Grabbed from my furl.
The Long Tail is about how the mass market is turning into a million niches. The term refers to the yellow part of the sales chart at left, which shows a standard demand curve that could apply to any industry, from entertainment to services. The vertical axis is sales, the horizontal is products. The red part of the curve is the “hits”, which have dominated our commercial decisions to date. The yellow part is the non-hits, or niches, which I argue in the article will prove equally important in the future now that technology has provided efficient ways to give consumers access to them thanks to the “infnite shelf-space effect” of new distribution mechanisms that break thought the bottlenecks of broadcast and traditional bricks and mortar. The two big points of the Long Tail theory are these: 1) The yellow part potentially extends forever to the right; 2) The area under that line–the market it represents–may become as big as the hits at the left.
Well, for starters the classic definition of economics is “the science of choice under scarcity”. That’s a warning sign right there. From Adam Smith on, economics has focused almost exclusively on behavior within constraints. My college textbook, Gregory Mankiw’s otherwise excellent Principles of Economics, doesn’t mention the word abundance. And for good reason: if you let the scarcity term in most economic equations go to nothing, you get all sorts of divide-by-zero problems. They basically blow up.
Here’s how it works: in a type of power plant called an integrated gasification combined-cycle facility, we change any fossil fuel, including coal, into a superhot gas that is rich in hydrogen – and in the process strip out pollutants like sulfur and mercury. As in a traditional combustion power plant, the heat generates large amounts of electricity; but in this case, the gas byproducts can be pure streams of hydrogen and carbon dioxide.