The end of the Long Tail?

Will Page, economist at the MCPS-PRS Alliance (rights collection agencies) gave a presentation today at the Telco 2.0 conference essentially saying that the Long Tail is fairly completely incorrect. (What was interesting to me is that he apparently helped Chris Anderson write the Long Tail book, but has since found the data does not support it)

They apparently studied a UK/Global music provider’s business and found that while there was a long tail, it was extremely poverty stricken and much of it is moribund. In their survey, 43 tracks had over 100,000 sales, of a total of 30m tracks. They found c 80% of all sales were from c 0.4% of all tracks.

Incidentally, even Free doesn’t work - when Radiohead gave away their music for free, there were still 400,000 illegal downloads in the UK. Not only that, they have found that illegal services focus on the “hit head” even more than the average.

Most interesting though, is they looked at c 86m transactions and found that the relationship looked less like a Long Tail one than a Log Normal Distribution, and where it differs from the pure “Log Normal” it is skewed to the hit head. Hit Music online is not so much a “Top 40” game as a “Top 14” game.

Economically they think this is because there is actually scarcity in the digital world – its on the real estate of the portal / EPG / selection system that users access to choose their music.

My own view - I've always been uncomfortable with the Long Tail's argument apart from the basic argument that you can make money by aggregating across it with low cost services. (ie I think its been pushed into too many situations where it isn't relevant)

I did Mech Eng at Uni all those years ago, we studied inventory management theory, and the thing I recall is that nearly every inventory based demand curve was Log Normal I have long believed that the big issue in the online world is the lower transaction costs - which actually supports a "positive returns" power law dynamic - aka the big get bigger - and that drives an increased rush to the Hit Head - in other words any service which had a long tail distribution would rapidly move to a bigger hit head in any online world.

(Update - El Reg has blogged a bigger story about this over here)