Quote from the conclusion of a wonkish, but fascinating, paper by a three-professor team who first explored “the long tail” of Amazon in 2003 using data from 2000. This paper explores data from 2008 and compares it to their earlier research:
“Amazon’s Long Tail has gotten significantly longer from 2000 to 2008 and that overall consumer surplus gains from product variety at Amazon increased five-fold from 2000 to 2008. This finding suggests that Amazon’s Long Tail phenomenon, which was first discussed by our 2003 paper, is likely to be a permanent shift instead of a short-lived phenomenon. Second, while previous research has assumed a constant slope between the log of sales and the log of sales rank, we find that the sales of a book drop at a faster speed than a regular power law (or a log-linear curve) indicates and that the slope becomes steeper as a book’s sales rank increases. This finding suggests that there may be forces that limit Amazon’s ability to sell books that are extremely niche. Future research is needed in order to better understand the nature of these forces.”
While I’m not a math professor, I’m working on a potential theory regarding the “forces that limit Amazon’s ability to sell books that are extremely niche.” In my theory, the first limiting force relates to the nature of niches: they are small. Indeed, I think that’s why they call them niches. The second force is the likelihood that the entire potential purchasing base of a niche is comprised of individuals who have already written their own book on the topic and who feel certain that any new book on the topic is lame.
Of course, this is just a working theory.
Kidding aside, a version of the professors’ paper, The Longer Tail: The Changing Shape of Amazon’s Sales Distribution Curve by Erik Brynjolfsson, Yu Jeffrey Hu, Michael Smith, can be found at the Social Science Research Network.