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« From Exposure to Conversion - 'How to Create a Real Fan' - Part One | Main | Measuring 'depth of interaction' or "you can't eat web-hits" »
Monday
Jun232008

Digital music can’t be marketed, it can only be found.

Click here to read the update to this post.

With the exception of marketing music to naïve teenagers that consume anything that’s fed to them on FM radio, it’s becoming impossible to market music to people that know what they like.

In the old days, mystery, intrigue, celebrity, and real or imagined bullshit benefits could be baked into the product and into the packaging.  Record labels profited wildly by being experts at it, but digital music has changed all this.

Music is now the most naked product on Earth.  Music sits upon the shelf unwrapped, raw and void of packaging.  Consumers can fully try it before they buy it; they can take it home unmolested; and they can pay for it randomly, or not at all.  I can’t think of another product that is so fully exposed and vulnerable to quick and precise, pre-purchase decision-making as music.  You click.  You listen.  You buy.  It doesn’t get any quicker or more precise than that.  

I fully believe, of the five billion tracks sold on iTunes to date, a billion (20% or FAR more) have been sold to consumers that have NEVER seen the artist, have NEVER visited the artist’s website or MySpace page, and have NEVER had any interaction with the artist…other than exposure to a thirty second clip.  A billion(s) of iTunes purchase decisions have been driven off simple recommendation algorithms (those that liked X, also liked Y).  

Fortunately for artists that make great songs, the same naked qualities that make music impossible to market, also make music the easiest product in the world to recommend.  Once again, I can’t think of another product that has the viral qualities that are inherent in music.  It’s the only product where the entire product (the MP3) can be easily attached to the recommendation.  Try doing that with chicken nuggets.

In my mind (no jokes please), the greatest unintended consequence of being stuck with a product that can’t be marketed, and can only be recommended, will be the overwhelming desire to seek brutal feedback and rapid validation.  You can no longer say: it’s a marketing problem…when marketing was not an option.  The only questions worth pondering are: does this song suck?  If so, how can I make it better?  Nothing else really matters in the recommendation-driven world of naked digital music.

Reader Comments (38)

In my life, having a few beers and surfing itunes with my preloaded credit card has resulted in some disaster music (oh god, I used to love this song - well, I don't love it anymore) and some real gems (this song just gets better and better).

I totally agree that all my new music comes from blog recommendations and from friends. It makes me feel funny to think of my 13 year old self buying music I heard on the radio...

And all this makes it incredibly hard to market and promote when your audience will only give you a 30 second window in their media filled day.

If you're song doesn't suck try and put it everywhere - so you've got more ears listening to your 30 seconds.

June 23 | Unregistered CommenterAnnabel

Are you kidding? iTunes recommendation system is truly laughable! And a 30 second snippet can't sell an unknown song. I'd say not even one full play of an unknown song is able to sell it, unless you're The Beatles.

The rest of the article I can agree with, but the imaginary billion claim is too bold unless you have some statistical backing behind it :-)

June 23 | Unregistered CommenterJorge

98% of statistics are made-up, including this one.

I seriously doubt that "1-billion songs sold by the recommendation system" line. The thing is, Apple can probably say quite precisely how many songs were purchased due to their auto-recommendation software. Maybe someone should write and ask them nicely.

There's a big chunk of the iTunes store, first page, front and center, titled "Just For You". There's a reason why this recommendation feature occupies so much real estate. Put a number on your doubt 1%, 5%, 10% of sales? I say 20% of sales comes from people that found new music on iTunes, and never heard it elsewhere prior. I bet (dinner in Manhattan) that the number comes out higher.

You are right though - most statistics are made up everywhere.

