Discovery, User Experience and the Long Tail
There has recently been some debate as to whether the long tail for ebooks exists:
— “Dispelling the Ebook Long Tail Myth” by Marceloa Vena, head of the digital trade book business at Italian publisher RCS Libri
— “New Data on the Long Tail Impact” By Mike Shatzkin, industry consultant and Digital Book World Conference chairman
The Long Tail for ebooks does exist. It is even getting longer and more stretched out than ever before, but life for those authors and publishers out in the long tail isn’t improving, at least not yet.
Chris Anderson’s article “The Long Tail” first appeared in Wired magazine in October 2004 (almost 10 years ago) and was later (2006) published by Hyperion in extended form as a book. Despite its impact, it may be among the most misunderstood business books ever written.
The central thesis of Chris Anderson is that the Internet has changed retailing, not production:
— The Internet has reduced the cost of holding inventory, especially content-based inventory, to near zero. There is no real benefit in restricting the size of the catalog, as a physical book shop must. On the contrary, a larger catalog creates a stronger value perception of what the retailer can offer (also true for physical bookshops, but it comes at considerable cost).
— There is increased profit potential for retailers because the margins of long tail items are superior because consumers are less price sensitive when it comes to niche content.
— But in order to exploit the long tail retailers have to build “filters” that actively guide users into the long tail. This part of the book is often missed or overlooked.
Chris Anderson book “The Long Tail” has been misunderstood in many ways and one presumes especially by readers who did not take the time to read the second part of the book in depth:
— Chris does not argue that a retailer can offer long-tail content only without having the best-sellers — the “head” of the tail. On the contrary, the head is essential to attract consumers to visit (familiarity) and it behooves the retailer to then guide the user to long-tail content where retailer margins are higher. Implicit in this message is that availability by itself, greatly improved by the Internet though it is, does not favor the long tail. It is availability PLUS discovery filters (those “algorithms” so much disliked by many in publishing) that drive purchases into the long tail.
— Also Chris does not argue that producing long-tail content is more profitable than producing block-buster content unless your overhead is near zero (as it is for user-generated content, but certainly not professionally produced content).
Some of the key exhibits Chris shows are subscription services like Rhapsody (Spotify would be a better contemporary example) and Netflix. These subscription services require users to continuously discover and consume new content or the user will unsubscribe, which represents a loss of income for the service operator. Thus subscription services have strong interest in a user continuously discovering new content. Spotify understands this very well as its purchase of Echonest (the foremost “discovery algorithm” company in the music industry) and several playlist-curation start-ups shows. Improved discovery beyond a honeymoon period of several weeks to a month is not an implicit result of having all-you–eat access to content, but a business imperative for subscription providers to avoid losing subscribers and which requires additional effort by the service operator.
As an aside: Many ebook subscription services, like Oyster argue they are “aspirational services” like gym memberships. Users remain members even if they don’t actively use the service out of guilt or for reasons of optionality (cancel your gym membership and you have to pay a sign-up fee to join a new gym). Book readers have alternatives in the form of simply going to a bookshop or borrowing from their local library. A book subscription service that is not actively used on the other hand may be dropped in a heartbeat (nothing is more annoying than money leaving your account every month).
Returning to one of my earlier points: The internet per se, does not improve content discovery, which is what the study published earlier this week on the DBW blog reaffirms. The Internet makes content more readily available, for example via Google, if you already know it exists (awareness), have developed an interest in the content (interest) and are sufficiently motivated (desire) to search for it (action), the four steps in the traditional AIDA marketing funnel.
We know from mobile operator portals, especially in the WAP era [WAP = Wireless Access Protocol or how we accessed content on mobile phones before there was the iPhone] that cumbersome user interfaces (and few things are more tedious than pressing tiny buttons on a phone to navigate from one screen to the next) REDUCE discoverability even in the presence of very long tails.
Amazon offers a superb shopping experience, if you already know what you are looking for (awareness) and want to buy it (desire/action). Through low prices, ease of use, trust and reliability Amazon has built a platform that is not a discovery portal, but a destination where you mostly buy content discovered elsewhere (the much loathed show-rooming effect).
Amazon does make recommendations but these are optimized to up-sell or cross-sell (increase your basket value) or are based on re-targeting (reminding you of products you previously clicked on). Up-selling for Amazon means guiding a user to higher margin products, which are typically not books. It is also worth bearing in mind that Amazon’s recommendation engines are optimized to be extremely fast. This comes at the cost of recommendation quality. Any delay would lead to consumers abandoning their shopping basket and hence reduced revenue instead of increased revenue.
In a nutshell, improved availability alone does not lead to improved discoverability. The critical component to better online discovery experiences are great user interfaces and recommendation algorithms and we have yet to see the power of personalisation, the Internet’s biggest strength, being fully deployed.
Bookshops have been optimizing the discovery experience for hundreds of years, online book shops (and Amazon in particular) have not.
The future is still ahead of us.