam, they are 30% of the people buy the jam. When a group of people is given many choices of jam, only 3% make the purchase. But why did supermarkets keep on increasing the selection of the same product? It's because consumers actually wanted more choices, but they need you to help them find the right product. For example on Shopee, there's an infinite amount of products sold on it, but it has technology such as search bar, recommendation, highlight, reviews, and rating to help you make the choice. So consumers aren't afraid of variety, they want a lot of choices but also a lot of guidance.
Zero inventory.
One of the problems with carrying books is that a lot of them sell only one or two copies a year. In that case, even orders of 10 copies – instead of 100 or 1,000 – might not be viable. Even if it costs a retailer just a dollar to store a book until it sells (which could be holding on to it for a whole year), the retailer is going to ask itself whether carrying that book is ultimately worth it if it is going to sell in such low numbers. What retailers need is an efficient, economically sustainable way to sell a book that sells just one copy per year. And that means near-zero inventory costs.
Amazon starts its business by selling books. All the other physical bookstores can only hold at most 100,000 books at a time, but Amazon wants to hold 1 million book titles on its website. At first, they directly buy from the publisher and sell it to consumers who order from their website. Then later they introduce a consignment program for publisher to store their books in their warehouse (no need to pay for the book). Later on, they also tried "Marketplace", where third-party can sell thru their website (don't even need to hold the inventory in their warehouse). At last, they introduce on-demand printing, they only print it when an order comes in to further reduce the risk of holding an inventory without a buyer. That's how Amazon reduces its inventory risk.
💭 Afterthought
This book gives me a new perspective on the economics of scale. Cinema only got 12 months schedule to put up new movies, but Netflix can put up endless movies from the past to present to serve all the niches. Radio can only play so little music, but Spotify can play infinite songs and find more that fits your preferred genre. A bookstore can sell 100,000 latest books, but Amazon can sell you all books at ever published. Have you found your long tail?
🛍 How to Buy?
I bought this book on Shopee for RM12.50 (a pre-loved book), but it only left 1. But I found another pre-loved book at this link for RM8 (not include shipping fee).
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