June 23 | Registered CommenterBruce Warila

I have to disagree that music cannot be marketed. The reality of releasing music, especially in a country like New Zealand is that the traditional methods of releasing music are still the dominant methods. Radio promo releases, advertising, press releases, any number of other activities still have to be used to reach your audience, whether your a teenager or an old fart. Word of mouth and recommendation do play a part and are becoming more significant but traditional media exposure is still essential, or maybe that doesn't fall under the marketing umbrella? Some would also say that getting your music on to TV ad campaigns is part of marketing too, album sales of NZ artists who include a major TV ad as part of their album release have seen sales which I would attribute to this marketing strategy!

June 23 | Unregistered CommenterJ Bluevibe

I am guilty of "stumble upon" iTunes purchases. And like one of the previous comments, I have been burned by some :30 second bits but I more often go into iTunes with an artist in mind to purchase.

I also see J Bluevibes point above that traditional marketing has it's place and probably always will...but it is for a select few who fall into the core pop trend for the time...and this traditional marketing is and will continue to diminish also. (And it is not reserved to NZ, its global)

In essence I agree with Bruce that making better songs is foremost for the artist...but I also believe that the artist will need to think of creative ways to "package" and / or "accessorize" the recorded music...yes, to "market" it.

Not just web sites, multiple profiles on social networks...but two thigs specifically in addition:
1) "Facetime" - getting out and physically socializing, performing and getting to build a local community of fans that might "actually" know you.
2) "Product" - not just your recorded music but its packaging. Yeas it can be digital...but your recorded music needs to have additional data; written, graphics, liner notes, etc. etc.

Even if you do not want to create a physical package to present as your product of recorded music I really think it is worth the time to create some additional content attached to the audio to connect with your consumers / future fans.

Great music, innovative product concepts and strategic connections / networking
Those are the things that have / and will lead you to your goals as an artist in almost any decade...

But it is a bit like real work(!)

June 23 | Unregistered CommenterMilton

J, the difference between now and five years ago is ROI on marketing dollars. All of the promotion in the world can't hide a bad record. Promotion / marketing can help people "find" a great song I agree, but it can't budge rubbish beyond a core fan group or the demographic I mentioned. CD sales are declining everywhere and digital music is not filling the void. I would argue that people can try before they buy now, and that's one of the factors that's driving down overall sales.

One of the things I was trying to convey (perhaps poorly) is that all marketing and promotion is really just a form of navigation now, and that it has ceased to be effective as a selling tool. The only thing that really works is the play button...


June 23 | Registered CommenterBruce Warila

And is that play button a device that drives the fan / consumer towards a product?

As a merchant (musician) trying to earn a little income from their wares (songs); Does the play button lead that potential buyer to a product?

If so then what is the product?

I don't like to sound so capitalist...I just often wonder what product the musician is selling if it is not what the recorded music LP, CD, etc. once were?

This question is directed specifically to the idea of recorded music as a product and not including money from performance, merch not physically attached to audio, or use in commercials....Just the "music as product" part (see: concept album).

June 24 | Unregistered CommenterMilton

Marketing and promotion just navigation now...I do think you're onto something here, Bruce. However, as long as creating statistics, I wonder how many songs are sold via itunes that are NOT on a major or established indie label? That have NOT recieved airplay at least on indie (say,college) radio? Have NOT been performed extensively by a touring band (regardless the level)? In other words, how many songs are really bought independent of other traditional marketing/promotion efforts? While I agree we are headed that direction (slowly), and certainly recommendation programs will help (assuming artists create great songs), I welcome input on the above questions and how an artist can compete (actually sell music as product, as Milton aptly asks), in the meantime.

June 24 | Unregistered CommenterDg.

It may no longer be possible to market a song, but it's certainly possible (and possibly profitable) to market an artist.

June 24 | Unregistered CommenterMojo Bone

Good point on ROI from marketing spend and I for one am glad to see the days of labels being able to sell shit because of a huge marketing spend coming to an end. Surely now marketing and promotion are even more important to distinguish yourself from the huge number of other competing artists with the same sound as you worldwide. I work with a wide range of mostly independent artists and most of them are realising that making sure their songs are on music retailers homepages, featured in magazines, reviewed on blogs, highly rotated on all the national stations etc etc etc is even more important than ever. I dont disagree with your point Bruce I just think that you've gotta show people where the play button to your (and not somebody else's ) music is.

