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'Long Tail' May Not Wag the Web Just Yet
Carl Bialik from WSJ writes "Expanding on an article he wrote in 2004 (and discussed on Slashdot), Wired magazine editor Chris Anderson argues in his best-seller 'The Long Tail' that the web is changing commerce from a hit-driven business to one focused on niches. But Wall Street Journal columnist Lee Gomes questions Anderson's data, and adds, 'I don't think things are changing as much as he does.' Gomes writes, 'At Apple's iTunes, one person who has seen the data -- which Apple doesn't disclose -- said sales "closely track Billboard. It's a hits business. The data tend to refute 'The Long Tail.' " ' On his blog, Anderson responds that Gomes 'stumbles over statistics and more, and in the end simply makes a muddle of what might have been an interesting debate over the magnitude of the Long Tail effect.'"
The web has FAILED!
Amazon doesn't keep their sales rankings private. There is clearly an element of hits ("best sellers") and long tail (everything else that isn't new). I've seen books from the 90s go from the 500,000s sales rank to the 1,000,000s range and back over the course of a year.
I don't see how having 3 million songs could not change everything. Even a good record store will only have a few thousand different CDs. Naturally the most popular will match the top 40 or whatnot, but there are millions of extra choices that will sell every now and then. As it grows to 30 million, we can expect the long tail to kick in more and more.
Man, you really need that seminar!
Part of the problem is, of course, advertising.
The biggest sellers are always the most heavily advertised/talked about.
How do you advertise the other ~90% of your catalog?
Hint: You can't. Not in any specific way.
[Fuck Beta]
o0t!
Mr. Anderson told me in an email...
Mr. Anderson writes that as things move online....
I was thus a little surprised when Mr. Anderson told me that he didn't have any examples...
Mr. Anderson told me the lack of an example of misses...
By Mr. Anderson's calculation, 25% of Amazon's sales are from its tail...
My name...is NEO!
I judt got a nre Kinesis keybiartf so please excusr ant egregiou typos.
> [...] sales "closely track Billboard."
Right, but isn't that the point of the long tail? If Dan Brown sells a bazillion copies of "Da Vinci Code" and I sell 500 copies of PMD Applied, we're both happy since we're meeting the expectations that we budgeted for. Of course, he's then a billionaire, whereas I've still got my office in the laundry room, but, er, anyhow.
The Army reading list
The long tail is supposedly the collective worth of the niche markets. It may add up to a lot more than the mainstream market, but I believe the tail is naturally distributed among the smaller, specialized suppliers. iTunes can potentially offer to cater to those niche markets, but would someone go to a popular music service to purchase his unique and less popular music?
The sum of the unpopular music sold, or niche commodity for that matter, may be larger than the sum of popular music sold. Whether or not that's the case is not important to big business. They see in terms of numbers of units sold, and increase the supply (or marketing, or front page links) of the popular items. Any way you slice it, if you want to cater to the long tail, you're going to have to split your resources. And that might not make business sense.
Much of what I look for: Jethro Tull, German Technopop, ... isn't on iTMS. So, I can't "contribute" my datapoints for the long tail since they're not there to buy. So, the hits are snapped up, but I end up trying to find stuff and failing most of the time.
Companies should recall that boomers still have a whole lot of money, and iTMS represents a great way to cherrypick songs. Until I start finding what I'm looking for, which was QUITE common "back then", they're only in the mid-tail, not the long part.
It seems to me that the only time you're going to see an obscure product selling better on the web is when it's on a page that's focused on a niche. This is just because most web sites with a large stock make it hard to find quality niche products. You really have to dig to find gems sometimes; and digging isn't what folks seem to do a lot of on the web unless the product's expensive or the digging is fun to do.
A music example is electronic dance music. I don't go to iTunes for this stuff, because all the major retailers have extremely limited stock, and the stuff they have is all mixes and it's usually crappy "anthem" tunes. But I've found websites like etn.fm that play EDM I do like, and a store (beatport.com) that sells it, so when I'm looking for EDM, I'll check out those sites for what's best in my nice. But there's still the "hit effect" in place, so to speak; I'm far more likely to check out the popular EDM in play.
If people master a search method that allows you to regularly find what you consider "good", that would probably change the "hit effect". But we're talking about a search tool that can understand people's opinions and current emotional state. I doubt we're going find that anytime soon. Though I'm sure Google's trying.
It is possible with items that take no physical space (music on your iPod or NetFlix rentals), but not so with anything else.
