NEW YORK (Reuters) - Fans of the popular US TV show "Desperate Housewives" may be dying to discuss last night's episode, but the odds are that their friends and co-workers watched something else.As technology makes production, storage and distribution of entertainment easier, choices are abounding, and so are audiences for alternatives to hit TV shows -- and songs, books or movies.

While a cooking program or a nature documentary is unlikely to pose a challenge to "Desperate Housewives," in the aggregate, niche markets are becoming a force to be reckoned with in a number of industries.

Chris Anderson, the editor in chief of Wired Magazine, made these points in an October 2004 article for his magazine and expanded them into a book, "The Long Tail," published in July.

The title refers to "long-tailed distribution," a statistical term describing how a typical demand curve starts with a large "head" — the hits — and trails off into a long "tail" — everything else.

Conventional wisdom says that the top 20 percent of a company's products account for 80 percent of sales. But Anderson notes that more people are dipping into esoteric fare as the Internet and other technology make it easier to find, produce and distribute.

Both the book and article have prompted much discussion on the extent and impact of the tail.

"The most common misunderstanding of the theory is that it predicts the hits will die, and it doesn't," Anderson told Reuters. "It predicts the monopoly of hits is over."

The long tail is at work in Netflix Inc., a new-economy company that rents DVDs to its monthly subscribers. The company has said that it moves more than 95 percent of its 65,000 titles at least once per quarter.

Another example is RealNetworks Inc.'s Rhapsody, a subscription-based digital music service that offers 3 million tracks from well over 100,000 artists, 90 percent of whom have found an audience, however small.

Similarly, Canadian vanity publisher Lulu produces books for small audiences.

Anderson initially coined the phrase "long tail" to describe the new economics of media and entertainment. He argues, however, that the theory applies to numerous other businesses, including appliances, foods, toys and even employment, saying offshoring is "the long tail of labour".

"Demand is shifting the down the tail," Anderson said. "Sometimes that means from hits to niches, sometimes that means from new releases to back catalogue. In all cases, it's clearly a trend."

In some cases, the effect has been quite dramatic.

As recently as 20 years ago, for example, one out of three US television households tuned into "The Bill Cosby Show," according to Nielsen Media Research. Enter the Internet and a proliferation of cable networks, which left fewer than one out of five households watching the Tuesday night "American Idol," the top-rated series for 2005-2006.

In the music business, a hit is also less of a hit these days, now that a vast selection of material is available for downloading.

"You don't have as many albums coming to market that just dominate," said Geoff Mayfield, director of charts at trade magazine Billboard. Under those circumstances, niche markets become more important, he added.

But Mayfield wonders if the apparent slowdown in sales of top albums stems from the rise of digital delivery systems or whether the lack of a release with mass appeal was also a factor.

"We're only a couple of years removed from when Usher brought out an album that sold 8 million copies in a year," he said. "If his album had come out this year instead of two years ago, it would be fascinating to see what numbers it would have done."

Others say the long tail model is more limited than Anderson believes.

"My fear is that it is being applied incorrectly across industries and businesses where it will undoubtedly cause disruption in a bad way ... or cause them to lose focus," said Ben McConnell, co-author of the book "Citizen Marketers."

Anderson said the applicability of the long tail theory varied from market to market.

"I don't know of any examples where people have ripped up their business plan, built it around the long tail and then paid the price for it," he said. "Typically they tend to experiment on the margins, which is the right way to do it."

His favourite application is Anheuser-Busch Cos. Inc.'s launch last year of Long Tail Libations, a subsidiary that aims to find niche alcohol products to supplement beer sales.

"It made my week," Anderson said.

Wall Street Journal columnist Lee Gomes challenged some of Anderson's interpretations of data that showed a weakening of the hits and a strengthening of niche fare.

On his blog devoted to long tail topics, Anderson wrote that trying to define "head" and "tail" in percentage terms was meaningless in a market with unlimited inventory.

"My main point — that the Long Tail, both in terms of content and products available and the demand for them, is big and getting bigger — isn't really disputed by any of this," he wrote.

In book publishing, data shows that the importance of scoring a "hit" is as important as ever, said Robert Frank, co-author of the 1995 book "The Winner-Take-All Society". Still, he agreed that a market had emerged for releases that retailers once deemed too obscure to stock. He plans to assign Anderson's Wired article to his microeconomics class at Cornell University's Johnson Graduate School of Management next year.

For its part, the book vaulted onto the best-seller lists, including The New York Times' for hardcover non-fiction, where it spent five weeks, and The Wall Street Journal's for business books, where it remained for 2 1/2 months. According to publisher Hyperion, a unit of Walt Disney Co., 200,000 copies are in print.

"The irony of my book on niches becoming a best seller is not lost to me," said Anderson.