Classroom Companion: Business

16.2 · Internet and the Long Tail

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importance of efficient information search both on the web and on homepages of 
vendors such as Amazon, allowing customers to skim through millions of products 
using search queries based on product names, key words, product description, 
product category, or other information.
Offering products in the long tail is a competitive advantage for providers. This 
is because customers prefer variety and options when selecting products to buy. 
The long tail also gives the provider more relevant options for advertising and rec-
ommending similar products for the customers. Hence, companies that offer prod-
ucts in the long tail are rewarded by both increased sales and improved customer 
satisfaction by displaying a long list of products to choose from (Brynjolfsson & 
Saunders, 
2013
).
The long tail has been exploited in many digital businesses. In the music indus-
try, the digitalization and streaming of music means that more titles can be offered 
to customers compared to a traditional music store. Spotify, for instance, offers 
access to more than 30 million songs, while the biggest record stores accommodate 
around 100,000 albums (equivalent to about one million songs). For Spotify, there 
is no cost associated with storing one extra song and making it available to users 
(zero marginal cost). Moreover, Spotify and other digital music provides may also 
de-bundle albums and sell individual songs.
Definition 16.1 The Long Tail
The long tail refers to goods and services that are in low demand individually but 
collectively contribute to substantial sales.
Sales
(revenue)
Number of
products
Head:
Books ranked 1–100,000
Tail:
Books ranked 100,000

36.7 %
63.3 %
. Fig. 16.2 Amazon sales. (Authors’ own figure)