Study: Long Tail economics do not apply to music

A new study into digital music sales suggests that ‘long tail economics’ do not apply to music sales.

The idea of the Long Tail was coined by Anderson in his 2006 book ‘The Long Tail’. The basic idea is that that the absence of distribution and inventory costs of online sales would add a ‘long tail’ to the classic demand curve, which consists of a big ‘head’ and a small ‘tail’. Anderson’s predicted that the internet economy would shift from a relatively small number of ‘hits’ at the head of the demand curve toward a ‘huge number of niches’ in the tail. This ‘long tail’ would open up a vast market for sellers and buyers where not hits, but obscure tracks would drive sales.

However, the new study by royalty collection society MCPS-PRS Alliance has found that more than 10 million of the 13 million tracks available on the internet failed to find a single buyer last year. In the online singles market, 80 per cent of all revenue came from just 52,000 tracks. Of the 1.23 million different tracks available, only 173,000 were bought. So it seems that the success of online sales still depends on big hits.

Anderson has responded to the research on his blog, stating that without proper filter and discovery tools the demand curves will likely resemble traditional brick and mortar demand curves, but that with proper filter and discovery tools, the long tail demand curve will emerge.