For items that take physical space, the limitation will be the space available to the average consumer.
If 100 titles account for 90% of your sales and you have 1,000 titles that account for the other 10%, adding 10,000 titles will just give people 11,100 options to take up their limited space. If they have space for 100 items, then most of them will be focusing on the same top 100.
On his blog, Anderson responds that Gomes 'stumbles over statistics and more, and in the end simply makes a muddle of what might have been an interesting debate over the magnitude of the Long Tail effect.
In other words: "Gnomes is using math to prove that my theory is shit. Too bad people won't just let me live in my private own deluded world."
If you don't understand profit, you probably shouldn't write at the Wall Street Journal. Profit = revenue - cost.
It seems that Mr. Anderson's book (I RTFA, but not the book) claims that higher sales in the tail will increase the profit of the tail and this will change the economics of the web. This doesn't make much sense to me, and the article rightly points out that there is not that much interest in the tail.
But that's not the point. The point is that to stock "tail items" (niche items) in a brick-and-mortar store COSTS a lot of money. It costs money in terms of the hit-items you can't stock because you've got limited inventory space (opportunity cost at work). But the cost of stocking niche items digitally is far, far less. The promise of profit from the tail is not based on increased revenue as much as it is on decreased cost.
Take the example of Apple's iTunes sales. Even if they do closely track Billboard sales, this doesn't change the fact that Apple is profiting MORE from their tail items than a brick-and-mortar store would be.
It seems as though both of these guys are missing the point: the promise of the tail is not in increased revenue, but in decreased cost.
-stormin
The Southern Baptist Convention has creationism. On Slashdot, we have porn.
Agent Smith: Did you know that the first internet was designed to be a perfect online experience? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program. Entire fortunes were lost. Some believed we lacked the programming language to describe your perfect internet. But I believe that, as a species, human beings define their online persona through suffering and misery. The perfect internet was a dream that your primitive cerebrum kept trying to wake up from. Which is why Internet 2.0 was redesigned to this: the peak of your civilization.
He who knows best knows how little he knows. - Thomas Jefferson
For instance, did he look at the amplification of the hits relative to the niche markets? For instance, if a hit sells 100x as many songs as a niche piece of music before iTunes, and the hit sells 2x as much but the niche sells 50x as much, the hit still has 4x as many sales, but the niche song sold much more than it would have otherwise.
There are "who listens to what" charts here:
http://www.last.fm/charts/music/track/
Obviously, any music community that you have to join is to a certain extent self-selecting, but no more so than iTunes. It's not a million miles from the current UK chart, either (last.fm is UK / European based and so that's probably the best comparison).
The point of the "long tail" isn't that the sales stop being weighted towards the "hits". You still have a power-law distribution, that doesn't change. The point is that today, the distribution is artificially restricted, because items are dropped from availability. When you extend the number of products available, you make more money from the "tail" products and the portion that came from the original set of hits is smaller.
If Apple downloads closely follow Billboard, so what? Radio used to be the way pop music was marketed. People are listening to less radio. Overall sales of music are going down. What's happening? More people are marketing their own music on the web. Those sales never make it into the official statistics. Occasionally a hit will happen on the internet and be picked up by a large music company (Ldn by Lily Allen comes to mind). More often you have artists who are really happy if they can sell a thousand of the CDs their buddy burns for them.
The market is changing because of the internet, the big boys just haven't found a way to quantify it yet (other than blaming their loss of revenue on piracy).
I have "Story of a Young Heart" on vinyl, bought it when AFOS was still somewhat popular. I was listening to a cassette I made of the album in my old truck (cassette only) just last weekend.
.99 every few months or so.
It's true you don't have to advertise. It doesn't cost anything really to have it available for download. Just sit back and rake in the
I'd like to see the music industry change in a lot of ways, but one really cool thing would be for the top 40 to account for 10% instead of 99.9% of sales. I don't know if we're headed that way or not. People seem to be following the herd more and more, but at least technology might stack the deck a little.
Man, you really need that seminar!
Of course hits are going to continue to outsell the "long tail". I think what the author here misses is that when I buy a "hit" off of let's say Amazon, I may also be buying a long tail item as well. And I may be buying both off of Amazon *because* it lets me buy the long tail item as part of my purchase.
Stores always want the most selection. If it was all about hits, why stock anything other than the Top 40? Because people want other things as well, even if the Top 40 sells the most. What the long tail does, is makes offering selection much cheaper to the stores.
