Tuesday, April 27, 2010

The Long Tail - It Works If You Work It

When Chris Anderson's book "The Long Tail" came out in 2006, it was immediately acclaimed as a brilliant new theory of how the new digital economy worked. By 2007 economists everywhere where blasting the theory as a false bill of goods, one that really didn't approximate the new economy at all. I've posted on this previously on my Big Picture blog back in May of 2009 (before the Music 3.0 blog that you're now reading was instituted), but I think it's time to revisit the subject since I recently spotted a thread on the CD Baby forum after a podcast by Chris that was pretty dismissive of his premise.

For those of you not familiar with The Long Tail theory as it applies to music, it states that a consumer will buy a lot more songs in an artist's catalog than he will of his hits if only the catalog songs were available, the catalog being "the long tail." In other words, if you get someone to come to a site to buy your latest hit, they'll stick around and buy even more of your older releases too.

Then came a study by an unnamed music service (speculation is it was the iTunes store) in early 2009  that stated that of their 12 million songs, 9 million didn't sell a single copy in the previous year, which flies against the wind of The Long Tail theory. At this point, economists who never bought the theory in the first place danced on the Long Tail's grave.

But wait. There's more to the theory than just having the catalog available for purchase. After having studied the Long Tail theory in depth for my Music 3.0 book, I've come to the conclusion that this study and most every other doesn't take into account 2 of the theory's 3 main points. These are:
  • in order for people to purchase items in the Long Tail, the items must be easy to find and easily available.
  • the items in the Long Tail must be priced attractively, something that iTunes or any other digital service hasn't only recently begun to do.
So you have to have all three items for the Long Tail to work. Before the naysayers dismiss this theory, they must give all facets of it a chance work. With variable pricing now in use by most digital stores, we should soon see how price affects sales. But even with the right pricing, it's that "easy to find" part that's really at the heart of all the debate. Only time will tell how accurate the Long Tail theory really is.
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2 comments:

Ninetwelve said...

I remember buying Nirvana's Incesticide (a comp of demos and early works) after hearing Nevermind and In Utero (their two major albums) back to back because the album was under 10 dollars and the two hit-filled albums I'd heard were great.

As a consumer I can agree- I didn't have to look for the CD (it was right there in the store) it was priced to move (it had no hits) and the mainstream songs they wrote had drawn me in. I'd never have searched out their early works or demos as a 14 year old. But since it was there- damned if I didn't buy it!

Marcus Taylor said...

Nice post Bobby!

I think this trend will have definitely been the case several years ago in the album age, I imagine there would be larger polarity nowadays between the artists with die hard fan bases who buy song released and normal artists whos fans just download the single track..

Following you on Twitter now :)
Look forward to more great posts!

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