Patrick Foster, Media Correspondent
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The internet was supposed to bring vast choice for customers, access to obscure and forgotten products - and a fortune for sellers who focused on niche markets.
But a study of digital music sales has posed the first big challenge to this “long tail” theory: more than 10 million of the 13 million tracks available on the internet failed to find a single buyer last year.
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.
Mr Anderson told The Times yesterday that he accepted that Mr Page and his co-researcher, Andrew Bud, the head of mobile software company mBlox, had found a dataset in which the “long tail” principle did not apply. But he said further conclusions could not be drawn until the data and its sources were published.
Mr Page and Mr Bud believe, however, that their findings seriously undermine Mr Anderson’s thesis, which came with subtitles such as: How endless choice is creating unlimited demand and Why the Future of Business is Selling Less of More.
“I think people believed in a fat, fertile long tail because they wanted it to be true,” said Mr Bud. “The statistical theories used to justify that theory were intelligent and plausible. But they turned out to be wrong. The data tells a quite different story. For the first time, we know what the true demand for digital music looks like.”
Mr Page, who carried out the economic modelling for Radiohead’s In Rainbows album, which was released free on the internet, said: “The relative size of the dormant ‘zero sellers’ tail was truly jaw-dropping. Rather than continue to believe the selective claims of ‘here’s another great example of the long tail at work’, we wanted to find out how longtail markets should be analysed, plotted and interpreted.”
However, Mr Anderson named by Time magazine as one of the world’s 100 most influential people - told The Times: “There is a reason why the ‘long tail’ has become a fixture in the technology world over the past five years - it fits countless phenomena we see every day.
“I respect what Will’s done and have no doubt that he has indeed found a dataset where it doesn’t work, but I’m not sure you can conclude much, if anything, beyond that. If he’s trying to undermine the entire Long Tail Theory, he’ll have to provide a lot more evidence. I welcome the debate, but until Will’s prepared to publish data and sources we don’t have much to talk about.”
Mr Page and Mr Bud found that, rather than following Mr Anderson’s predictions, online music sales followed instead a sales distribution laid down by Robert Goodell Brown, an American economist, in 1956.
Mr Brown, who was an academic at Yale, outlined the theory in Statistical Forecasting For Inventory Control, a landmark tract on inventory control that focused on the sales of industrial items such as rivets and widgets.
Mr Page said: “There is an eerie similarity between a digital and high-street retailer in terms of what constitutes an efficient inventory and the shape of their respective demand curves. I think there’s something more going on there: a case of new schools meets old rules.”
Mr Page and Mr Bud are working on a book of their findings and hope to stage a debate with Mr Anderson in Brighton next May.
The long and short of it
—Chris Anderson’s The Long Tail challenged the “80/20 rule” widely accepted in retailing. This suggests that selling the most popular 20 per cent of products is the way to make a profit as they will account for 80 per cent of sales
—Anderson’s analysis of online music sales suggested that, thanks to the cheapness, simplicity and global accessibility of searching for products online, retailers could make money from more obscure products because they would always find an audience
—An employee of Amazon, a company seen as an example of the Long Tail Theory in practice, once said: “We sold more books today that didn’t sell at all yesterday than we sold today of all the books that did sell yesterday”
—Eric Schmidt, the CEO of Google, described The Long Tail as “brilliant and timely”. Malcolm Gladwell, the writer and sociologist, labelled it a “Truly Big Idea”
—Critics suggest the book is more a projection of an idealised market place than a model of a real one

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As some have pointed out, marketing is the greatest hurdle to independent artists. Simply because music is available for sale on the web doesn't mean that anyone knows it's there. The numbers being bandied about say little about these realities.
John Landau, London, UK
I agree that this long tail assessment isn't measuring correctly. Let's see a chart of the sales and see how much IS in the tail. Even if it isn't true for music yet, it surely is proven by search:
http://weblogs.hitwise.com/bill-tancer/2008/11/sizing_up_the_long_tail_of_sea.html
Mark, Seattle, USA
this research seems to ignore the monumental shift in the music business model that we've seen over the past 10 years from cd sales to merchandising, live music and the majors desperation for 360 deals. this is the true result of the long tail - cd to promote tour rather than vice versa
hugh De Winton, london, United Kingdom
iTunes downloads /= internet sales
Many niches have their own websites, social networks and distribution methods. Have these been included in the data?
Also, low sales doesn't mean no niche market. Maybe bands are gaining fans online and reaping profits offline.
Felix, London, UK
I think it's always very obvious to the keen observer when someone just doesn't want something to be true.. Any long term commitment is a good one. This is a battle between greed and patience. The internet is a baby and under estimating it's future will only create a monster.
