The Long Tail Phenomenon Free Essay Example

The long tail is a phenomenon whereby firms can make money by offering a near-limitless selection the term was coined by Chris Anderson, an editor at Wired magazine, and I feel both Amazon and Netflix have a long tail model since they can offer things that many stores don’t carry so there is always something for someone. (Gallaugher) I feel like Amazon has done a great job of using the long tail method and have a limitless selection of anything someone could ever want or need.

I find that I can see things I have never even dreamed about. I only buy books there but it is good to browse.

Amazon “Offer{s} a nearly limitless selection and something interesting happens: there’s actually more money to be made selling the obscure stuff than the hits. At Amazon.com, roughly 60 percent of books sold are titles that aren’t available in even the biggest Borders or Barnes & Noble Superstores”.

(Anderson 2004)

“Amazon.com is a Fortune 500 e-commerce company based in Seattle, WA. Amazon was one of the first big companies to sell goods over the Internet. The company was founded by Jeff Bezos in 1994, and launched in 1995. They started out as an online bookstore and then quickly diversified by adding other items, such as VHS tapes and DVDs, music CDs, software, video games, electronics, MP3s, clothing, furniture, toys and even food items.” (Schneider)

“Amazon took its long tail strategy in a totally new direction, offering its Prime customers (those who pay a $79 annual fee for free 2-day shipping) a wide selection of streaming movies and television shows, for free.

The move is a direct slap at Netflix, a company that started with a focus on renting hard-to-find, long tail DVDs but which has moved increasingly toward popular blockbusters as its video streaming operations ramp up. Amazon will not have nearly as many recent and popular releases in its free offer as Netflix, but for people who are open to Amazon’s viewing suggestions it’s hard to beat free” (Wunker, 2011).

This can show how the differences of how companies charge money for similar services can affect the long tail view. I feel that it is hard to have a long tail kind of company because of the competition “The long tail gives the firm a selection advantage (or one based on scale) that traditional stores simply cannot match.” This is both true of Amazon and of Netflix while Netflix can stream its videos Amazon has to send out its products by post. (Gallaugher)

“The IT Department at Amazon.com also has a massive responsibility, as they oversee an enormous system that is extremely reliable. Amazon.com describes their IT group as “system, database, and networking experts (that) build and operate highly reliable, scalable distributed systems with terabyte-sized databases and infrastructure that can handle a massive number customers (Schneider) Knowing all of this It is used makes it easier for Amazon to fine tune its company and find the best fits for its customers.

It is true that Netflix and Amazon have an endless stock and don’t need to keep them in house but in time Amazon will fully own the business as it expands and offers more products for less. Amazon is global but it is unheard of to use Netflix here in Korea. I actually can use different free sites to stream free videos since the copy right laws in Korea are a bit flexible. In conclusion both companies seem to be doing well in the long tail area but Netflix may fail in the near future unless it ventures out to new and different things. Amazon will crush it if they don’t adapt soon.

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