Netflix and the Long Tail….

I was teaching my MBA students about New Service Development and had some trouble with the DVD player when I tried to show a film about Netflix…. so I happened to look for "Netflix Business Model" in case there were any relevant videos on YouTube. The You Tube stuff did not look like the informational stuff I wanted to show. We got my Netflix video to work with the help of a student’s computer, and I got home after a rather long day and happened to just look at the search result from YouTube.

The title of "Long Tail …. " had jogged my memory but watch the video here.

Chris Anderson offers the idea that the digital age provides unlimited distribution possibilities with digital supplies or a combination of digital and physical distribution. Consider the point that movies don’t reach the movie theaters because there are constraints on movie theater distribution capacity. Netflix extends the number of movies that are available. Similarly for music with Walmart at 25,000 tracks with iTunes at 2 Million tracks and probably a total of 25 million tracks out there that’ll come online , according to Anderson. Also similar logic for brick and mortar bookstores when compared to Amazon.This long tail involves many many micro market segments that were difficult to approach before the Internet and the "Flat World." So in contrast to the 80:20 rule Chris Anderson suggests that the long tail will make many many more markets viable for products and ideas that never had a chance due to capacity contraints in the physical world. Consider, that you are seeing this idea right now on this blog before you read my more detailed take in scholarly print (which might take years !) on Chris Anderson’s rather neat idea.

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