Do Long Tail Products Create Demand for Social Networks?

|
 |  Includes: AAPL, AMZN, GOOG, NFLX
by: Yankee Group

By Carl Howe

Bokardo.com has an interesting article today titled, "Did the Long Tail Beget Social Design?", arguing that digitally delivered products without the constraints of shelf space create a paradox of choice for consumers


When content is digital, a public good, it is freely distributable by electronic means. It is infinitely copyable at 100% fidelity. Moreover, as the Long Tail shows, libraries of content can be built cheaply which provide value for the long term. Once Google (NASDAQ:GOOG) digitizes all the books in the world they won’t ever have to again.

In other words, all content is available at all times.

What does this lead to? The Paradox of Choice! There are simply too many things to choose from. Which of the thousands of movies on Netflix (NASDAQ:NFLX) do I rent? Which of the books on Amazon (NASDAQ:AMZN) do I read? Which of the songs on iTunes do I listen to?

Ironically, the article posits that the answer to the plethora of digital products is people.

Social design is thus forced upon the marketplace. The Long Tail begets social design. The only way for people to find out what’s best for them is to route around the system in the way they’ve always done.

Ask other people. Have conversations. Give and get recommendations. Tell someone what your preferences are, and they’ll give you their best guess.

And that’s what Netflix and Amazon and iTunes have done. They were forced to, in a sense, for they had no other way to give recommendations to their customers. The old constraint of shelf space is gone.

I've argued similarly here in the past, so it's always nice to hear someone else come to a similar conclusion. I pose one final question though: what will we do when we are overwhelmed with social networks ranging from Facebook, MySpace, LinkedIn, NetFlix, Amazon, and countless others? Who will guide our choices then, when we must choose among the wisdom of multiple crowds and communities?