The Long Tale…

The Financial Times on Saturday reported MySpace‘s announcement that it will start selling music downloads, via a deal with Shawn Fanning’s outfit, Snocap. (There’s also a good piece in the NYT here.) In the short term, the service is unlikely to attract the big labels and mainstream bands because it lacks any form of digital rights management. In the longer term, though, I have to believe that it will give iTunes a run for its money – certainly with the Gen Y-ers – once it sorts out this issue and gets the labels onboard.

However, what really caught my eye in this article was a comment by Jupiter Research‘s David Card, discussing MySpace’s short-term prospects of making money from the service: “I’ve yet to see an entertainment company that can be successful by creating a business only out of the ‘long tail’ with no hits.” Check out more of Card’s analysis here.

Card’s opinion obviously contradicts the accepted wisdom of Chris Anderson’s Long Tail theory. The theory goes that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough (description courtesy of Wikipedia.)

The Internet, with its unlimited shelf space and lower overheads, has for sure made it economically viable to sell less popular or niche products. But I’ve always been slightly sceptical about the Long Tail’s claim that these products can collectively outsell the big hits. Even in the online world, I’d wager that the 80:20 rule still applies.

Technorati Tags: MySpace, Long Tail, Jupiter Research