'Long Tail' May Not Wag the Web Just Yet 132
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.'"
How could it not change things? (Score:4, Insightful)
Duh (Score:4, Insightful)
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.
Re:Duh (Score:3, Insightful)
Alternatively, they could use a program similar to Pandora.
sales "closely track Billboard" (Score:5, Insightful)
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 [pmdapplied.com], 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.
There are a lot of niche markets (Score:2, Insightful)
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.
People look for fewer options on the web (Score:2, Insightful)
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.
I don't see that happening. (Score:4, Insightful)
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.
Re:How could it not change things? (Score:4, Insightful)
I think that a lot of the comments here are missing the point. You do not have to advirtise for the bottom 50% of music. It already has a devoted niche following. Just realize that it will never be as popular as the chart toppers.
Re:sales "closely track Billboard" (Score:5, Insightful)
No, Apple is the one that is happy. The point of the 'Long Tail' is really that a lot of money can be made from large stocks of low volume items. Particularly with digital merchandise where no product needs to be stocked or with things like print-on-demand where the product is produced quickly to meet actual orders. You may only sell 500 copies, but when Apple sells 500 copies of 100,000 different less-known artists songs they make a hefty amount of money.
It's economics, not statistics (Score:5, Insightful)
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
Maybe it all depends on how you look at (Score:1, Insightful)
How strange (Score:3, Insightful)
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.
Misses the Boat? (Score:4, Insightful)
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.
The Long Tail and the Blogosphere (Score:4, Insightful)
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.
Long Tail vs. Sustainable Content Production (Score:2, Insightful)
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.
Forget about iTunes... (Score:5, Insightful)
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.
Targeted Ads are good business (Score:5, Insightful)
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).
I think you're looking at it wrong. (Score:4, Insightful)
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.
Lyricist, what? (Score:1, Insightful)
Re:Forget about iTunes... (Score:2, Insightful)
Yep, this is exactly what this about. Technology and the internet make things such as older books and music available because of on-demand-printing, inexpensive storage and transfer.
Seriously, what does it cost for a book publisher to store an electronic copy of a book and than kick out a single copy when somebody decides they want one?