Say you have a mom and pop store in a town. They need to take a risk to buy one or two copies of a relatively unknown book or CD. Since they're not buying in bulk they don't get as much of a discount from their distributor. Then they have to hope someone in that area wants to buy it. If not, they're stuck with it because their customer base isn't large enough.
With an online store, suddenly your potential customer base is millions of people. Many more than the thousand or so that may come into a local store. Now you can order a small bulk order of an obscure item and most likely you will find people who want to buy it, regardless of where they are located.
In fact, people who find obscure items at your store will probably be more willing to buy other things from your store because you sell the niche items they like. Some of these may even be hits!
I think this is why the Long Tail is important.
So long as mainstream media still publishes flashy ads with peppy backbeats business will still be a primarily hit-driven model. What I understand about the "Long Tail" effect is that niches that are out of the current meme can last forever and pick up sales as trends shift and individual taste develops. A failure is no longer an "indefinite" failure, but can be recalled if and when the consumer chooses to do so, leaving an awfully large window by which one can measure 'success' especially if and when an item becomes "en vogue."
Where it fails is that it assumes this will be the bulk of stores. The bulk of purchases will not be niche-driven, nor nostalgia items (while they will still exist), but rather it will be (drumroll please) mainstream as it always has. When something becomes popular, mainstream gets in on the business and controls it until demand fades.
Also, people with no preference are forced to choose from what they think they know. What they know is what they see and hear on a daily basis, and big money puts out more advertising. Niche models will still have a place, but will not prevail in the forseeable future. It will still be all the rage in basions like San Franciso, but hell, hasn't it always been cool to consider yourself 'underground' and 'elite.' Don't think it's above mainstream to stoop there too.
If you're half as beautiful naked, you'd be 4 times as beautiful with twice as many clothes on.
Personally? I think the 'long tail' effect is going to be highlighted more in the blogosphere.
Case In Point:
Person A likes something really popular at the moment(Say, Pirates of the Caribbean), but also likes some less popular things at a constant rate for a longer period of time (the DS Lite, Gaia Online, Crocs) and some niche things that have a burst of interest for a short time period (Sonata Arctica, Super Princess Peach, Jibbitz)
Person A blogs about all seven items in a single entry, and most likely spends more time talking about the niche things in total than on the really big popular item. Likewise, while information about PotC is probably easily accessible on Wikipedia or elsewhere, the user may have to seek out (and link to) niche sites for the less popular items, and thus lead her readers to these niche sites as well. The niche sites generate interest for the niche item, and boom, we now have more people wanting the niche.
It's the rough equivalent about how Shopping Centers usually have an 'anchor' in the form of Wal-Mart or a Bookstore, and then have the specialty shops around it to fill out the real estate. As more people notice themselves doing this with their blogs/LJs/MySpace/whatever, the niche items gain swing and soon gain a sizable portion of the market in this way.
The internet's main impact on the Long Tail is its ability to piece together far-flung bits of interest in an item, allowing them to congeal into a sizable force. Saleswise, however, the impact is only noticable to internet sellers (or big volume concrete sellers, like department stores), since smaller concrete retailers still find the costs of marketing to a niche prohibitive unless they dive into specialties. However, with the Long Tail, the consumers of these niche items become far more entrenched than before.
I would submit that the long tail, in any form, creates false hopes for content creators. Consider the economics of being in a band with 4 members plus a couple of multi-talented support crew (e.g. manager, equipment engineer, lyricist, sound engineer, etc.). Such a group needs to clear $120,000/year after expenses (equipment, vehicles, gas, marketing, etc.) just to stay above the poverty line (20k/person before taxes). That's suggest a gross of $150,000 to $200,000.
Getting that from iTunes means getting 150,000 to 200,000 downloads per year. If the group creates one album of new songs each year, and if the band's album is like most, then maybe 3 "good" songs shoulder the burden of feeding the band. The band would need their three good songs to average more than 50,000 downloads/year (that's 1,000 per week). That's a 1,000 downloads per week just to stay afloat. If, by some miracle, the band creates 12 good songs every year and has a deep backlist of 24 more good songs with steady sales, then they still need to average 80 downloads per each and every song.
iTunes has about 3 million songs and perhaps 25 million downloads per week. Thus the average song only gets 8 downloads per week. Under the long tail model, the vast majority of songs have average performance and relatively few have above average performance. That means that the vast majority of songs don't pay enough to keep a band above the poverty line. In fact, under this model, iTunes probably represents only 1% to 10% of the money needed to stay afloat.
