Growth, Popularity, and the Long Tail: Evidence from Digital Markets

61 Pages Posted: 15 Oct 2019

See all articles by Gil Appel

Gil Appel

University of Southern California - Marshall School of Business

Barak Libai

Interdisciplinary Center (IDC) Herzliyah - Adelson School of Entrepreneuship

Eitan Muller

New York University (NYU) - Department of Marketing; Interdisciplinary Center (IDC) Herzliyah

Date Written: October 2019

Abstract

The fact that the adoption rate of successful innovations is bell-shaped (cumulative S-shaped) is considered the basis for most insights and analyses of new product marketing. However, these insights have been largely based on the growth of popular durables and services. In contrast, contemporary digitized markets are largely comprised of a long tail of low-popularity products for which we have little evidence on which to base the expected shape of growth. We study the growth of close to 100,000 digital products in two markets; with product size ranging from 50 downloads, to hundreds of millions. We find that across various product categories, while indeed bell-shaped growth is the clear majority among the very popular products, for lower-popularity products, it becomes a minority, with growth dominated by an exponential-like decline (“slide”), or a combination of the first two, i.e., a slide and a bell (S&B). We examine the possible explanations for this phenomenon in the markets we analyze, and discuss some of the wide-ranging implications of our understanding of new product marketing in long-tail markets.

Keywords: diffusion of innovations, digital products, long tail, product life cycle, social influence

Suggested Citation

Appel, Gil and Libai, Barak and Muller, Eitan, Growth, Popularity, and the Long Tail: Evidence from Digital Markets (October 2019). NYU Stern School of Business. Available at SSRN: https://ssrn.com/abstract=3464393 or http://dx.doi.org/10.2139/ssrn.3464393

Gil Appel (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Barak Libai

Interdisciplinary Center (IDC) Herzliyah - Adelson School of Entrepreneuship ( email )

P.O. Box 167
Herzliya, 46150
Israel

Eitan Muller

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

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