The Long Tale…

September 5, 2006 at 3:36 pm 1 comment

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.

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Entry filed under: Marketing, The technology biz, Web 2.0.

Old world PR tactics live on No stomach for another social networking site

1 Comment Add your own

  • 1. Gavin Clarke  |  September 6, 2006 at 10:54 am

    Long tail is a great idea, but old-world rules apply here.

    The companies dealing with MySpace, YouTube, Spiral Frog etc are some of the wold’s biggest owners of media and entertainment. They employ smart people to make and market hits. You Tube will capture the blogosphere’s imagination with OK Go, but it takes sustained push and money to make an impact and a profit.

    Chris Anderson is right to talk about the fragmentation of the media, which is challenging entertainment companies and forcing them to find new channels to market. He’s right to talk about some kind of market alignment.

    But long tail does not take into account the need for the investment required to turn lesser hits into long-term success. It assumes hits are organic. They are not – they are constructed. As the big media companies know.

    Reply

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