Living off the long tail

A long tail

Photo credit: aposematic herpetologist

What is the long tail

In his original post and the following book The Long Tail Chris Anderson explains the modern economic phenomenon of the long tail. Selling goods through the web, particularly digital goods is offering the consumer an alternative to the hit driven culture of the past:

Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.

The basic premise is that in the past a shop could only carry so much stock. In a physical shop space is limited and also costs rent. So a physical retailer is forced to carry only the best selling items.

With an online shop like Amazon they are able to carry a massively larger choice of books than a shop on the highstreet. Chris's research showed:

The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon's book sales come from outside its top 130,000 titles.

An individual book not in the top titles may only sell 1 copy a year, but for Amazon the huge number of books selling one copy a year add up. These books are the long tail of Amazon's sales and more than half of their sales fall into this tail.

Long tail graph

With an online app store like Apples iPhone App Store the storage cost of bits is cheap. There are currently over 500,000 iPhone apps. The majority of these will fall into the long tail. An app in the long tail may only sell one copy a year, but if the Amazon figures hold true here then Apple will make most of its app sale profits from the combined sales of these long tail apps.

Strategies for living off the long tail

If you own the tail, then the long tail is brilliant for your business. You should endeavour to do whatever you can to extend the length of your tail by increasing the items you stock and making them findable to your customers. However we can't all own a tail and many of us will find our selves selling products that fall into the tail of a big online retailer. It'd be nice if our product was a hit in the fat end of the tail, but it is more likely that it will fall into the long thin part of the tail.

I've been thinking about this a lot since I created Font Picker and started selling it in the Mac App Store. After my app fell off the new apps page my sales dropped and levelled out. On average I now sell 2 copies a day and this makes me about £3.60. Assuming this continues this will give me an annual income of £1.314. I don't have any sales figures for Apple's other apps, but I suspect this puts me somewhere in the long tail.

I'm very happy to be where I am in the tail and will be very happy if by the end of the year those sales numbers continue. It is a nice supplemental income to the money I earn from freelancing. I really enjoyed building my own app and I'd like to spend more time doing it. If I want to make that a reality I need to look at the different ways I can live off the long tail and increase my share of it to a level that I can afford all the things I've grown to enjoy, like food and shelter.

Thinking in terms of the tail there are two ways to increase my revenue from selling apps:

  • Move up the tail - increase sales of my app
  • Occupy a wider section of the tail - sell many apps

I think it's going to take a combination of these two ways for me to move towards making a living off app sales.

If my target is to make £13,000 a year from selling my own apps, what would I need to do? The chance of me increasing my current sales to be ten times higher is slim, and making 9 other apps with similar sales would take me a long time.

Very roughly, and assuming all my apps are the same price, here are my options to reach my £13,000 goal:

Pie charts showing options to reach goal

  • 1 app selling 20 copies a day
  • 2 apps selling 10 copies a day
  • 4 apps selling 5 copies a day
  • 5 apps selling 4 copies a day
  • 10 apps selling 2 copies a day

Move up the tail - increase sales

There are many methods of increasing sales, but the strategy I use will depend on how much time I can afford to put in, and that will depend on how many other apps I'm developing and maintaining. If I'm not aiming for a hit then a number of low key, low risk efforts will hopefully get me the small increase in sales I'm looking for. Here are some ideas that I'm hoping will increase my sales by small amounts.

