Charles Arthur On Technology

'With online versions nothing ever dies - a song can sit there for ever, and every sale means profit'
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The Independent Online

Here are three facts. Every one of the 1.2 million tracks on Apple's iTunes Music Store site has been downloaded at least once. A large-ish bookstore can carry 130,000 titles. More than half of the online bookstore Amazon's sales come from the titles ranked lower than 130,000. Put these facts together, and you have an indication of a phenomenon that has got analysts of the information economy very interested: the "long tail".

Here are three facts. Every one of the 1.2 million tracks on Apple's iTunes Music Store site has been downloaded at least once. A large-ish bookstore can carry 130,000 titles. More than half of the online bookstore Amazon's sales come from the titles ranked lower than 130,000. Put these facts together, and you have an indication of a phenomenon that has got analysts of the information economy very interested: the "long tail".

The concept behind the long tail is the flip side of something mathematicians and econo-mists have known about for some time, called the "Power Law". Here's how it works. Take 1,000 bloggers. (They should be easy to find.) Allow them each 10 links to any other of the same 1,000. One blogger will win the majority of links, because the others will rate him or her more highly than others. Then there will be nine of so others who fall into a second tier, who get a fraction of the first one's popularity. Then there will be 90 more making up the third tier. And of course 900 more who don't stand out particularly. The curve showing the number of links will have that dramatic falling-off shape so familiar from graphs of the exponential functions.

The Power Law always used to concentrate on the top 10: yet in real life, those 900 bloggers have useful things to say too. And the long tail of books, records and DVDs Amazon offers is what keeps it atop the real stores, which have to order your book if they don't have it on the shelves.

For mass media companies struggling to cope with a public increasingly distracted by the googleplex of internet sites, and their ever-expanding content, the long tail presents a problem only if you're stuck in the past, where the "short head" of top sites, blockbuster films and hit bands is all you can see. The rule of thumb for record companies, for example, used to be that CDs which sold fewer than 100,000 copies just weren't profitable on the global stage. Imagine being in a band where that's the challenge for your debut album. It's economics like that which killed the contracts for artists such as Fiona Apple and Macy Gray; doing well to begin with is no help, as both discovered. Yet for an artists like Tom Waits, whose earlier albums never sold big yet always sold consistently, fame has come late, yet big. Waits started in the long tail but became the head.

Happily, record companies have quickly come to recognise that digital downloads represent the perfect way to let the long-tail effect work for them. In record company parlance, any song or album released more than 18 months ago is "catalogue" (or "back catalogue"). The trouble with catalogue used to be that it was expensive to keep it alive. In a large record shop, anything that sells two or more CDs per year pays its way: that's the cost of rack space. But it's not economical to make a few CDs per year by a particular band. So any band whose album didn't sell would see it deleted, with future sales left to the tender mercies of specialist shops.

But with digital versions, nothing ever dies; a digitised song can sit there forever. Every additional sale is cream, where another costs nothing to produce apart from the hosting costs, but those are shared with every other song, of which there may be millions.

The film industry has also recognised that it makes more money on films sold on DVD than through cinemas. This too presents a marvellous opportunity to benefit from the long tail. With online retailers and hirers of DVDs like Amazon or any of the dozens of DVD online hire shops able to reach any individual, no matter how geographically disparate, the chance to make money back from a film that sank, or never even reached the cinema, remains.

Does the long tail apply to everything? No. With physical items, it's hard, if not impossible, to apply the economic model of "waiting for someone to come along". But despite that limitation, the promise of the long tail is to give us an online world where we really can indulge our wilder interests. That might not be what used to be thought of as "mainstream". But when more than half of the river is outside what was called the mainstream, it's worth exploring.

www.charlesarthur.com/blog

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