June 24 | Unregistered CommenterJ Bluevibe

Bruce,

I think you raise a good point, though it seems a little blunt edged. I think I'd just broaden the definition of marketing, and say that it's much harder to hoodwink people into buying a tune based on marketing alone. I'm sure a lot of people still buy music they aren't sure of due to peer pressure or the feeling that they're missing out - I've bought a few albums that I was told repeatedly are good, despite not liking the singles, because I respected the opinions of those telling me... some I later 'got', others still elude me.

I think it's a really GOOD thing that music can speak for itself, but I think it's naive to suggest that people don't come to music with preconceptions that our 'marketing' or just the story we tell about what we do will help frame. I've got a lot of listeners who were very surprised that they liked what I did, given that the idea of a 'solo bass player' was so far from anything they'd assume would be good. I told them about it, encouraged them to check it out (either personally or via my blog), and they found they liked it... I'm sure there are equal numbers of people who came looking for a more typical circus-monkey approach to solo bass who were deeply disappointed in my music because it wasn't what they were expecting, given that the collective marketing of solo bass is that it's supposed to impress you first and engage you second...

Marketing, at its best does 2 things - tells your side of the story around what you do, and resources your audience with information to pass on so they can word it their way when telling others about it. The tearable web makes it nice 'n' easy for them to forward, embed, tag and recommend stuff with either a clip, a full track or even (sadly, or maybe not?) a torrent file...

Even if the figure is 1 in 5, I'm more concerned with the other 4. I can't do anything for or about the 1, I can keep talking to the 4.

Steve

June 24 | Unregistered CommenterSteve Lawson

I agree with @Milton's comment that putting some effort into facetime and product will still help our cause as an artist/merchants. And as @Steve says, we can still talk to those who are using recommendations, research, radio, gigs, social media and all the rest of it to make their musical discoveries. There will always be more than enough receptive people out there to make marketing (ie. communicating; telling your story) worthwhile.

Good post, Bruce. ;o)

June 24 | Unregistered CommenterBen Walker

Steve,

I read your post a few days ago on your blog. That post became part of the inspiration for this post here. You said:

"As I’ve said many times, and will keep saying til people realise it’s true, I’m utterly reliant on word of mouth to get people to hear about what I do - both because I can’t afford broadcast ad-space and because I dip under the radar of most mainstream music media channels…"

This struck me as total truth. Without recommendations, you (and just about every artist) would be dead in the water. Your marketing can only carry you as far as the recommendations stop. If the recommendations stop three people into the chain, you have to start a new chain.


BTW - I was listening to your MySpace page as I wrote this post..

June 24 | Registered CommenterBruce Warila

Bruce,

I think the recommendations fall into that area of "facetime" / networking I mentioned. To explain further; I mean that digital (recommendations) or physical, facetime or genuine engagement with your audience/consumers is one crucial part of a "new-ish" evolution of marketing recorded music as a product.

The days of standing at a distance as a PR firm goes to work on the public on your behalf is (however slowly) coming to an end...I think even for the "majors".

The cult of personality really becomes a more intimate experience in the digital world. (irony?)

June 24 | Unregistered CommenterMilton


Sounds like a lot of fun.

Okay cool, so you guys do that, but I'm gonna find out where the value's going (because I dont see it hanging around copies of recorded music, and certainly not by the time google is telling us what music we like) and monetize it.

Probably with marketing.

June 25 | Unregistered CommenterMatt @ Kurb

Bruce, do you seriously believe what you are saying? What you wrote may be true for people who are passionate about music, but the casual listeners still are and will continue to be influenced by marketing. And they happen to be the vast majority.