  • Localise - App stores offer you the chance to sell to a global market. Most of my sales are from English speaking countries. I've just finished adding a Spanish translation to Font Picker as a trial to see what effect this will have on sales. As there are more Spanish speakers in the world that English speakers (not taking into account people's second languages) I'm hopeful it will have a noticeable effect.
  • Listen and act on feedback - I purposefully kept Font Picker small so I didn't spend ages making an app people didn't want. People's feedback will inspire my plan for how the app evolves. The trick is adding functionality that increases the apeal and satusfaction with the app, while still keeping the app simple to use and with a clear focused purpose.
  • Increase the price - If I increased the price and continued to sell the same number then profits will increase. I don't think I could increase my price without losing sales, so I'm not planning on doing this.
  • Drop the price - If I halved the price, would I sell twice as many, or more? A possible way to see the effects of lower pricing would be to have a sale day. If I were being purely scientific I would not advertise the fact that this was a lower than normal price. If I wanted to bump up the sales then I'd make it clear this was a sale price that was only available for a limited period.
  • Marketing - A key part of marketing is knowing your target audience. I've been trying to increase awareness of Font Picker among typographically aware designers by taking part in #FontSunday where people share pictures of fonts in the wild based on a weekly theme. I've been helping by compiling pinterest boards of people's contributions. I'm not sure if this is helping sales, but I enjoy it, so either way I'm winning.
  • Market to a different audience - What if you're wrong about your target market. I was talking with a friend; I was talking about Font Picker and she was talking about her upcoming wedding. She said she wished she'd been able to use Font Picker to choose the font to use on her invitations. So perhaps there's some scope for Font Picker to be a useful tool for people designing their own wedding invitations. There are probably more people designing their own wedding invitations out there than that are professional designers.
  • Review sites - I've already had a positive review from Paul Boag which is great. This review led to a noticeable peak in sales, but only for a day. I need to investigate app review sites and see if there is a way of submitting your app. At the moment though I'd rather invest my time in things that improve the app.
  • Social and sharing - Hardly a day goes by without someone shoehorning social stuff where it's probably not needed. If there is a genuine use case then sharing features can make an app more useful and also be a form of marketing for your app. If it's not useful then people will not share and it might put them off your app.
  • Word of mouth - I like this one, because if I make good apps it should just happen naturally. Font Picker has got some good reviews and although I've got no proof I'd like to think that word of mouth has helped my sales stay steady since I fell off the new apps page. I don't know how to measure word of mouth, but perhaps with more satisfied customers downloading the app every day the word of mouth effect will increase
  • Offer a free version - Making someone pay any amount of money for your product is a barrier to getting them to use it. Freemium works on the principle that if you remove the cost barrier you can get far more users and a percentage of those will convert to your paid service. If this has worked, more people will become paying customers than would have used your service if there was no free version. There is a free online version of Font Picker and it was that version's success that made me think it would be a good idea to make an improved native pay for version. I need to investigate the relationship between users of both apps. I also need to improve the free version as I'm worried it might put people off the native version and I probably need to add some in app promotions to the paid version. I like free and I'd like to find a way to make it work in my products.
  • Offer something for free - You don't have to give your app away. There are other things of value I could give away that might help promote my apps. If you can create content that relates to your app and would appeal to your target market, then giving that away may increase awareness of your app. This post is an example of that. I hope that you find it interesting, and my secret hope is that you might also be looking for a nice tool that makes choosing fonts easier. Most of you won't be, but perhaps you have a friend who is. At the very least you'll remember Font Picker, so awareness has increased.

Occupy a wider section of the tail - sell many apps

I've managed to create a two sales a day product, but can I repeat that? Font Picker was based on a successful free online tool that gets around 3000 visitors a month. I've made quite a few free online tools and Font Picker is the only one to get anywhere near that many visitors. I've got some ideas in my Ideas Book that I'm excited about, so lets look at some strategies that will help me choose ones that are more likely to be successful:

  • Work with your existing target audience - People are finding my current app and hopefully they like it. An existing customer is more likely to buy a different product from you than someone you have no existing relationship with. So an app idea that would appeal to my current app's target audience has more chance of also being successful.
  • LEAN scatter gun approach - The truth is you don't know which apps will be successful. So you could use LEAN principles to deliver lots of apps quickly then focus your efforts on improving the ones that are most successful. The key to getting this right is to get your minimal viable product offering right and to keep the quality high. Having lots of sub viable products in your portfolio will damage your reputation. You also need to iterate quickly to improve those products.
  • Test a market with free content - A really LEAN way to test a market with a minimal viable product is if the MVP is not actually an app. This won't work with all app ideas, but if you see a certain type of content as being related to your app then you could create some of this content and offer it for free. This is only effective if creating the content will take less time than creating a MVP app. If it does then this could offer a way to test if there is a market and some of your assumptions about what they want.
  • Test early - As a developer it's easy to get stuck in a bubble of your own ideas. Just because you're making your own app doesn't mean you shouldn't ask for feedback. The earlier you can get feedback on your ideas the earlier you will know where to focus your efforts.
  • Split your product up - I bought the Adobe Creative Suite CS4 several years ago for a large sum of money. The Adobe Creative Suite is everything and the kitchen sink with a price tag to match. Every time a new version comes out I look at the new features and try to decide if it's worth the upgrade fee. I only want some of the new features and up till now it hasn't been worth the massive upgrade fee. If I could pay individually for the features I wanted then perhaps it would be worth the money. In the app store upgrades are offered free. If a new version offers substantially new features then you could make it a new product in the store. When you bought software from the store this was the way things worked, but app stores are changing people's expectations. They expect free updates. In app purchases offer a new way to upgrade your app with new functionality. It allows you to keep your app cheap, and also widens your share of the tail. Deciding what functionality will be core and what could be in an in app purchase is a difficult ballance and what that will require some thought.
  • Create versions for multiple platforms - There are many desktop platforms, there are many mobile platforms and there is the web. As more if these get stores there is more opportunity to increase the reach of your idea.

Summing up

These are all just ideas at the moment. As I put them into practice I'll try and blog about how successful they've been. App stores offer an easy route to market for anyone with the skills to make software. That doesn't mean we're all going to create hits and move to Barbados living off our new found wealth. Most of us will need to deal with the realities of being part of the long tail.