The Deep Niche
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In October 2004, Chris Anderson wrote a seminal article in Wired entitled “The Long Tail,” a graphically rich reinterpretation of the Pareto Principle, (aka, the “80/20 Rule”): Just as 80% of the wealth tends to be held by 20% of a population, likewise 20% of our most favorite clothing tends to get worn 80% of the time.
But Anderson made it clear that the 80/20 rule was based on a world of scarcity, rather than one of abundance like the Web, and the rules may be changing: “If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are.” DVD distributor NetFlix also makes a fifth of its income from low-volume distribution: “The average Blockbuster carries fewer than 3,000 DVDs. Yet a fifth of Netflix rentals are outside its top 3,000 titles.”
At the National Academies Press, about 17% of our income is pretty “long tail-y”: during 2006, out of more than 15,000 items for sale (PDFs, print books, bundles of PDF + print), more than 1,100 items were bought only once, and more than 3,600 items were purchased fewer than 10 times in the year.
Since 1994, the National Academies Press has opened every page of every recent publication to the world. We currently have more than 3,600 books available for free page-by-page browsing, reading, and even printing. Back in 1999, our Website was somewhat akin to today’s Google Book Search and Amazon's "Look Inside the Book,” and in the following years we have improved readability (with HTML instead of page images), added research tools, and provided more public access options throughout the site.
That makes us unusual, but it also makes us a very interesting case study. As the publisher for the National Academy of Sciences, Institute of Medicine, National Academy of Engineering, and National Research Council, we are expected to be self-sustaining via book sales. We have a dual (and paradoxical) mission: maximum dissemination, and self-sustainability.
Part of the importance of the “Long Tail” in business terms is that an incredibly huge audience has opened up for us, online. The NAP site gets more than 1.5 million visitors per month, because we make our material openly available, and consequently we are very well indexed by search engines. Remarkably, the percentage of visitors who actually purchase anything is only around 0.2%—two in a thousand. This vanishingly small conversion rate (of visitor-to-buyer) seems pitiful. But with that tiny fraction of a percentage, we are still able to sell enough publications online to be essentially self-sustaining, because the raw audience is so huge.
There's much to learn from that tiny conversion rate about the breadth of the new audiences, about specialized interests, and about how publishers might take advantage of what I call the “deep niche.”
The most fundamental constant in all our lives is time: We all pass through it, changing our interests, persuasions, enthusiasms, and careers through the many years and seasons in which we live.
On any given day, there's a huge number of men worldwide who for the first time in their lives are interested in Viagra, just as there is a minuscule percentage of the entire Web world who are interested in the aerodynamics of the Frisbee,just for this month. In an always-on broadband world of information abundance, that means that these people can explore these new interests instantly.
This is the “deep niche”: the percentage of people who, on any given day, because of a passing fancy, or a new career, or a new experience, are interested in (and potentially willing to pay for) affordable high-quality content.
Eventually, when every adult person is online (say, three billion people, a third of whom speak English), that deep niche audience will be a continuous, rolling market of special interests. On any given Wednesday, if 0.001%—one in a hundred thousand—of the English-speaking Web includes people who are newly interested in Elizabethan costumery, that’s still 10,000 people poking around online that day. Perhaps 0.2% of them—or 20—might be willing to purchase a high-value scholarly publication (with illustrations) on that topic.
Even if only 0.01% of them actually make a purchase—one in ten thousand—that’s still one sale per Wednesday, and one sale a day, while not a bestseller, is still enough to be a business. If it were two or three a day, for most publications and publishers, life would be good.
The deep niche became clear to me during one of my “eBay enthusiasms.” Over the last few years I've had a handful of three-week periods where I was suddenly interested in something on eBay. One focus was pre-1900 shipping trunks; another, unusual stringed instruments; another, pre-1930 agricultural encyclopedias; another, old hand tools. Each of these was driven by some life event or new interest. None of them lasted more than a few weeks, and each resulted in my purchase of several hundred dollars of stuff through eBay. Each of them also entailed a lot of Web research to get the background on the stuff I briefly cared deeply about.
There are many more times when I’ve had a deep (but fleeting) interest in some specific topic: 1954 Plymouth Savoys, vortex tubes, heritage fruit trees, rising-sea effects on coastal development. I found a lot of great information online.
And in most of these enthusiasms, whether physical or virtual, I would have paid (and in many cases did pay) to get an expertly written, illustrated, quality publication that helped me understand my new topic of interest.
