Hmm, seems like I missed the news last month that the so-called Long Tail is dead, which is interesting as I looked at the economics of music sales last month following a meeting with Russell Hart of Entertainment Media Research. Appears their Digital Music Report 2008, based on 1,500-strong survey, may support this trend in so far as it highlighted a drop in illegal downloads too. Or to put it another way I wonder if you included illegal downloads in the of the digital inventory whether the pattern might look somewhat different. Obviously you’re not talking about revenue then, but hey I’m just curious in case that helps find new sources of revenue!
“The most comprehensive empirical study of digital music sales ever conducted has some bad news for Californian technology utopians. Since 2004, WiReD magazine editor Chris Anderson has been hawking his “Long Tail” proposition around the world: blockbusters will matter less, and businesses will “sell less of more”. The graph has become iconic – a kind of ‘Hockey Stick’ for Web 2.0 – with the author applying his message to many different business sectors. Alas, following the WiReD Way of Business as a matter of faith could be catastrophic for your business and investment decisions.
“Examining tens of millions of transactions from a large digital music provider, economist Will Page with Mblox founder Andrew Bud and Page’s colleague Gary Eggleton, looked to see how large and valuable the “Tail” of digital music may be. They produced a spreadsheet with 1.5 million rows – so large, in fact, that it required a special upgrade to their Excel software (and more RAM) – and the three revealed their work at the Telco 2.0 conference this week.
“They discovered that instead of following a Pareto or “power law” curve, as Anderson suggested, digital song sales follow a classic Log Normal distribution. 80 per cent of the digital inventory sold no copies at all – and the ‘head’ was far more concentrated than the economists expected.
“Is the ‘future of business’ really selling more of less?” asks Page. “Absolutely not. If you had Top of the Pops now, you’d feature the Top 14, not Top 40.”