A word about recommendations: marketing is all about recommending stuff to people and it's being done by the people who made the stuff (record labels), so they know it's good, right? In essence, if you can make thousands of people aware of an artist within a short space of time (several weeks perhaps) you are way ahead in the number of people who can start recommending your product to others. Hell, Apple need money too, so maybe you could pay them to feature your new songs in their recommendation engine. Need I say more?

Of course I believe that digital music can't be marketed. Although, I am playing with terms a bit to spark some conversation here.

You can market anything. However, music is NOW a product where all the features and all the benefits are fully exposed as the product sits on the shelf. There's nothing else to be exposed or uncovered. Artists should think about that because lots of people still operate in this industry as though that fact is not true...

Back to marketing. Only a nut would believe that exposure does not lead to sales. However, exposure costs money, and some reasonable rate of return is expected on every dollar spent on exposure. Because music is so exposed, raw and naked (as I said above), the ROI on marketing per dollar spent, generates the worst marketing ROI of any product I have ever marketed. Put another way, the ripples, or the concentric circles, die fast, and your marketing dollars don't go as far as you need them to go.

If marketing truly worked well, EVERY single record label would not be cutting back on staff and expenses. Music marketing is just not delivering enough bang for the marketing buck.

There is a solution. It's common sense (on the surface), increase marketing ROI through perfect targeting. The problem: extremely low margins force your targeting to be dead correct. You have to be picking the exact songs to promote to the exact audience, and without a high rate of failure. Or, if cutting down on the failure rate is not an option, you have to have a workable per-unit cost basis, plus enough volume/velocity to make it all work.

When I toss this salad around in my head, my advice to artists comes out as this: it's far better to focus your time and money on song quality and on making lots of songs, than it is to focus on any type of typical promotion (other than putting your songs everywhere and anywhere). Time spent in the studio, or money spent on a quality producer, will yield more return than the same investment spent on marketing tricks or promotion "experts".

I will stand by this assertion: The only questions worth pondering are: does this song suck? If so, how can I make it better? Nothing else really matters in the recommendation-driven world of naked digital music.

June 26 | Registered CommenterBruce Warila

Pop into W.H.Smiths, Waterstones or your local secondhand book shop and see all the readers, reading before they buy, or not! The book publishing industry has been travelling down this road for years. Amazon hasn't made it any easier. I know a book shop that sells books by the kilo, I wonder if they'll be selling CDs by the pound soon ;)

June 27 | Unregistered Commenterian

>> the MUSIC THINK TANK is EXTREMELY thought provoking >> THANKS!!!


A >> the days of the CD are over ...

B >> if you want to be *avangarde* / care about art/music .. >> use VINYL

C >> 10 people buying your vinyl *equal* 10.000 people downloading/dublicating your MP3 ..

D >> if you want to get beyond the *30 seconds prior to money and sex* you should not *live* in categories like marketing ...

E >> if you want to *sell* your music .. let someone else do it ..

F >> is it possible to do *in-depth / thought provoking* music AND sell in HEAPS .. ?

G >> musicians (artists) should not commmunicate with marketing people ...

H >> musicians communicating with marketing people may become craftsmen/women ..

from the future
Lord Litter

June 28 | Unregistered CommenterLord Litter

Incidentally, there's an article on Coolfer that addresses exactly this issue, worth a look if you haven't read it already: Research Disputes Value of The Long Tail

I saw that..

"Of the 3.9 million digital tracks sold in 2007 (the large majority for 99 cents each through Apple iTunes), an astonishing 24% sold only one copy, and 91% -- 3.6 million tracks -- sold fewer than 100 copies."

For every marketing dollar invested, it's very difficult to get a dollar back.

June 30 | Registered CommenterBruce Warila

Thanks for the heads up on The Long Tail...followed it to several articles...very enlightening. But to sell 100 copies and be in top 10% - then make a hundred bucks (gross sales, no less)...OUCH!! Flat tail, indeed...better not shut down the Think Tank - we need all the help we can get!!

