Classroom Companion: Business

 
Chapter 16 · The Long Tail

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In the banking industry, the long tail has been exploited to provide microcredit to 
lower-class and poor people. For instance, Grameen Bank in Bangladesh offers 
small loans to people and private enterprises that would normally not be qualified 
for a loan in a regular bank.
Crowdsourcing is an example of long tail production. The long tail here is made 
up of all the skilled people that may contribute to a software product but are, a 
priori, unknown to the developer. Wikipedia encourages the regular Internet user to 
become an author of the encyclopedia, hence creating a long tail of contributors. 
Wikipedia’s workforce is supplied by many contributors in a long tail of supply.
Big companies, such as Amazon, can profit from all products—both products 
that sell in huge numbers (head) and products that sell in small numbers (tail). 
However, the long tail has also made it possible for individuals to start a type of 
business that was not possible before. For example, individuals may now sell mer-
chandise on eBay, offer their services on Airbnb and Uber, and sell their own books 
on Amazon. These individuals supply the long tail with products and services that 
were not previously available to consumers. Selling merchandise without a physical 
store was expensive before the advent of e-commerce. However, today, anyone can 
become an e-commerce retailer (or reseller) by setting up a web page to offer man-
ufactured products. Such a business will find its place on the long tail among thou-
sands of other suppliers in the same business area.
16.3 
 Numerical Analysis of the Long Tail
The term “long tail” alludes to statistical distributions where a large portion of 
occurrences are far away from the main part of the distribution. In statistics, the 
long tail distribution is a special case of heavy tail distributions defined as follows.