1. MIS 7003 MIS Core Course The MBA Program The University of Tulsa Professor: Akhilesh Bajaj Ecommerce: Should You Invest In The Long Tail © Akhilesh Bajaj, 2007, 2008. All Rights Reserved.

2. Long Tail What is the Long Tail: Niche, specialty products that enjoy distributed, educated markets 30-40% of Amazon sales are with titles that would not be found in a regular bookstore. What does this tell us? What other products fit this long tail? -Music www.cdbaby.comwww.cdbaby.com -Movies www.netflix.comwww.netflix.com -Specialty foods http://www.uplandscheese.com/http://www.uplandscheese.com/ -Tube amplifiers www.vista-audio.comwww.vista-audio.com Any others? Discussion: What are the implications on this for industry? What kind of companies will benefit from this? How can IT help? Improved product scope.

3. Drivers of the Long Tail Supply Side: -Etailers have unlimited shelf space -Print on demand allows books to be printed economically. CNN & Fox News can cover stories across the globe more economically, leading to more diverse stories. Consumer side: -Sophisticated search capabilities allow mature tastes to develop - www.cdbaby.com search featurewww.cdbaby.com -netflix search capabilities www.netflix.comwww.netflix.com -Amazon search capabilities www.amazon.comwww.amazon.com The role of forums and reviews in changing tastes http://audioroundtable.com/General/messages/4317.html

4. Long Term Effects of the Long Tail -Specialized products, mass customized -Lowering of breakeven points due to lower production costs in music, movies, books -Increased differentiation of consumer tastes http://www.espressozone.com/ -Change in the concept of fame/superstar? -Reduction in blockbuster products designed to appeal to all? -Allow distributed niche markets as opposed to geographically focused marketing Is the Long Tail here to stay? Speculation: Reduce urban centers?