news

Science;|;DOI: 10.1145/1743546.1743553
Neil;Savage
straightening
out heavy tails

A better understanding of heavy-tailed probability distributions can
improve activities from Internet commerce to the design of server farms.

REPRIn TED by PERMISSIon oF HArvAr D BuSInESS rEvIE W FRoM “SHouLD you InVEST In THE Long TAIL?” by AnITA ELbERSE, JuLy–AuguST 2008 CoPyRIgH T 2008 by THE HARVARD buSInESS SCHooL PubLISHIng CoRPoRATIon; ALL RIgH TS RESERVED.

OnLine CoMMerCe hAs affect- ed traditional retailers, moving transactions such as book sales and movie rentals from shopping malls to cyberspace. But has it fundamentally changed consumer behavior?

Wired Editor-in-Chief Chris Anderson thinks so. In his 2006 book titled The Long Tail and more recently on his Long Tail blog, Anderson argues that online retailers carry a much wider variety of books, movies, and music than traditional stores, offering customers many more products to choose from. These customers, in turn, pick more of the niche products than the popular hits. While individual niche items may not sell much more, cumulatively they’re a bigger percentage of overall business.

The book’s title comes from the shape of a probability distribution graph. Many phenomena follow the normal or Gaussian distribution; most of the values cluster tightly around the median, while in the tails they drop off exponentially to very small numbers. Events far from the median are exceedingly rare, but other phenomena, including book and movie purchases, follow a different course. Values in this distribution drop much less rapidly,

34%

35%

38%

38%

40%

42%

42%

44%

47%

61%

13%

14%

14%

14%

14%

14%

14%

15%

10%

10%

10%

11%

21%

10%

7%

10%

10%

7%

7%

7%

16%

13%

9%

7%

9%

7%

9%

13%

9%

9%

9%

10%

12345 67 8 910

9%

8%6%

6%

5%

5%

5% 4%

5%

5%

10%

4%

4%

4%

8%

7%

4%3%

6%

3% 5%

3%

2%

5%

2%

8%

4%

10%

3% 3% 2%

4%

3%

2% 2%

3% 3%

4%

3%

2% 2% 3%

3%

2%

2%

5%

5%

5%

13%

SOURCE: QUICKFLIX

each vertical bar represents a decile of DVD popularity, with the DVDs in decile 10 being the most popular. each bar is subdivided to demonstrate how, on average, customers who rented at least one DVD from within that decile distributed their rentals among all the deciles. shoppers in the bottom decile, for instance, selected only 8% of their rentals from among its titles—and 34% from among top-decile titles.