Not so much of a long tail?

There's been lots of excitement and thinking triggered by Chris Anderson's theory of The Long Tail aka the prevalence of the power law curve.  Well, perhaps this isn't as prevalent as we first thought.  The first empirical study of digital music sales suggests that removing physical constrictions has had little impact on sales.  To quote the study:  

"80 per cent of the revenue came from 52,000 songs. What's eye catching about the number? Well, the typical inventory of a conventional high street record store was around 4,000 CDs. Or ... around 52,000 songs."

So maybe the long tail isn't as valuable as we were led to believe.  You can read more here.  (Thanks Dino for the tip).

The Long Tail

The Digital Music Lack of Tail

Comments

[Daan Jansonius]

Wasnt the point of the long tail that it now financially make sense to sell items hidden in the tail because of the accumulative effect?

I dont think the point was that the long tail is more lucrative then the head, just that because marginal distribution cost are zero or close to zero it makes sense to stock the slow burners because all of them together still add up to a healthy profit.

If that makes sense?!

[Tyler Fodna]

It would be interesting to know how many artists constituted those 52,000 songs. I would bet that it would be about 26,000 unique artists as opposed to the 4,000 artists that formally constituted the 80% of sales.

That expansion of artist choice is absolutely an effect of long tail retail channels eliminating costs associated with physically stocking records.

[Paul]

I think this line is where the whole counter argument broke down with me:

With cheap production tools and the internet as a new distribution channel, some costs of production are indeed lowered, and some artists can indeed cut out (or disintermediate) the middle man. But those old rules still make a significant difference to your business strategy.

I think Anderson would argue there is a very real difference between cheap and zero. Zero marginal cost is at the heart of the Long Tail argument. Zero marginal cost of production coupled with all the search tools Anderson talks about propels people down the tail. I cant see how these forces will work in reverse. I can see how they might take time to fully mature, but I dont think the tail is going away.