There are essentially two general classes of technology the will benefit economically from the Long Tail -- aggregators and filterers.Gather up the long tail content, then filter. Help people find what they need.
The aggregators are those web businesses that seek to collect up as much of the Long Tail content as is possible, so as to make their "stores" a one stop shop for content no matter how popular or obscure.
The filterers are those businesses that make it easier to find the content in which we are interested ... The beneficiary of the filtering is the end user and the filterer, not the content owner per se.
I believe that it is difficult to be an aggregator without also being a filterer ... Aggregators ... [must] come up with their own clever filtering mechanisms to help consumers fully appreciate and navigate the breadth of the content they have to offer.
I think it is helpful for venture capitalists and entrepreneurs alike to focus on where the money is in the Tail. The real money is in aggregation and filtering and those will continue to be interesting businesses for the foreseeable future.
Massive selection isn't enough. To make the long tail accessible, irrelevant items should be hidden. Interesting items should be emphasized. Millions of poor choices should be reduced to tens of good ones. The value is in surfacing the gems from the sea of noise.
See also my earlier posts, "Personalization and the long tail" and "Profiting from the long tail".