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Wagging the Long Tail...

The “Long Tail” concept describes the business niche strategy of companies like Amazon.com for instance, which rather sell a large number of unique or “off” items in relatively small quantities, instead of selling large quantities of a reduced number of mainstream items, as does Blockbuster or Carrefour.

The Long Tail concept believes that for every product there is a somebody willing to pay for it, even if the product is completely out-dated, not well known or of very particular origin. By offering plenty of these kinds of items, the retailer is making up for the low quantity of sold goods.

Another company following the Long Tail concept would be Deezer.com. The website is offering its user to listen to music for free, without being able to download it. The home page is catching its users with known artists and TOP 10 playlists, but once the user clicks on a title or artists a button “similar artists” soon leads the user into an unknown universe of artists which are far from mainstream and therewith pulling its users along the Long Tail.

Musicover.com is using a similar concept, offering the user the possibility of choosing a certain type of music, but then randomly picks up tracks and guides the user into a musical universe he might not yet be familiar with.

I believe the Long Tail concept fits very well in the “customer in charge” environment. The Long Tail niche concepts gives more choice to the customer, offering all different sorts of items, even those less known or not corresponding to mainstream products. The consumers will be offered products, without being obliged to buy or consume, it is within their range of power to decide whether they would like to spend money or simply enjoy the fact of having found something rare to satisfy their individual need.

Freemium as an Economic Concept...

More and more Freemium concepts are popping up, such as social networks, which are basically free, but offering applications or services which need to be paied for. Another form of Freemium can be found in form of an interactive, virutal world - "Second Life".

Second Life is a kind of game, allowing the participant to create one's own avatar and to build up a whole (double) life in the virtual universe, while being able to communicate and connect with the other players. Second Life in its basic concept is free and everybody can enroll, nevertheless to progress in the game and be able to lead a "comfortable life", the player has the possibility to buy items. For instance one can buy or rent a house.
Second Life is also making money through virtual marketing. For example the company IBM invested about 10 million USD to market their company in the virtual universe.
Also those participants who want to make money on Second Life (by creating their own retail stores or virtual “real estate” business for example), they need to subscribe and pay a monthly fee of about US$ 10.
As can be seen, even though Second Life is basically free, they still find their way to make profit through some users, which allows them to offer the basic service at no charge and describes the concept of “Freemium”.

Second Life

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Hey, my name's Eva and I'm happy that you found your way to my Blog! I'm looking forward to sharing brains with you on various subjects which will all of us help to increase our knowledge and progress in our search for increased revenue and profit :)