The Longtail Theory is that our culture and economy is increasingly shifting away from a relatively small number of 'hits' (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare.
Examples of Longtail Theory:The Long Tail has grown longer over time, with niche books accounting for a larger share of total sales. Their analysis suggest that by 2008, niche books account for 36.7% of Amazon’s sales and the consumer surplus generated by niche books has increased at least fivefold from 2000 to 2008. Some of the most successful Internet businesses have leveraged the Long Tail as part of their businesses. Examples include eBay (auctions), Yahoo! and Google (web search), Amazon(retail) and iTunes Store (music and podcasts)
