The theory of the Long Tail is that our culture and economy is
increasingly shifting away from a focus on a relatively small number of
"hits" (mainstream products and markets) at the head of the demand
curve and toward a huge number of niches in the tail. As the costs of
production and distribution fall, especially online, there is now less
need to lump products and consumers into one-size-fits-all containers.
In an era without the constraints of physical shelf space and other
bottlenecks of distribution, narrowly-target goods and services can be
as economically attractive as mainstream fare.
One example of this is the theory's prediction that demand for products not
available in traditional bricks and mortar stores is potentially as big
as for those that are. But the same is true for video not available on
broadcast TV on any given day, and songs not played on radio. In other
words, the potential aggregate size of the many small markets in goods
that don't individually sell well enough for traditional retail and
broadcast distribution may someday rival that of the existing large
market in goods that do cross that economic bar.
The Wikipedia entry on the Long Tail does an excellent job of expanding on this.