July 1 | Unregistered CommenterDg.

Hi! Good post. I mentioned this on my blog post about artist promotion and new ways of management: http://orion.reaktio.net/blog/2008/07/where-do-artists-and-managers-stand/

July 1 | Unregistered CommenterOrion

Someone tell Ian Rogers. =)

July 1 | Unregistered Commenterrob lord

Music marketing isn't dead, but it has changed (and is thus a little harder to recognize)! The old models, which required a lot of capital and thus stressed ROI, have evolved. Now, as some of you have mentioned, music recommendation services and blog coverage are a cheap and effective for an Artist to get their music out. While some Artists need to hire PR peeps to get their music to those influential bloggers (we all know who these people/music snobs are), others are more patient and work their way up though the blogosphere. For the music recommendation services, I was able to add myself to most of them except for Pandora (those bastards), and iLike has proven to be the best for me. Its really about word of mouth/viral marketing, but hey, thats still marketing.

Another point...technology now allows for many more way for an artist to greatly engage his fans, and allow for a full experience of the music. This is done by creating value adds for the music, by coupling it with rich content videos/blogs/interviews/etc. Pretty much the more info the fan can sift through, the more loyal the fan will become. I also like what Radiohead, NIN, and Weezer are doing. The former with remix contests (what a way for complete fan immersion in your music) and the latter with the jam with weezer shows and the write a song with weezer youtube campaign.

One thing that hasn't changed is the notion of marketing your music through playing shows. This is the oldest trick in the book, and it works as long as you don't suck (and then it still might work b/c some people really like shitty music). The more live shows you play, the more exposure you get, the more people go to your myspace (or whatever website you prefer), and even if they don't buy your music, you have a chance to hook 'em as fans. Then, the word of mouth stuff kicks in. But, i think playing shows is still the best way to get things going!

July 1 | Unregistered CommenterGavroche

What the statistics don't tell us is what marketing budgets were involved.

The majority of records released to date, in any format, flopped. It's easier to track stats on iTunes than physical sales, so this may seem new. Of course, the big problem is that margins are so much lower these days. Which doesn't change the fact that nobody at no time can get by on selling 100 copies of anything.

I think the issue you are missing, Bruce is that ROI needs to be considered foremost in terms of recording costs. If you've invested several thousand dollars in recording something, then you aren't going to be content to sit around waiting until someone discovers it. That's where marketing comes in.
Unless you can generate enough public awareness around your product, it isn't going to sell. The reason I posted the link to the Coolfer article is that it shows primarily that the hits are where the money is. The vast majority of hits are songs that had huge marketing budgets and this isn't going to change in the near future. If you aren't prepared to spend a lot on marketing, you might as well stop recording, because you are simply not going to generate enough sales revenue to recoup your recording costs. Peer to peer recommendations won't cut it, they are simply too slow and random.

Incidentally, it has occured to me that if the title of this post is correct, then the folks at MySpace are doing something they can't. I see digital music marketing every time I log in there and it seems to be working if page views are any indication. ;)

Unfortunately page hits for the vast majority of Myspace pages are "rigged" via hit counter software...BUT, I agree that digital marketing is in full swing @ Myspace and I also believe it is working.

As it has always been with music; much of the cream rises to the top with or without a lot of marketing because it is "cream"...meaning it is quality music that generates it's own buzz because of the quality or because of the affect it has on the listener.

A lot of Punk and Hip Hop manage to find their niche income in spite of low quality recordings.

A budget for marketing is always smart but making the music should be every artists first concern...and hopefully the marketing budgets can continue to shrink in the digital age.

July 3 | Unregistered CommenterMilton

Music has been stripped naked, on that front I totally agree.

I also agree that artists should concentrate on quality over quantity and being selective in your set list should be number one priority.

