![]() The Wharton researchers find that the Long Tail effect holds true in some cases, but when factoring in expanding product variety and consumer demand, mass appeal products retain their importance. The Long Tail theory suggests that, as the Internet makes distribution easier - and uses state-of-the-art recommendation systems that allows consumers to become aware of more obscure products - demand will shift from the most popular products at the “head” of a demand curve - as charted on an xy axis - to the aggregate power of a long “tail” made up of demand for many different niche products. Netflix made its data available as part of a $1 million prize competition to encourage the development of new ways that will improve its ability to introduce customers to lesser-known titles they might find appealing. Tan pull information from the movie rental company Netflix to explore consumer demand for smash hits and lesser-known films. In a working paper titled, “Is Tom Cruise Threatened? Using Netflix Prize Data to Examine the Long Tail of Electronic Commerce,”Wharton Operations and Information Management professor Serguei Netessine and doctoral student Tom F. Using data on movie-rating patterns, new Wharton research challenges current thinking on the Long Tail effect - a widely publicized theory that suggests the Internet drives demand away from hit products with mass appeal, and directs that demand to more obscure niche offerings.
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