The (not so?) long tail

Rethinking the Long Tail Theory: How to Define ‘Hits’ and ‘Niches’

In a working paper titled, “Is Tom Cruise Threatened? Using Netflix Prize Data to Examine the Long Tail of Electronic Commerce,”Wharton Operations and Information Management professor Serguei Netessine and doctoral student Tom F. Tan pull information from the movie rental company Netflix to explore consumer demand for smash hits and lesser-known films. Netflix made its data available as part of a $1 million prize competition to encourage the development of new ways that will improve its ability to introduce customers to lesser-known titles they might find appealing.

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The paper argues that the research findings have important implications because the Long Tail theory has gained momentum in the business world. “Whether or not the Long Tail exists is a fundamental question for decision makers in marketing, operations and finance who face the prospect of further penetration of the Internet channel, which offers expanding product variety and new recommendation systems to help manage it,” the paper states.

According to Netessine, the research is likely to generate controversy because of its findings that contradict the popular Long Tail theory. Nonetheless, Anderson is the first individual acknowledged at the end of the paper for “his encouraging comments and constructive advice.” Says Netessine: “We have agreed to disagree.”