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

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