Tuesday, December 23, 2008

Long Tail Theory Questioned

According to a piece in the UK's Timesonline,
173,000 of the 1.23M albums available sold at least 1 copy last year
That means 85% of albums did move a single copy all year.
80% of of all single track sales revenue came from 52,000 tracks

The article states:

The idea that niche markets were the key to the future for Internet sellers was described as one of the most important economic models of the 21st century when it was spelt out by Chris Anderson in his book The Long Tail in 2006. He used data from an American online music retailer to predict that the Internet economy would shift from a relatively small number of “hits” - mainstream products - at the head of the demand curve toward a “huge number of niches in the tail”.

However, a new study by Will Page, chief economist of the MCPS-PRS Alliance, the not-for-profit royalty collection society, suggests that the niche market is not an untapped goldmine and that online sales success still relies on big hits. They found that, for the online singles market, 80 per cent of all revenue came from around 52,000 tracks. For albums, the figures were even more stark. Of the 1.23 million available, only 173,000 were ever bought, meaning 85 per cent did not sell a single copy all year.

I would love a more in depth look at the study. As for the 85% who didn't sell one copy are they making a living with their music? Did they give it away free and not make it available for sale. If no one bought a copy how did Will Page know the record existed? Do these acts have a profitable touring history?

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