Revisiting the Long Tail Theory as Applied to Ebooks

In a limitless world of digital goods, powerful search and recommendation engines, near-zero marginal cost of digital production, storage and distribution, niche products shall get much more market relevance. "Selling less of more" is part of what the "Long Tail" theory has been preaching.

Does it apply to the creative industries too? And how? Should digital book publishers reduce attention on blockbusters and increase focus on the Long Tail as the source of the most profitable growth? Is there a space for unlimited growth of niche ebooks?