With the World Wide Web, consumers have more choices and ways of finding
niche products and services than ever before. But does the long tail apply in a
wireless world that is still tightly controlled by wireless operators?

You might have heard it in conversations about mobile content. Or perhaps you have even read the book. Conference speakers might mention it during their presentations, but it’s not always immediately clear what it means.

It’s a reference to The Long Tail, a term coined by Wired journalist Chris Anderson, who wrote a book titled with the same phrase.

A lengthy passage is devoted to the term on Wikipedia, which explains that the phrase refers to certain business and economic Internet models such as Amazon.com or Netflix. According to Wikipedia, the argument goes something like this: Products in low demand or that have low sales volume collectively can make up a market share that rivals or exceeds the relatively few current bestsellers or blockbusters if the distribution channel is large enough.

TO BE OR NOT TO BE
The question is, does the long tail apply to wireless? The answer depends on who you ask. Some see it as an overused term along the lines of Web 2.0, where the more it’s mentioned, the more obscure its definition becomes.

Classic Long Tail Illustration

The Long Tail phrase often is accompanied by a graph that charts popularity to inventory. In the graph, Amazon’s book sales or Netflix’s movie rentals would be represented along the vertical line while the book or movie ranks are along the horizontal axis. The total volume of low popularity items exceeds the volume of high popularity items. Source: Wikipedia

“It seems like it gets thrown around a lot,” says Neil Strother, analyst at Jupiter Research. “I wonder if it’s really adding to people’s knowledge.” Others say the general concept applies to all sorts of niche items that people might want on their cell phones, from music to photos and video.

Avi Greengart, analyst at Current Analysis, says it’s difficult to make the case for the long tail in the wireless world, where device characteristics such as small screens and limited input capabilities serve as a filter. Digital content sales in the United States are extremely sensitive to carrier deck placement. If a game or ringtone is featured in the “Best Seller” or “Hot” list, it sells. Otherwise, it tends to languish, as consumers are less likely to browse and search for content in the constrained environment of a mobile phone than on a PC with a big screen, full-sized keyboard and a constant broadband connection, he says.

The thing that inevitably comes up when considering long tail content in wireless is the ability for people to actually find it. Putting 10 million applications out there for people to find isn’t necessarily doing them any favors, says Lee Daniels, vice president of consumer product development for Verizon Wireless.

“If they can’t find it, it’s not providing value to them,” he says. The carrier is taking small, calculated steps toward its goal of opening up its network to more off-deck content, but it doesn’t want it to negatively affect its network, by, for example, jamming it up when someone is trying to make a 911 call.

Jeff Kunins, director of carrier services at Tellme, sees at least two long tail challenges and opportunities. Just like on the Web, the majority of the millions of local businesses still have not embraced online advertising – they rely on Yellow Pages and other print media. Despite this, the Web has been able to produce hundreds of billions of dollars in value because of the sheer volume and breadth of searches across all topics of interest, not just local. By contrast, as mobile phones continue to dramatically outpace PCs, mobile users are extremely focused on getting everyday tasks done – so reaching the “long tail” of local businesses is at the crux of making mobile search, mobile applications and advertising successful, he says.

But until the walled gardens come down, it will be difficult for entrepreneurs to invest in breakthrough mobile applications. Until that logjam is broken, it will remain hard for the “long tail” of great applications to reach the “long tail” of otherwise interested consumers, he adds.

Avi Greengart: Tough to make a case for long tail in wireless with small screens and limited input capabilities.	Jeff Kunins: Long tail could be represented in localized applications and immediacy applications.	Adam Guy: Location and personal connection applications will deliver what matters most to customers.	Adam Sexton: There are limits to wireless; the 80/20 rules still applies.

STRETCHING THE TAIL
Adam Guy, analyst at Compete, agrees that real estate in wireless is still at a premium. Those companies promoting off-deck or off-portal content no doubt are hoping that breaking down the walls will lead to a better replication of the online world and provide access to the type of long tail content that people want.

Add location to the wireless puzzle, however, and it gets more interesting. For example, applications like those offered by loopt can connect friends when they’re in close proximity and even share restaurant recommendations. “If you think about your own personal connection to people you know, that’s really long tail stuff,” Guy says.

One of the principles of the long tail is the Internet allows people to find the things that interest them. In the mobile world, that could occur at an airport, where thousands of people might be passing through on a given day, but you want to find – at the time you’re there – the five or 10 people with whom you share interests or connections. “That seems like a classic long tail scenario that only a wireless company can deliver on,” Guy says.

Another example is when you’re looking for a Mexican restaurant; if the phone/network knows where you are, the search becomes more relevant when it returns results based on your location.

MAYBE, MAYBE NOT
Not everyone is convinced the long tail is the way to go. The 80/20 rule still applies, where 10% to 20% of the content makes up 80% of the sales, notes Adam Sexton, chief marketing officer at Groove Mobile. “There are limits to what you can do on mobile,” he says. If too many choices are offered, a musician can get lost in the fray. But spikes, or hits, on the tail are going to sell. “There’s a limit on the long tail, but having said that … people are going to have more access to music than in the past.”

The long tail usually refers to niche items selling better in the aggregate than mainstream items due to the ability of like-minded individuals to use the Internet to find what would otherwise be obscure, Greengart says. It is easier to focus and find obscure subjects/objects online, and there are examples such as companies selling collectibles online that cannot find retail distribution, or Netflix’s use of recommendation engines to propel independent films to modest success. “However, I’m not sure the theory is actually valid; most of the data I’ve seen suggests that the best-selling items online are the same items as offline – even in the aggregate, and even at Netflix,” he says.

eBay turned the Internet into a worldwide garage sale, Strother notes. “I think the long tail is interesting,” allowing some companies to make a business in digital content.

“If they can make a go of it, great, but the business fundamentals don’t change, whether you’re a Mom & Pop grocery store trying to make ends meet or Google or Microsoft … the key measure of success is, are you selling a product or service at a profit? This long tail notion is an interesting one, but does it tell the whole story?”

It might sound like a stretch, but even VoIP companies consider themselves going after the long tail.

“Our market niche is people who want to make international calls with their cell phones,” says Rebtel spokesman Greg Spector. Sure, but how does the company make money offering international phone calls for just pennies? Spector says the company does make a profit on the calls, even at the discounted rates. The company doesn’t require a large staff, and it doesn’t spend millions on storefronts and marketing.

So far, broad commerce is not conducted through mobile phones despite the industry’s attempts to grow the mobile wallet. Ringtones, music and games are available, but as a buying mechanism, the phone still isn’t the first thing most consumers think of using. Voice minutes and text messaging are the dominant products that are bought and sold.

“You can apply long tail more easily to the Internet because you have a broad mix of companies offering services and standard payment practices,” Strother says. “We don’t have multiple industries selling things through the phone yet. That’s the difference I see in the online world and the mobile world, and I do think it’s going to take a little longer than some would like, but that’s sort of the nature of the business.”

The chase is on.