The Death of the Long Tail

Long Tail CoverToday MIDiA Consulting is proud to announce the publication of an important new report: The Death of the Long Tail: The Superstar Music Economy.  The report is available free of charge to Music Industry Blog subscribers.  (If you are not yet a subscriber to this blog simply enter your email address in the box on the right hand column of the home page.)

The 21st century decline in recorded music revenues continues to send shockwaves throughout the music industry and although there are encouraging signs of digital-driven growth, the impact on artists is less straightforward.  Total global artist income from recorded music in 2013 was $2.8 billion, down from $3.8 billion in 2000 but up slightly on 2012.  Meanwhile artists’ share of total income grew from 14% in 2000 to 17% in 2013.  But the story is far from uniform across the artist community.

The Superstar Artist Economy

The music industry is a Superstar economy, that is to say a very small share of the total artists and works account for a disproportionately large share of all revenues.  This is not a Pareto’s Law type 80/20 distribution but something much more dramatic: the top 1% account for 77% of all artist recorded music income (see figure).

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The concept of the long tail seemed like a useful way of understanding how consumers interact with content in digital contexts, and for a while looked like the roadmap for an exciting era of digital content.  Intuitively the democratization of access to music – both on the supply and demand sides – coupled with vastness of digital music catalogues should have translated into a dilution of the Superstar economy effect.  Instead the marketplace has shown us that humans are just as much wandering sheep in need of herding online as they are offline.

In fact digital music services have actually intensified the Superstar concentration, not lessened it (see figure).  The top 1% account for 75% of CD revenues but 79% of subscription revenue.  This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services – especially on mobile devices – and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.

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Ultimately it is the relatively niche group of engaged music aficionados that have most interest in discovering as diverse a range of music as possible.  Most mainstream consumers want leading by the hand to the very top slither of music catalogue.  This is why radio has held its own for so long and why curated and programmed music services are so important for engaging the masses with digital.

Music has always been a Superstar economy and there will always be winners and losers in music sales, with the big winners winning really big.  Over time the improved discovery and programming in digital music services should push the needle for the remainder artist tier but a) it will not happen over night and b) it will still have a finite amount of impact.

The Catalogue Size Arms Race

Matters are worsened by the music services’ catalogue arms race which has become entirely detrimental to consumers’ digital music experiences.  Action needs taking urgently to make sense of 25 million songs, not just through discovery and editorial, but also by taking the brave decision to keep certain types of content, such as sound-alikes, outside of music services’ main functionality.

Until labels, distributors and artists come to together to fix the issue of digital catalogue pollution – sound alikes and karaoke especially – the Tyranny of Choice will reign supreme, hiding 99% of artists under a pervasive shroud of obscurity and giving the Superstars another free lap of the track.

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The Long Tail Will East Itself: Covers and Tributes Make Up 90% of Digital Music Service Catalogues

In the early days of digital music, stores and services fell over themselves to boast about their burgeoning catalogue sizes.  Back then, when majors didn’t license widely, it really was something of an achievement to break the 1 million tracks mark, catalogue size was often a good indicator of the comparative breadth of choice among services.  But by the second half of the last decade, most of the majors had most of their catalogue online in most of the stores and services.  Independent labels lagged for a number of reasons but the majority of the independents (by market share) were also on the majority of services by this stage.  And yet since then, the average catalogue size of digital music services has grown from 4.3 million in 2008 to 16.4 million in 2012.  What fuelled this new catalogue arms race? It would be nice to think it was down to labels digitizing vast quantities of back catalogue, or even because of a surge of semi-pro artists.  The answer though, or at least the lion’s share of it, is much less appealing. Digital catalogues are so much bigger now because of filling and fluffing from covers, tributes and karaoke tracks.

Covers and Tributes Make Up 90% of Digital Music Service Catalogues

To test the theory I looked at the available tracks on iTunes for 10, randomly selected, top tier artists (see figure).  The startling key takeaway is that on average just 10% of the tracks listed for an artist is actually music by that artist.  And bear in mind that many of those tracks are duplicates.  The average U2 song for example, is listed multiple times ranging from original albums, remastered albums, EPs, greatest hits, compilations etc.

The vast majority of the remainder of tracks listed for an artist is filler drivel, endless cover versions, tribute acts and karaoke tracks.  As Peter Robinson highlighted in 2009, many of these cover versions sound all but identical to the original, while others have full intent on being identikit copies but poor musicianship and production leaves them sounding pitifully poor.  In among there are the occasional example of leftfield creativity, such as ‘Bass Parodies of Coldplay’ by Joe Bob’s Upright Bass Trio.  But artistic expression is hardly being tested with the likes of ‘Yoga to Coldplay’, ‘Led Zepellin Lullabys’ or ‘Dance Tribute to Lady Gaga vs Black Eyed Peas’.

When the Long Tail Goes Untouched

So just how much of the current 16.4 million songs on digital services are ‘the real deal’?  Back in 2008 24/7’s CEO Frank Taubert stated that 66% of his service’s 4.5 million tracks had never even been downloaded once (and remember these are the guys who power the vastly successful TDC Play unlimited free music service). That means that just 1.5 million tracks had been played, which is pretty close to the 1.6 million tracks we get if we apply the 10% rule across the entire 16.4 million catalogue count.

The number is probably bigger than that though.  eMusic responded to Taubert’s 66% claim with their own: that 75% of their 4 million tracks had been downloaded at least once.  But even if we take a straight average of the two (i.e. 44% of catalogue is untouched) we are still short of the complete picture.  Because even those tracks that have been played at least once will include multiple versions of the same song (e.g. album version vs single version).  Nielsen underscored the dynamic in 2009 when they reported that 3.6 million tracks sold less than 100 copies and just 1% of tracks were responsible for 80% of sales.

The Pseudo Long Tail is Killing the Real Long Tail

It is at this stage we start to see the core of the problem.  The short head will always dominate the long tail, but no more so than when the genuine long tail (the experimental artists, the up and coming, the niche genres) gets drowned out by the pseudo long tail of karaoke and 3rd rate covers.

Discovery in the long tail is already a potentially market-crippling problem.  It is time for music services to stand up and be (down) counted.  16.4 million songs means nothing if the vast majority is useless filler.  This is not to say that there isn’t a place for this strata of bottom-feeder music, but that place is not as part of the main results of original artists.  At the very least music services should file those tracks away in their own section.  But even if they can’t bring themselves to do that, they should stop listing these tracks in total catalogue sizes. The 90% filler tracks paint a misleading and confusing picture of digital music availability.  The best solution of all though is for music services to do away with them all together, and if there is really a market need for them, then let some niche player fill that gap instead of blighting real music services.