Concerning marketing,the only money spent in promotion should be money spent on the road playing gigs.

July 4 | Unregistered CommenterGigDoggy

Wasn't quality over quantity always a factor though, especially in the analog years?

Vinil records had limited playing time. Recording cost a fortune. Only now can you afford to put out tons of material at nearly zero cost and, technically at least, better than twenty years ago.

I don't think that playing on the road is a viable alternative to other forms of promotion. For a start, how many people are you going to get at a show if nobody knows who you are? Most likely the majority of the audience are people who already know the band. That's okay if you happen to have a new release out, but it's not getting you any new listeners. Ads, airplay, magazine articles, TV appearances, videos and whanot on the other hand reach a much wider audience. Exposure has always been the key to success in the music industry and that's not going to change.

I agree with Milton, that musicians should be making music and that marketing should be left to the marketing people. I do however strongly advise against underestimating the need for marketing, just because we have the Internet. I'd even go so far to suggest that marketing has become even more important a factor now, simply because the offer has become so much greater. The Long Tail has shown itself to be a purgatory of sorts: you have a market presence, but the rewards are miniscule. The purpose of marketing is getting your product out of the Long Tail and into the small number of hits, 'coz that's where there's money to be made.

There is an upside though: if your concern isn't making money off music, you can disregard everything said to date. Get a day job to pay your bills, get your recordings on the Internet, play out as often as you can afford to. It's musically rewarding, you're master of your game and you don't have to worry about all the business nitty-gritty. There will always be someone who'll appreciate your music. If that's all you want, then all the ingredients are there for the taking.

It's a good thing that's all I want (just to make music for my own sake).

But on the off chance I do make money off of it; I really like the words above Krzy: "The purpose of marketing is to get out of the long tail"

I had thought until recently that the Long Tail was 100% positive for artists...recently I have begun to doubt this very much. It is still very positive in many ways but as mentioned above; it can be a purgatory of sorts.

July 4 | Unregistered CommenterMilton

ok
let me re-phrase what i meant. Of course you need some sort of following to go on the road. First off you need to work your home town for a least a year. Once you got a name for yourself, only then can you aspire to contact other bands for out of town gigs. And once you reached that point well for me that is where the long tail begins and where you are really gonna promote yourself.
People will get to know you if you tour with other band that they know, if your professional and dont bitch, and if you give it all you got even if you have to play in a pizza parlour.

On the side bands MUST follow basic web 2.0/social network marketing procedures, but to pay for promotion ...hmm seems far fetched, unless we are talking about attending pay-to-play shows, or promoting your own concerts. That is why i put emphasis on going on tour. If you're good and out going, people will notice you.

As for ROI, I believe that a band must really concentrate on its material before taking that into consideration. The passion (and originality) must prevail, mostly in the beginning of the project.


July 7 | Unregistered CommenterGigDoggy

Someone above said...

The vast majority of hits are songs that had huge marketing budgets and this isn't going to change in the near future. If you aren't prepared to spend a lot on marketing, you might as well stop recording, because you are simply not going to generate enough sales revenue to recoup your recording costs. Peer to peer recommendations won't cut it, they are simply too slow and random.

He does not understand what's changing in the marketplace. I know firsthand that just about EVERY company on earth that's involved in music, is rushing out to integrate Music Information Retrieval technology into their systems and platforms.

Eighteen months from now, great songs will stand a far greater chance of being found than ever before. Three years from now, the playing field will level even more. Five years from now, music information retrieval science will be integrated into every facet of the music industry.

YES, gatekeepers will still control the industry, but getting discovered will not be driven by promotion as much as it will be driven by quality. If you focus on marketing, and not on song quality and production, you will NEVER generate the same return as someone doing it the other way around.

In the world I want to create, producers and engineers will yield more power than the marketing department...

