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The Long Tail: The 80/20 Rule Revisited
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1. You can offer many more products.
2. Because it is so much easier to find these products (thanks to recommendations and other filters), sales are spread more evenly between hits and niches.
3. Because the economics of niches are roughly the same as hits, profit is spread as evenly as sales.
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Netflix and Rhapsody, both of which have between 20% and 30% of their sales in products not available in their main offline competitors.
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it makes more money on those niche sales because they don't consume scarce shelf space.
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The top 1,500 albums represent 80% of CD sales in traditional retail, such as Wal-Mart, but only 40% of the sales on Rhapsody. Netflix data is looking closer to 50%.
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