From The Times December 22, 2008 Long Tail theory contradicted as study reveals 10m digital music tracks unsold Digital sales figures dent niche market theory Patrick Foster, Media Correspondent The internet was supposed to bring vast choice for customers, access to obscure and forgotten products - and a fortune for sellers who focused on niche markets. But a study of digital music sales has posed the first big challenge to this “long tail” theory: more than 10 million of the 13 million tracks available on the internet failed to find a single buyer last year. The idea that niche markets were the key to the future for internet sellers was described as one of the most important economic models of the 21st century when it was spelt out by Chris Anderson in his book The Long Tail in 2006. He used data from an American online music retailer to predict that the internet economy would shift from a relatively small number of “hits” - mainstream products - at the head of the demand curve toward a “huge number of niches in the tail”. However, a new study by Will Page, chief economist of the MCPS- PRS Alliance, the not-for-profit royalty collection society, suggests that the niche market is not an untapped goldmine and that online sales success still relies on big hits. They found that, for the online singles market, 80 per cent of all revenue came from around 52,000 tracks. For albums, the figures were even more stark. Of the 1.23 million available, only 173,000 were ever bought, meaning 85 per cent did not sell a single copy all year. Mr Anderson told The Times yesterday that he accepted that Mr Page and his co-researcher, Andrew Bud, the head of mobile software company mBlox, had found a dataset in which the “long tail” principle did not apply. But he said further conclusions could not be drawn until the data and its sources were published.