That was me, Bruce, and I'm afraid you don't understand that the marketplace isn't changing. :)

Here's a link to a paper on the long tail, published by Glenn at Coolfer: Rethink The Long Tail, read it if you haven't. Look at the figures, think about the conclusions. It's exactly what I've been saying all this time.

If you still don't believe me (or Glenn), I have a proposition: why don't you start a band and invest fifteen thousand dollars, or so, of your own money into breaking it and I'll write a blog of advice on how you can make the money back, which I haven't tried, but I'm sure will work in five years time... ;)

One of the takeaways of the Coolfer paper is that new channels enabled by the Long Tail are still easily dominated by hits, which as we all know, are largely driven by big-budget marketing and not necessarily quality product.

I’ve seen this happen first-hand at music sites like iLike and TheSixtyOne. Well-known, strongly-marketed artists easily shoot to the top of these charts, displacing lesser-known acts.

I have no doubt that recommendation technology is going to improve greatly and play a much bigger part in music discovery in the future. But I still believe aggressive big-budget marketing is going to have the edge for some time to come.

All the more reason for unsigned/indie artists to do everything they can to engage potential fans at the point of discovery, and not worry about monetizing the relationship until there's a sizable core of fans. Don't base your success metric on income until you've laid that groundwork.

July 11 | Unregistered Commenterscottandrew

Hi Bruce, as you know this is a subject close to my heart! I've just recently blogged about my attempt to make something easily findable on my blog - I was going to wait but there's no time like the present.

Basically - do something interesting. And before you even wait to see if it works, start working on the next one. That's what we're doing.

July 12 | Unregistered CommenterJulian Moore

Krzysztof,

I have tried the band marketing thing, and I have spent a lot more than you suggest. I am far more comfortable now with investing in songs, than in promoting standalone artists.. Read on...

Answer this question: How many dollars do you have to spend on music marketing to generate a single dollar in revenue? If blockbuster marketing worked, if the expenditure (on marketing) to generate revenue, to yield some amount gross profit - worked - if the formula worked, then record labels all over the world would not be struggling (mightily)! The facts are, blockbuster marketing on new acts does not yield the returns needed to justify doing it repeatedly, there's a high rate of failure, and the majors are surviving off of older acts.

Now let's look at the Coolfer/Elberse conclusions...

I have to respectfully disagree with Glenn from Coolfer on this one. Glen's (Coolfer) paper (Rethinking The Long Tail) is based upon Anita Elberse's (Harvard University) research and subsequent paper. Here are my thoughts on Elberse's research:

Like any statistical analysis, her analysis only looks backwards. It fails to take into account where we are in time. In the US, broadband penetration into the home is just now hitting 55%, and about 50% of this 55% barely use the Internet for anything but search. Now consider the penetration of Music Recommendation Technology into Music sites and offerings. I peg this number at 10% to 20%, and growing rapidly (and I am not just referring to Social Recommendation. I am also referring to computer-based (sounds-alike) recommendation). As these two numbers converge (broadband penetration, recommendation technology penetration), you will see the tail generating a lot more revenue. So, in other words, when it comes to music and video, it's early days for the tail to be yielding fruit.

Before I continue here... I just want to be clear that I agree that Gate Keepers will be controlling this industry from years to come. HOWEVER, it's exactly these people that will be the first to utilize every bit of technology available to be more productive; they have to, or they will go out of business. When I advise artists to focus on quality and not on marketing, it's from my absolute belief that GATEKEEPERS will find songs/artists to invest in using the technology that I envision them using (which I am dedicated to building). And, just to clearer, my technology (including the use of data from everywhere) makes it impossible to promote crap (as a strategy), and possible to find great songs that have been barely promoted!

Back to Elberse's research.. If I were a label or artist, I would not make wholesale decisions based upon her presentation or advice. Since Ali Partovi (CEO of iLike) did such a great job at attacking this bit of Harvard dribble, I will link to his comment here (scroll down), and paste his comment below.