I doubt I'm alone in this, now that we've moved into the age of content abundance brought on by the broadband Web. Because I can find information on anything online, I do, which leads to other related interests.
I now can follow those interests—these micro-hobbies—without hindrance. Though I love and still use bookstores and libraries, I no longer need them. Mostly, to follow my sequential enthusiasms, I just use the Web.
If I'm not an anomaly, then what I represent is a set of opportunities for digital and physical sales. It’s likely I represent what no doubt thousands of other people worldwide are also interested in, on that Wednesday.
This reality should be driving publishers’ thinking far more than it currently does. Traditionally, a book is published, and it's marketed while it's "fresh." Publishers historically think of a six-month to three-year life cycle for a new publication. Bookstores generally return books to the publisher within six months, because of the premium on shelf space, and libraries rarely purchase “backlist.” Publishers implicitly presume that the "life cycle" of interest in a publication is constrained by these realities, and is driven by our promotions and the book’s new presence in the marketplace.
But things are different in the always-on Web. I may stumble upon a reference to a 2002 blog entry that fits my current enthusiasm. It links to a 1998 publication that exactly fits my interest. I sample it, and then I purchase it, independent of space ads, reviews, or other press promotion. If I'm in the midst of an enthusiasm, the search engines become my map to information, which may lead me to knowledge.
Google Book Search, Microsoft Live Book Search, Amazon Look Inside, and the Open Content Alliance are all examples of new finding aids that may lead me to a purchasable book, quite out of time, independent of publishing seasons and schedules.
Just as a few lucky publishers are able to sell, semester after semester, some key freshman literature texts nationwide (because every freshman must read Catcher in the Rye),or are lucky enough to publish Modern Bride (of keen interest to a continuously rolling set of temporarily interested customers), so US publishers may all soon be lucky to be able to offer, to a worldwide audience of a billion, our abstruse, specialized, even scholarly monographs, because everyday, a few thousands are for the first time enthusiastic about the topic.
My current favorite example is the 1997 NAP report, Toxicologic Assessment of the Army's Zinc Cadmium Sulfide Dispersion Tests — certainly no barn burner, and ten years old. In 2006, that report had 11,500 online visitors, who browsed approximately four book pages each. Of those, four bought a print book at $45, and two bought the PDF at $37.50 online. So 0.05% of the visitors to that particular book purchased it, even though they could read every page free online. On an average day, 31 people visited that online book — people who for some reason were interested in the topic. The six online purchases were dispersed pretty evenly over the year. The online sales of this book represent only 0.0125% of our overall online income, and the 11,500 visitors represents only 0.06% of our overall visitors — but we sold six ten-year-old books to them last year.
Admittedly, this is an abstruse example, and there’s not a lot of competing information out there on zinc calcium sulfide dispersion tests. Every book is unique, and patterns are hard to draw. But these numbers demonstrate the importance of a huge Web audience and the deep niche.
The National Academies Press is unusual in its openness model; for us, this openness is a reasonable business strategy. It is impossible to afford promotion on tiny-market books like the one about zinc calcium sulfide, or continuously promote all 3,600 available reports in a multitude of fields. But if we are open to the search engines and the customers, then interested readers can find us: the content becomes its own best advertisement for a rolling “deep niche” of potential customers.
To be found at the time of temporary interest by deep niche members, each one a potential purchaser, all a publisher needs to do is provide sufficient access to its content to be attractive to the potential audience, via Google and Microsoft, or also via its own site, like we do at the National Academies Press.
The deep niche—the rolling “interest tribe” comprised of that day's enthusiastic, new audience—is something that publishers must acknowledge, and accommodate in our business plans, if we are to sustain ourselves. The Web is not merely a threat to publishers—it can also be the means to connect to the people we most want to reach: the interested reader.
In 2002 Michael Jensen was appointed Director of Web Communications for the National Academies. He remains Director of Publishing Technologies at the National Academies Press, which makes more than 3600 books (more than 600,000 pages) from the National Academy of Sciences, the National Academy of Engineering, the Institute of Medicine, and the National Research Council fully browsable and searchable online for free (www.nap.edu). This site receives more than 1.5 million visitors per month, and boasts of some of the most advanced search and discovery tools available on any publisher's site, most of which were initially developed by Mr. Jensen. In 2001, Michael Jensen received the National Academies' "President's Award," its highest staff honor. For more about the author, please visit http://www.nap.edu/staff/mjensen/.