Long Tail Theory Validity On Secondary Cultural Goods Market

The following study is focused on the application of the long tail theory by Chris Anderson on the secondary market of cultural goods. The aim of the research was to investigate whether the original theory is completely valid on secondary cultural goods market or whether there are differences between Anderson’s results, which were based on literature and music sales data collected from primary market online retailers like Amazon, iTunes, etc., and analogous research based on data from secondary market.Design/methodology/approach: Our data set consists of past auctions data collected from the online marketplace eBay, specifically from British eBay UK and German eBay DE. We followed the original methodology to find out the differences. The research was complemented by the correlation analysis of prices, sales and overall popularity as well as by examination of the historical prices progress.Findings: The application of the original methodology on the data from the secondary market resulted in similar tail shape, which basically confirmed the validity of the theory, however with significantly larger head part and other differences. Further examination revealed the fact that it is not the niche products, but rather the "mainstream" products that dominate the final sales. The correlation analysis of sales and prices also revealed strong non-linear dependence between price and quantity of sold items. Examination of the past price progress of selected group of items confirmed that slowly rising, but still limited supply creates a concretely defined market part that provides both investment and entrepreneurship opportunities.Research/practical implications: The paper provides implications for further research of the secondary cultural goods market. As for practical implications, the paper defines a concrete part of the secondary market that provides both investment and entrepreneurship opportunities. Originality/value: This paper fulfils the need to study how the differences between primary and secondary market affects demand, consumer behaviour and subsequently final sales structure.