I’m reading Chris Anderson’s The Long Tail. If you’re not familiar with the concept or the book, the “long tail” refers to an economic graph that begins with few high selling hits and flattens out (but never to zero) to many low selling niches. The book goes into detail of how digital distribution and filtering pushes consumer demand into the large market of the long tail. Anderson’s examples of business and marketing models that succeed and fail in this new territory are really sparking my mind with new business ideas. Who knew I’d ever read an economics book.
In one niche example, Anderson nutshells the audiophile electronics market refusal to cater to the lowest common denominator [p 118]:
If you’re interested in audiophile stereo equipment, the finest gear is not going to be among the top-sellers at Best Buy. It will be too expensive, too complicated, and too hard to sell to the average customer. Instead, it’s going to be available at a specialist, and in overall sales ranking will be far down the Tail. Because this gear is so right for the audiophiles, it’s probably not right for people with less focused interests. Niche products are, by definition, not for everyone.
I don’t know if I agree with “too complicated” if he is talking about operation, most audiophile class components are pared down to their primary function (gain and source switching only for a stereo pre-amp). What may be “too complicated” is the appreciation of design that services sonic quality over jazz DSPs. He is right about the “too hard to sell” bit, though.
If you want to know more about the economics of the Long Tail, check out its excellent wiki.