My point is that the long tail is great for consumers because it gives them more choice. But the model consigns the majority of the content creators to a below subsistence wages existence as they hope that they can climb out of the deep long tail.
Two wrongs don't make a right, but three lefts do.
A couple of years back, I was telling a friend about a great book I had as a kid, called "Who Needs Donuts" by Mark Alan Stamaty. My friend had just had a kid, and I was thinking it would be cool to get a copy for him, but it was long out of print. I shelved the idea for a few months, and then decided to try again, and if that didn't work, scan my old copy, which I had saved, and print a new one. In the intervening months, the book came back for a reprint, 30 years after its first printing.
My feeling is that it shouldn't have been that much work, and there's no reason the publisher should have to print up a whole multi-thousand book run. The occasional nostalgia buyer would do really well for publishers and authors who have low-volume books.
So if I want to find old editions of the Book of Knowledge from 1944, where the commentary following the story of "the first men on the moon" indicates that "maybe your children's children's children will walk on the moon", I should be able to.
In short, no more dark ages. No lost wisdom. No lost idiocy, either.
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An excellent point -- there might not seem to be any way to advertise the other 90% of apparent "non hits," but that's only when you consider advertising in the traditional, fixed billboard and shelf-end type of way.
Advertising can take a lot of different forms, and I think Amazon is just scratching the surface with their recommendations. As advertising companies become less obsessed with just shotgunning a "message" out to as many eyes and ears as they can, and hoping they hit the right audience in the process, and instead catch on that you can get a lot more bang for your buck when you don't try to sell the same product to everyone, I think the "recommendation engines" type of ad-delivery will play a bigger role. (Because, when you get right down to it, the difference between a "recommendation" and an "advertisement" is just the context.)
There are always going to be hits, because people always want new stuff. Even if everyone had access to the entire back catalog of human civilization, for free and on demand, there would still be 'new hits.' Not as big, probably, because right now there are a lot of people who only listen to hits because they can't find the stuff from the back catalog that they want, but they would still happen.
What has to happen is that the music/movie companies have to realize that "hey, we make just as much money if you buy a song from 1994 than if you buy a song from 2006." That's the key thing that I don't think they've really understood yet, as evidenced by their seeming refusal to advertise anything but the newest stuff. A sale is a sale -- particularly when selling a back-catalog song doesn't mean that it's been sitting in a warehouse for 10 years, doing nothing but tying up capital.
What I see happening is more individually-targeted advertising that takes into account consumer preferences and offers up stuff from the catalogs for them to buy. Once you've accepted that it doesn't matter whether the consumer buys "MI:3" or "Dr. No," as long as they're both your products, you can advertise whichever one they're more likely to buy. In fact, it's stupid not to advertise whichever one you think they'll buy, because to do otherwise risks losing a possible sale. It just makes good marketing sense.
This requires that you have a lot of information on the purchasing patterns and preferences of each customer, but that's not hard to get (and a lot of people will give that up freely, if it means they get good recommendations).
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
The idea of the long tail is the area under the curve. If he height of the curve represents the amount of money going to any one item, the area under the curve is the total amount of money available. That area is supposed to be more or less constant: people will spend a fixed amount of money on books, music, etc. They may spend a bit less on music if the music itself is cheaper, but in general the assumption is that things will even out so that prices would rise and/or people would buy more music.
The long curve is about shifting the curve so that it's flatter. Same total revenue but distributed to more people.
The profit doesn't really enter into it. It may be cheaper to produce indie music/books/movies/etc, but it may not. A studio may spend $200 million to make one movie and sell $400 million worth of tickets. Or 2,000 little indie studios could make 2,000 movies for $100k each. One will be a blockbuster hit and make $100 million. Three will be minor hits and make $5 million. The rest will sit there on the tail, and most of them will make squat or turn a bare profit.
But aggregated, they'll all make up about the same $400 million on $200 million in revenue. The winners change, and the profitability computations get complicated (somebody won a zillion times more than the studio ever could have; many suffered losses.)
The consistent winner, as you point out, will be the companies that "own" the tail. Those companies are like the current studios: big central points of reference where people when they want stuff: Amazon, iTunes music store, eBay. Like the studios, they depend heavily on marketing, and that keeps out other players.
