No 8 Ventures

Long Tail Economics

Posted by: | Andy Lark | Marketing & Evangelism | 10.06.2006

Long Tail economics are spawning a new generation of start-ups looking to monetize, well, the Long Tail. The New York Times today has a terrific example of it in action at NetFlix. NetFlix is an online movie rental store with a twist. You pay a flat monthly subscription – say $15 – you keep the movies for as long or as little as you want and then post them back. Within a day or so you get new movies from the list. (My wife and I have a running battle regarding whose movies move up or down the list).

To illustrate The Long Tail – “Out of the 60,000 titles in Netflix’s inventory, I ask, how many do you think are rented at least once on a typical day? The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right? Well, the actual answer is 35,000 to 40,000. That’s right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer.”

NZ has spawned its own imitators – Fatso being one. It will be interesting to see the Long Tail works in a similar way in NZ.

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