What is the long tail theory in economics?

The long tail theory means that as long as the storage and circulation channels of products are large enough, the market share occupied by products with poor demand or poor sales can match or even exceed the market share occupied by a few hot-selling products, that is, many small markets gather together to produce market energy that can match the mainstream. In other words, the sales volume of an enterprise does not lie in the head representing "best-selling goods" on the traditional demand curve, but in the long tail representing "unpopular goods" that is often forgotten.

The Long Tail Theory originated from Van adib's "98 Rule". It found a secret from the statistics of digital music singing: the audience has unlimited demand for 98% non-pop music, and the market for non-pop music collection is huge and endless. The audience was stunned by almost everything! He called it the "98 Rule". Anderson realized that contrary to common sense, adib's "98 Rule" contained a powerful truth. Therefore, he systematically studied the sales data of Internet retailers such as Amazon, Rhapsody, Blog, Google, Yi Bei and Netflix, and compared them with the sales data of traditional retailers such as Wal-Mart, and observed a statistical phenomenon. This phenomenon is like a demand curve dragging a long tail to the end of the horizontal axis representing "variety" in the two-dimensional coordinates of quantity and variety, hence the name long tail.

According to the long tail theory, a large bookstore can usually accommodate 654.38+10,000 books, but a quarter of the book sales of Amazon online bookstore come from books ranked after 654.38+10,000. The sales proportion of these "unpopular" books is growing rapidly, and it is expected that they will occupy half of the whole book market in the future. This means that when consumers are faced with unlimited choices, what they really want and the channels they want to obtain have undergone major changes, and a brand-new business model has emerged. In short, the unpopular products involved in the long tail cover the needs of almost more people. If there is demand, more people will realize this demand, so that unpopular products will no longer be unpopular.