To sum up, it's less about the amount of profit as redistributing where the revenue. The cost of that profit is actually not all that different from what it used to be, once you factor in the losers; there are a great many losers on the long tail.
But it sucks revenue away from the big hump in the center. They're losing out to a new competitor: they might actually split that $400 million that people are willing to spend on a movie with the long tail, but if they get only half of it they're profitability has gone from 100% ROI to 0. And that's all the difference in the world.
Citing the iTunes store as representative of anything but a "Hits Business" is flawed. I think consumers who represent the statistics in the long tail don't shop at the iTunes store. While I know it's not a vaild argument to cite what my own purchasing practices are, I for one spend a lot less on music at iTunes and more at places like Om Records, Defected, and other independent label online stores. In fact, if I do purchase at iTunes, it's usually a very popular song which is consistent with iTunes being in the "Hits Business". The arguer is right about that, but wrong about who it accurately represents.
Hades, PoD: Official Advocate
Yes, but in Soviet Russia the tail longs for you*
* Disclaimer: Soviet Russia no longer exists and may never have exactly matched comments in this post which are for illustrative purposes only. Anonymous Coward industries takes no responsibility for geeks swarming towards present day Russia where the tail may long more for their dollars than for their persons.
I think you're factually correct, but your conclusions are wrong. The long tail doesn't really help content creators who can't develop a large market for their work. Period. You can't make $200,000 a year, if you only sell $100,000 worth of stuff. "New media," or "the long tail," or any other buzzwords are not going to help you. (Creative accounting might, but not for very long.)
Where I think you're off-base is to somehow imply that the situation that your hypothetical band faces is any worse than the situation they have right now. At least in this model we're discussing, they have the possibility of making a few bucks from their music alone -- perhaps enough to make simply recording music a pleasant hobby, if not a day job. It might be enough for a garage band who previously played only for themselves to justify buying some better equipment, or justify it instead of some other way of spending their free time.
The band who is not going to make a professional career out of the "long tail" music scene, certainly wouldn't be able to do it in a purely corporate, hit-driven model, where your odds of success are comparable to what you'd find by playing the Lottery (and the effect roughly the same -- for every person who strikes it rich, dozens if not hundreds of other bands go bankrupt).
If you were a band that could have done well under the old hit model, then you can still do well today; the 'hit effect' still abounds, and by cutting out the middle man, a band today or tomorrow could conceivably make more money selling less songs, but cutting out the labels' overhead.
Furthermore, in your calculations you're leaving out the band's income due to non-music sales: concert tickets, merchandise, endorsements, etc. Those make up the bulk of a popular band's revenue today, under the studio-centric model, and that probably wouldn't change immediately. People are still going to want to go and see a band they like in person, wear that band's t-shirt, and companies trying too hard to be hip are always going to be willing to pony up dough to artists willing to promote their schwag. It's a mistake to assume that a band's main source of income must come from iTunes. In reality, a smart band would treat the iTunes income as a "bonus," and use it in ways that help to increase their real revenue sources.
Nobody ever said that being a musician should be easy: that you should be able to just make music and then wait for the money to roll in. Succeeding in that business is like any other, it takes a lot of hard work; under a 'long tail' model, the most successful bands would probably be the ones that stay endlessly on tour, working venues small and large, selling high-markup merchandise, and using their music essentially as an advertising vehicle for self-promotion and to establish a fanbase. If the Internet allows them to derive income from their music directly instead of having to pay radio stations to pay it (as the studios basically used to do), all the better.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Let's go back to your assumption of having 12 'good' songs (averaging 8 downloads a week), 24 okay songs (averaging maybe 4 hits a week), and add on another 12 crap songs (maybe 1 download a week). (12 * 8) + (24 * 4) + (12 * 1) = A little over 200 downloads a week.
That's $200 a week that the band can count on, if they sit on their ass. Now let's assume that they're not.
Let's toss in that every concert they play, they manage to spike iTunes downloads enough to make an extra $100 each time, with a residual of $10 a week to add onto their sitting-on-ass total thanks to continued interest. Let's also say that the band gets slashdotted/Digged every now and then and this gives another $100 spike with $40 residual when this occurs, while the average user's blog drums up maybe only $5 in extra revenue for a day with no noticable residual.
So...
