As Andrew Bud explains:
“The Long Tail’s argument is that the pattern of consumption for media is bent out of shape by the limits of the shops selling them. Digital media lets the nature of people’s demand flow free. Well, we now know what the shape of that demand curve looks like.”
Bud told the conference that the basic shape of consumer demand for digital music clearly fits the Log Normal distribution, “with eye-watering accuracy”. That’s no surprise, he says, because so many sales curves he’s seen over the past ten years follow this distribution.
“Now we’ve seen what happens when tens of millions of choices are thrown in the air and people can go pick them up. What was astounding was the degree of inequality between the head and the tail – by a factor of three. It’s specifically the Log Normal shape that leads to a rather poverty stricken Tail.
“There are Tails where the Tail lives as a kind of welfare state. Not this one. You starve in this Tail.”
Of course it’s bullshit, Wired is always looking for new suckers, er – readers.
Looks like Anderson bet badly wrong. It’s cute that that the same lognormal distribution comes out in digital. Anyone at Wired ever run a store?
Guess I’ll have to cancel my subscription. (Just kidding – who the hell reads Wired anyway?)
The big newspapers are going broke. Printing BS isn’t paying for the cost of the ink and the ink is more red than the paper. I’ve got the blues for Christmas.
This is the classic Wired mistake of mixing up cultural uptake with an actual business model. He probably got mixed up (seduced?) when he looked at the “Pareto style” distribution. The Pareto models things like a stock’s standard price return or the characteristics of internet traffic (big files sizes at one end).
Eyeballing doesn’t equal math and the real data doesn’t equal the curve. For example I would bet real money that Wired’s sales history wouldn’t follow the model.
It’s sad but I’ve seen investors suckered in by “angel investors” using this crap.
Disclosures: Many. I am, unavoidably, conflicted because I live in the world I write about.
I got the rats all pissed off and a bunch of cats chasing after me. Cousin Mickey no longer will speak to me. I will speak for cheese and give cheesey ad vice so you rats can make a quick buck off all the rats in cyberspace.
By the way, there is no better way to spend $10 than on cold beer or Kentucky sour mash.
Thanks,
Ano
Power Laws are everywhere in nature — like Mandelbrot showed — but that does not mean they will map permanent to music sales.
Books sales are still long tales. Will something change that, who know?
The reason we don’t know the future is that we can’t know the technology that may alter the future — Henri Poincare showed that.
It nuts how people try to fit everything to a simple model instead of letting the data expose it own conclusions.
wiglebot said “Books sales are still long tales.” I assume you’re talking about individual book sales.
Only 25% of Amazon’s sales are in the tail. Conversely 75% of their revenue comes from 2.7% of their sales.
What this really affects are companies trying to use similar “monetizing” techniques as successful ventures (i.e. another You Tube or itunes, etc.). Under the “long tail” theory they can expect at least a piece of the pie.
Instead the reality is there is usually room for between one and three successful ventures, and the rest will eventually fail. (and the third will only be successful if they allow pr0n and numbers 1 and 2 don’t)
Everything is driven by the Fibonacci number…but you knew that, John! 😉
How do you get a bell curve based on a products that cost the same?
If you want to go out and rule the world, betting on the long tail is not the way to go. Few small businesses can go head to head against Walmart. But many many small businesses find a niche within the “tail” and make a fine day to day living.
To say that Radiohead is proof that the music industry has been right all along in this digital age is laughable. This is a band that receives little to no radio airplay nor licenses its music for commercials or whatnot. The music industry is still chasing the next American Idol winner.
I don’t think Andersen ever said the long tail will sustain every person. At some point, the tail goes to zero.
By the way, among problems with the article if not the study is that it was presented by the founder and board member of mBlox, who just happen o have a mobile music and video download services. So, wouldn’t it be in their best interest to convince people that limited choices are actually better.
Yes, the article deserves a BS-meter rating. It may be true, but it has all the hallmarks of BS: vested interest, how do you verify the data?, how do you even evaluate it on your computer? As it stands, it’s just one arm-waving argument contradicting another.
From what I gather of this lean vs fat tail analogy is this. The music industry operated much like the US auto industry has. Dictating the larger sizes of vehicles (and worsening gas mileage) as what the public desired to buy. The truth is, that’s what the automakers only want to sell, because they make more profit from larger vehicles, for the man hours spend assembling them.
And similarly the music industry has always made more profit from album sales, than single sales. But when they converted to digital music, to make less costly (to them) CD albums possible. They opened the door to the enviable break ups of their albums into home brew singles, if they didn’t offer it themselves. And for a while, they didn’t.
Then they came out with some singles (on CDs) at half of regular CD album prices. Either one very long cut (mix), or a slightly longer than original cut of two songs, on a single CD. But not for a $1 or $2. More like for $5 or $6, as I recall. So I never bought one. But I’ve also bought fewer and fewer CDs over the years, as I rarely like more than three tracks on one CD album. I’m sure some day soon, we’ll be able to buy a disc at any store or vending machine, with as many selected track from multiple artists, without all this draconian interference from the record labels preventing such sales. If they don’t want to see the “tail” vanish completely, that is.
If they’re hoping to apply the long tail to other product lines. I can see how other manufactures mostly favor products with expensive “refills”, over ones that last a long time on a one time purchase. They’re using that old Polaroid camera sales model, with the ten shot film packs that cost more than the plastic camera ever did. I see these Swiffer mops with very costly refill bottles of cleaning fluid. And those self dispensing air fresheners, with their costly refill bottles of fragrance.
The problem with all this disposable refill sales stuff, extending the Tail. Is that it leads to greater pollution of our environment. Many of these bottles, disposable applicators and sponges aren’t recyclable. And take years to break down, if at all.