Dustin, Winona, MN, USA
Mr. Foster didn't explain the data set well. If 80% of all revenue came from a mere 52,000 tracks, with 3 million tracks registering at least 1 sale, that destroys the 80/20 rule to 80% of revenue from 1.7% of product. That's a very big but very short tail! Would be nice to know the % from albums.
Dale Mahoney, Boise, Idaho, USA
Not to be contrary but Chris didn't suppose that the ending for the Island for Misfit Toys song, in which every item produced will have a home, was true. He pointed out that niches could be served profitably because of consumer co-location trends on the web and the resulting lower SG&A costs.
Ted Wright, Atlanta, US
Nowadays long-tail musicians can't rely on mass distributors to sell their music. You just can't be found amidst a sea of other singles out on iTunes.
I don't think this shortening of the long-tail will last. Companies like Audiolife are helping these musicians get their music to their niches.
Ricky, Van Nuys, CA, USA
Let's not forget that amazon has a lot of success with Long Tail selling because it has a good way of helping people find other books in genres they are already reading. "Rock", "Pop", "Alternative" can only go so far as descriptors. It's difficult to find new-to-you music!
Laurie, Boston, MA, USA
The top selling list is 52,000 items long, but in total over 170,000 items have been sold. This seems to back up the long tail theory, rather than critique it. The fact that there were over 1.3m items in total is a moot point. The infinite shelf space the internet offers has enabled this.
Daan Jansonius, Bournemouth, UK
I imagine the shape of the sales distribution will vary widely based on the quality retailer's ability to present compelling choices. Netflix surely rents more long-tail movies than Blockbuster, and Amazon surely sells more long-tail books than a typical bookstore.
Ed Kohler, Minneapolis, MN, USA
Surely the FIRST big challenge to the long tail fad is everyday experience?
That, and the fact that 2,500 years after Croesus, markets have evolved to follow Pareto's Rule (buy from specialists and experts) rather than the long tail (buy from your next door neighbour), because that what people want
Ian Kemmish, Biggleswade, UK
i disagree with Will's premises and conclusions. there is no business model yet to monetise all music traffic across ISPs. there are over 40 million tracks available on social networking sites alone - not the 13 million quoted. How would Will's stats look if all music downloaded earned money?
Robin Millar, London, UK
A point missed here is before download, if you liked only a couple of songs by an artist. Then unless they were released as singles you had to buy the album.
Now you can buy the 2 or 3 songs you like without having to pay for the junk that's left.
Keith, Chester,
When I was a lad record shops focussed on the top 40. That's all they stocked. Over a year about 250 singles. Now Page tells us it is the top 52000. The new tail is longer. But he also shows that the supply tail is even longer again. Due to the new competition niche marketing is tough.
Cam Rungie, Adelaide, Australia
Emusic.com offers millions of tracks, but limited guidance through its endless catalogue - the consumer is left to invest hours of time searching for needles in a haystack. Boomkat.com represents a proper solution, quality control strong enough to mean casual browsing won't be a waste of time.
Rich, London,
Anyone who's delved into the worldwide network of second hand books enabled by Amazon's databases has seen the Long Tail in action. Perhaps the absence of record sales reflects marketing issues rather than a failure of the concept. Still, as saying goes, every exception tests the rule
Mike Tanner, Auckland, NZ
The reason for this (at least in Classical music) is because CDs are often still better value than downloads. I'm happy to pay to download MP3s, but they must be quite a lot cheaper than buying a CD: the MP3 format is lossy, there are no notes, and I can't sell it on if I don't like it.
Alex, Stoke-on-Trent,
Long Tail does exist just give people tools to navigate it and discover (Amazon is the proof). I would very much like for Mr Page to do similar research on the amount of tracks listened at Last.fm. Mr Page's research just shows that Long Tail just still underutilized lacking discovery tools.
Elena Lvova, Moscow, Russia
So what was true last year will always be true? Is that the thesis?
One can't draw long term conclusions about human or market behaviour based on one year's data.
Keith S, Winnipeg, Canada
If 80% of sales came from 52,000 tracks, that means they came from about 4,000 different albums. Well, I'd bet that in HMV's physical stores 80% of their sales come from about 100 albums. Ergo, the long-tale theory has some substance.
Ali C, Warsaw,
Far from disproving the Long Tail theory, this new research actually supports it. The data has been misinterpreted it seems. Of the 1.23m albums available, 173,000 were bought. A typical High Street store only stock the Top 100, meaning a "long tail" of sales online of more than 172,000 albums.
Graham Jones, Reading, UK
The Internet certainly gives musicians the freedom to put there music on line and to be bought, but they forget that the money spent by record companies promoting bands on the airwaves is where the public here the stuff. It's great if you're an already established band not if you're not.
Winston Smith, Wigan, GB