Week 1:
$200 normal revenue
$100 concert spike (and one guy blogs about it next week on MySpace)
Weeks 2-5:
$200 normal revenue + $10 concert residual (+ $5 from the MySpace post for one week)
Week 6: (Slashdotted about an upcoming concert at the end of the week):
$210 normal revenue
$100 concert spike (with $10 added residual + ten people blogging about the concert)
$100 Slashdot spike (with $40 added resiual + added concert interest + five fans coming out of the woodwork to blog again)
Week 7:
$260 normal revenue + $75 in blogging revenue
And the cycle continues ad nauseum. Yes, Not even making $500 a week on iTunes sucks, but we're not even including how many of those users bought actual CDs, posters, apparel . . . it may be that $500 is a perfectly good showing if they can count on that without even having to do anything, and my model suggests that every time they actually DO something, it only gets higher. It's easy to see how if the cycle continues at this rate, our hypothetical band could easily hit $1000 every few weeks or so with the right amount of activity and press. (And I didn't even include the impact making new songs has on their income!)
Quite simply, if there wasn't money to be made in the Deep Long Tail, there wouldn't be content providers there.
First of all, as the other poster said, while this situation may suck for a band, it's not really any worse than how it sucks now. Not to mention that playing shows is how most bands make most of their money. Anyway, that's been said already. I take issue with your breakdown of the payout a band gives. Essentially I think you have no idea how small bands that aren't in the mainstream operate. When I read that you would pay a "lyricist", I almost broke out laughing. Outside of manufactured pop bands (who aren't likely to be in the long tail) most bands write their own songs and lyrics themselves. I don't know what kind of music you listen too, clearly not much in the long tail. Most bands at this level probably don't have a manager either. Under your economics they just plain couldn't afford a manager and so they probably would just manage themselves. Equipment manager - most small-time bands do this themselves, it's only the big-shots who have people looking after their guitars for them. Sound engineer is the only reasonable one on your list there for a small band, however they're sure as hell not going to take in an equal share of the profits as the other band members. The sound engineer would produce their album and then be done with it. It would be a contract job, not an equal stake. Regardless of your ridiculous assumptions about the nature of small bands and what they spend their money on, you are somewhat correct. The long tail helps consumers more than producers, perhaps. However, part of the long tail online is that things can be bought from far across the world. This helps a band get a larger geographically dispersed audience rather than simply getting people in their local area.
I'm glad somebody pointed that out.
There's a reason it's called "the long tail" and not "the long club-foot." The tail tapers out -- it's not very big, in terms of sales volume per item. It just goes on for a while (hence, long).
Right now, the tail is chopped off because of the costs of maintaining a huge physical inventory. It's only economical to keep the stuff in stock which generates a certain number of sales per week, because it costs a significant amount of money to keep it there. Digital distribution reduces this cost -- it doesn't eliminate it -- so that it's now practical to keep a lot of stuff 'on the shelf' that wouldn't be there otherwise.
As a result of this, these "tail" items will probably get more sales than before, when they got zero exposure, but I don't think anyone's saying that they'll suddenly grow to the point of being bigger than the "body."
The point is just this: as the marginal cost of stocking an additional item approaches zero, the number of items you can keep in stock approaches infinity. (Note 'approaches,' which doesn't mean 'equals.') Or in other words, there's money to be made, and if you can keep your costs low by using new technology, you can make it.
I think people are hyping this a bit out of proportion. It's analogous to the changes that happened to retail when mail-order companies first appeared at the beginning of the last century. Suddenly you weren't restricted to buying the one model of stove that your local general store had on display -- because of centralization and transportation, it was now practical for Sears & Roebuck to stock 10 or 20 different models of stove in a single warehouse somewhere, and ship you whichever one you wanted via Rail Freight. Digital distribution takes this one step further, by making the warehousing and transportation even cheaper.
The only thing that makes digital distribution startling is just how much cheaper it makes selling the "one more copy." While the difference in costs between a general store and a centralized warehouse might mean the difference between stocking one model stove and stocking 20, digital distribution means that an online music store can have millions of titles for roughly the same cost as a physical store with a few thousand.
But take away the orders of magnitude difference in costs, and the overall change is very similar to what we've seen in other industries before.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
So what? How many copies do you need to sell to get an Amazon rank of 500,000? How many for 1,000,000? I'm guessing that to qualify for a rank of one millionth you'd have to sell somewhere in the 0-1 copies range. So if two people bought your book in the last week you might 'spike' to 500,000th, then drop right back down until your next sale in 2020. Hardly a compelling argument to support the importance of the long tail.
yp.
I think the whole discussion about the long tail is interesting and worthwhile.