I found Prof. Elberse's article misleading, and I strongly disagree with the conclusions she implies.

Her own research found that 68% of Rhapsody's sales came from titles not found in a Wal-mart store. This data *supports* the Long Tail idea! That a Harvard professor concluded otherwise is an embarrassment.

Mr. Anderson's response is too kind, citing differences in how one defines "head" and "tail." He's covering up a fundamental problem with Elberse's methodology: by using percentages (or deciles) of units to measure "concentration," Elberse essentially created a self-fulfilling prophecy.

Consider what happens if Rhapsody's catalog grows from 1 million to 10 million. Suddenly, the top 10,000 titles that generated 32% of sales represent not 1% but 0.1% of all titles. The top 100,000 titles that generated 78% of sales now represent 1% of titles. Suppose that total sales from this expanded catalog are double the sales from the original catalog. Elberse's methods would find that the top 1% now represents 78/2, or 39%, of all sales. Elberse would call this an increase in "concentration" -- implying that the catalog expansion was unprofitable and that the Long Tail theory has been debunked.

The whole point of Long Tail theory is that adding 9 million obscure titles to a digital catalog has negligible marginal costs, so *any* incremental sales would be profitable. Elberse's ill-conceived analysis completely missed this point.

Rhapsody, by taking the Wal-mart catalog and expanding it 100x, roughly tripled sales. If Rhapsody were storing this catalog in a physical warehouse, that might seem like a bad result. But the whole point of the Long Tail theory is that when you aren't held back by physical costs, a 3x growth in sales from a 100x growth in catalog can be profitable. But from Elberse's perverse view, any lengthening of the tail, almost by definition, would be seen as "concentrating" sales in the top 1%, unless it also delivers an arbitrarily high bar of incremental revenue.

Her statement, "customers give lower ratings to obscure titles," is similarly flawed. Elberse has taken large groupings of obscure products, averaged the customer ratings across the entire group, and found that products at the obscure end of the tail get lower ratings (on average). She implies that the "gems" found in the long tail don't compensate for the sea of mediocrity that they're surrounded by. Again, she seems to be holding the Long Tail theory to an arbitrarily high bar. So what if there are 100,000 mediocre titles in the lowest decile of a 1-million-song catalog? Given the costs of digital media, almost *any* incremental sales from those titles is incremental profit.

(Elberse also neglects to recognize that digital media helps quality rise to the top more quickly. On the internet, the best-rated "gems" can rapidly get more exposure, taking them out of obscurity and out of the tail. This is one of the great benefits of investing in the long tail! But a side-effect of this benefit is that as highly-rated items get elevated towards the head, then what remains in the tail will necessarily be lower-rated. Elberse would have us conclude that the tail is therefore less deserving of investment.)

There was one aspect of Anderson's original theory that I always disagreed with: the idea that a certain type of consumers have a preference for obscure items over popular items. I was glad to see Prof. Elberse's statement to the contrary: "there is no segment with a particular taste for the obscure; rather, customers with a large capacity for content venture into the tail." This reflects what I intuitively thought, and I'm glad to see analysis backing it up.

Anderson's original Long Tail theory deserved the popularity it gained, but unfortunately with that popularity came a level of hype -- people applying the concept with excessive fervor and expecting more from the long tail than it could deliver. (If you double your catalog expecting to see your sales double, then you are bound to be disappointed.) Elberse's findings may debunk some of that hype; but they do little to debunk the original theory.

Ali Partovi


July 13 | Registered CommenterBruce Warila

I know a book shop that sells books by the kilo, I wonder if they'll be selling CDs by the pound soon

Which really sums up Bruce's argument about quality. A book shop moving their product by weight is obviously overloaded with really shitty product, because if they had a well-cultivated collection of quality merchandise, they'd be making more money with less weight. You can get good money for good books, and music is no different.

August 2 | Unregistered CommenterJustin Boland

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