The Music Industy and Distribution - Chris Anderson's Long Tail

o   Application of Chris Anderson’s Long Tail to digital music distribution

Chris Anderson defined the Long Tail as an economic state where products have a longer sales pattern when they don't rely on shop storage because they are either sold online (Amazon). If you add up all the revenue from the Niche market films, the profit can be greater or equal to the profit from one Blockbuster of best selling product. Pre-broadband Niche products were hard to find and expensive to buy, now online shopping/ sharing makes it easy to cater for everyone's taste.

An Amazon employee described the Long Tail as follows: "We sold more books today that didn't sell at all yesterday than we sold today of all the books that didn't sell yesterday."

Chris Anderson's Theory applied to Spotify.

However, on Spotify, there are 944 different genres, with thousands of different artists. According to Spotify, with 20 million subscribers, a "niche/indie artist" could expect to generate $1.2m a year in Spotify payouts, while a "heritage artist" would generate $2.6m.

However:

"Chris Anderson was right that the falling cost of distribution has made more music available to consumers than ever before: most digital music services have catalogues of more than 20m tracks." - (Quote taken from the Financial Times).

The long tail on Amazon music

It is hard to pinpoint the sales of various music genres. however, it is possible to prove that niche genres do have a place on amazon.

As you can see from the screenshots, Amazon prime lists 286,494 results for Pop music, and 37,699 results for New Age music. New Age is, obviously, a niche market, but there is still a decent representation of it on Amazon.

iTunes and the long tail

• iTunes was the first digital distributor of songs to have sold over 25billion tracks. 
• Anderson “With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried.”
• To dispute Anderson's theory- ' The top 1 per cent of artists – the likes of Rihanna and Adele accounted for a whopping 77 per cent of recorded music income in 2013, according to research by Mark Mulligan of Midia Consulting' (http://blogs.ft.com/tech-blog/2014/03/why-the-music-industrys-fat-head-is-eating-its-long-tail/)