I think the truth between the two discussions (Anderson vs. Gomes) is more likely to be something in the middle, not at one extreme or the other. I don't think hits are going away, and I think hits make their mark on most any marketable thing/meta-thing. With that said, I think that niches are more meaningful and valuable than ever before.
The book example is great - I get more access to niche publications because of the long tail concept, largely because of funding and popularity of hits. Said a little differently: the niche stuff generally sits alongside the hits, and generally benefit from some of the hits' halos.
My music isn't hit music. That's OK, it's just stuff made from my soul, and I am not planning to quit my day job. The money made from niche availability on the internet (for me) fund dinners out, an occasional instrument upgrade, or a small household bill or two. Why is the long tail beneficial to me? Because when someone is browsing James Blunt, they'll often see me on the front page in a promo, and sometimes (well, briefly) listen to my stuff too. Similarly, iTunes/Rhapsody/Emusic/Yahoo! Music/etc. browsers often buy the latest hits, but will splurge on a Jimmy Bear tune or two - how do they find my tunes? Because my niche music is available with the hits, and because searches sometimes come up with one of my funky little musings.
My point is, that niche stuff isn't taking over the world, and hits aren't all there is. I think the niche markets of the world have been greatly enhanced by Internet access, and that they also benefit from proximity to the hits.
A Passionate Independent Musician
Yes, some say the point of the tail is the length. That with proper margins you can even make money off of small volume stuff.
But more people use long-tails to state that if people could buy off-brand and specialized products as easily as they can buy mainstream stuff, the off-brand stuff would gain a disproportionate boost in sales. That is, big brands have advantages due to inequal distribution in traditional channels.
Since iTunes is equal access, it should show off-brand stuff selling at higher rates than through other channels. If it doesn't (as is said here), then it would put a crimp in the acceptance of this part of the long-tail theory.
I don't really believe in this theory that much. I personally think that people buy stuff through familiarity (both from experience with brands and from advertising) much more than the proponents of the long-tail would suggest. For example, look at the success of fast food. None of it is particularly good, but it still sells, especially when you are buying something in a new market (which in the case of food is perhaps when you are on the road).
http://lkml.org/lkml/2005/8/20/95
Fast food tastes very good for a low price, thats why its so popular. Most fast food customers are local consumers who fit it into their daily routine(for better or worse).
I think costs are fairly proportional with downloads, as the major cost is streaming. The costs you mentioned are very insignifigant, as each song is only around 3 megabytes. I'm not sure about the exact cost, but I have a feeling that its in the micro-cents.
You CAN advertise any part of your catalog very specifically to people who like similar products.
Especially with things like music. Look at some internet radio like http://www.pandora.com/ or http://www.launch.com/ there are some great ways to market that 90% that doesn't usually get big advertizing.
Both of those sites let you start off your own internet radio stations, and then they try to match your preferences and bring in similar music, and once in a while they throw in a curveball that you may or may not like.
So I start off a station with my favorite Indie Band A that gets marketing, and then I hear favorite bands B, and C. But whats this? Some new Band D that I've never heard because it is never advertized? Cool, I like this!
It's a lot like Amazon's preferences, and products that can be marketed in this manner support the idea of the Long Tail. But it definately is not for every market.
>The biggest sellers are always the most heavily advertised/talked about.
When all songs cost basically the same (say, $.99 as most do on iTunes), that's true.
But what if the "hits" cost $.99 and the "old stuff" cost, say, $.50?
How many people would sort by price and suddenly start buying on PRICE instead of what the latest advertising is pushing?
When all songs cost the same, there is no tail.
Steve
A work that expires before its copyright never enters the public domain and thus enjoys eternal copyright protection.
I think you explained Anderson's rebuttal point better than he did.
Momentarily, the need for the construction of new light will no longer exist.
The only gaming machine i have is a PSP.
The shop that sold it tome asked me about itand i told them so.
StillI keep getting advertisements for other gaming platforms and far and between forPSP titles, novelties and news.
Companies are sitting in a gold mine of information and are doing naught with it
IANAL but write like a drunk one.
First of all, unpublished data doesn't count. Gomes has the privilege of not only analyzing Anderson's data, but of criticizing Anderson's analysis. Anderson has none of that. Nothing to see here - literally!
Second, iTunes catalog is certainly skewed toward commercial catalogs, and not toward most musicians you'd find appealing to the Long Tail. Given this selection bias, is it any wonder Apple's data doesn't confirm Anderson's analysis?
