A few years ago, most people were watching the same popular shows on traditional channels. Nowadays, we have streaming platforms like Netflix, which recommends a mix of popular titles and niche content based on your personal preferences. Personally, I enjoy crime stories, and I noticed the recent hype around the true crime documentary “Unknown Number: The High School Catfish“. It turned into a huge success, showing that Netflix can make even a crime documentary into a global hit.
What makes Netflix an interesting platform is that it doesn’t only focus on these big successes. It also offers smaller series and films that might not reach large audiences. This balance of popular content and niche options shows the idea of the long-tail strategy. The long-tail refers to a distribution model where content is divided between the “head,” which represents widely popular titles, and the “tail,” which represents niche content (Lozić et al., 2022).
Popular titles like “Stranger Things” or “Unknown Number” bring in a lot of views, but when you add up all the smaller shows, they also make up a large part of Netflix’s revenue. Research shows that about half of its revenue comes from very popular content, while the other half comes from niche products. This goes against the traditional 80/20 rule where most revenue comes from a small group of hits (Joonas et al., 2023).
In class, we discussed that digital platforms don’t have the same limits as a regular retail shop. A shop could only stock the most popular titles, but Netflix can offer thousands at once. This “unlimited shelf space” is one of the biggest advantages of online platforms. In fact, experts describe the future of online business as “selling less of more,” meaning that a wide variety of smaller niche products can together generate significant revenue (Rabinovich et al., 2010).
I find this both exciting and a bit concerning. On one side, I like that I can watch a major crime documentary like Unknown Number and also discover smaller shows. On the other side, I wonder if the recommendations really help me explore new genres, or if they just keep me inside my crime bubble.
References:
- Lozić, J., Milković, M., & Čiković, K. F. (2022). The impact of the long tail economy on the business result of the digital platform: The case of spotify and match group. https://www.econstor.eu/handle/10419/281910
- Joonas, K., Mahfouz, A. Y., & Hayes, R. A. (2023). Strategy for growth and market Leadership: the Netflix case. AIMS International Journal of Management, 17(2), 87–102. https://doi.org/10.26573/2023.17.2.2
- Rabinovich, E., Sinha, R., & Laseter, T. (2010). Unlimited shelf space in Internet supply chains: Treasure trove or wasteland? Journal of Operations Management, 29(4), 305–317. https://doi.org/10.1016/j.jom.2010.07.002