The ironic thing is that this article wasn't on the front page of the WSJ. The article itself is part of the long tail.
I don't think that, for example, the Pixies are in the tail of any other band, though they sell less than many other bands. Tail suppose a head and vice versa, but in music, some bands don't need another band to sell. Thats not a tentative for a rebutal or whatever, just that in this case i find that the "head and tail" analogy is not really that good.
This was a valid insight, as the largest bookstores typically carry 150,000 titles. Anderson revealed that the size of the book market is more than twice as large as what the largest bookstores can carry.
It was Bezos' decision to launch with 1,000,000 titles that drove this, plus Amazon's own set up, which makes it easy for browsers to find related titles, see what others who bought a book also bought etc.
This was another valid point: that the tong tail won't emerge without software to allow customers to easily find what they want to find, and see what else might be of interest to them.
Itunes is not like Amazon. Their range is actually quite limited. It consists of current and past bestsellers (billboard albums and tracks) and not much else. Apple have so far displayed little interest in having a richness of content equivalent to Amazon's coverage of print. Or maybe it's supplier problems.
I'm sure Amazon, just like any other bookseller, look at their 80/20 sales. It shouldn't take a genius to figure out that 20% of 1,000,000 is a greater range than 20% of 150,000. In fact Amazon's top 20% represents more books than the entire range of titles stocked by a large bookstore! That's a long tail.
The Long Tail does not discount the importance of bestselling titles. Actually it reinforces it. To sell successfully (ie profitably) online, you need both. Bestselling titles bring customers to your website. What you need to have is a huge range of titles (whether books or music tracks it makes no difference) that those customers can easily and intuitively access, a range that the brick and mortar stores can never match.
Here in the UK, I'd say the web has had a massive impact on the way I do shopping, and is starting to affect non-geeks as well.
The UK is famous for it's "clone towns", i.e. cities where all they have are chain stores and no independants. I live in Portsmouth, which is a prime example.
Chain stores take all the fun out of shopping. Plus, you can never really get what you want, so I do most of my shopping online. eBay and independent web sites are fantastic for this. And it's starting to cross over to normal people too, especially eBay. People are realizing there is more to shopping than Woolies, Top Shop, Dixons and all the other pointless chains. You get better choice and a better deal, and companies can cater to a niche market online.
A perfect example would be Maplin. They used to sell electronic components, but now they hardly stock any (you can still mail order a more limited selection). But you can get much better prices on the web from places like Farnell, who traditionally would not have sold to hobbyists like myself (you needed to buy their catalogue for a start). I get components from eBay too, often from Hong Kong or China. So, suddenly a niche market that Maplin more or less abandoned in favor of consumer electronics has reached a global scale.
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SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
I've read all these posts, and they almost exclusively focus on the music business and a little on the book business. But what about the rest of us little businesses who would not, could not exist without the Internet?
In 2000, I shocked my friends when I told them I was going to start a business selling catapult kits ( http://www.trebuchet.com/ http://www.catapultkits.com/ http://www.mangonel.com/ http://www.trebuchetplans.com/ and more). "Who needs a catapult kit?" was the reaction I got. "People do." was my response. I told them I'd sell my kits on the Internet- this was just after the big dot-com stock market meltdown. Because of that meltdown, all too many people believed that e-commerce was a doomed business and that I was a fool.
Maybe I am a fool, but I started my business with about $200 (not a typo- two hundred dollars), a digital camera and a fistfull of open source software. I spent zero dollars on marketing, zero dollars on advertising, and after a few months, I was already profitable.
Now I employ myself and some other people too. It's a very small niche market. So small, that it's actually NOT cost effective to manufacture these things in China (I tried). It's such a small niche market, that if I had to spend any money on advertising, I wouldn't survive. I tried actually- Radio, magazines, direct mail (not spam!) even a few appearances on TV. None was cost effective. Not even Google's AdSense is cost effective for my product line.
So, I live by the internet. I do no advertising other than a simple affiliate model. It's a widely distributed market, impossible to target. Thanks to the search engines, I don't have to find my market, they can find me.
Without the Internet, I wouldn't be in business. I am a cell in the long, long tail of niche businesses that simply do not make sense for a brick and mortar world, but thrive in cyberspace.
The long tail is real. My business is proof of that.
http://www.rlt.com/
Unless you've got this: http://www.memory-alpha.org/en/wiki/Food_synthesiz er