Bob Baker's Indie Music Promotion Blog

News, notes and ideas on music marketing, self-promotion, artist empowerment and more

December 27, 2004

Are You Wired to Profit from The Long Tail?

Still think being an indie artist means you're small potatoes? Think again. An article in the October 2004 issue of Wired magazine has been causing a stir and forcing people to rethink the realities of modern entertainment marketing and sales.

Please read the article, by Wired's editor in chief Chris Anderson, and get a grip on the way indie, small-budget and self-produced products are weaving their way to end users -- while turning a profit!

Here's the gist of the article: The old way of marketing and distribution was based on physical scarcity. Entertainment products (music, books, film and video games) were primarily offered to the public through retail locations. Due to costs and space limitations, only the top-selling titles were stocked in stores. If a title couldn't justify its shelf space, it was eliminated. Hence the creation of lowest-common-denominator hits and bland superstars.

Many creative people and products obviously still found an audience via other means (live shows, word of mouth, creative marketing), but the mainstream sales channels were mostly unavailable to these "fringe" players.

However, in recent years successful Internet-based companies such as Amazon, iTunes, Netflix and others have turned the old business model on its head. While all three of the aforementioned web sites indeed sell the "hits," they also see the value in also offering lesser-known titles to their customers. And by doing so, they've seen some interesting results ...

People are willing to explore and try new things. Using posted review comments, ratings charts and personal recommendations, consumers are discovering new music, films and books they would have never found in a retail store.

And -- gasp! -- these fringe titles are profitable. Sales reports indicate that nearly one-third of these sites' revenues come from selections that fall well below bestseller status.

It's a fascinating read. Check it out here. Writer Chris Anderson is working on a full book on the subject. Read his Long Tail blog for updates.

posted by Bob Baker @ 1:13 PM   2 comments


At Dec 28, 2004 8:29:00 PM, Blogger Dave Cool/Stand Alone said...

Great article, thanks for posting it. It's yet another example of how smaller indie companies can thrive in what are usually thought of as corporate dominated industries. With the past 10 years of corporate mergers and centralization, as a friend of mine pointed out to me recently, it wouldn’t be surprising to see a period of fragmentation on the way in the next 5-10 years, as smaller companies continue to thrive and serve the needs of their customers much more efficiently. One advantage smaller companies will always have is their ability to adapt quickly and improvise on the spot, which I believe will become more and more of an issue, especially in industries dominated by new technologies like music.

At Dec 28, 2004 11:44:00 PM, Blogger scottandrew said...

Glad to see you got yourself a proper blog, Bob. Now I can add you to my newsreader.

I've seen a lot of commentary about the Long Tail article. Most of the reaction seems to be "hooray, we have value after all!" from those of us actually IN the Long Tail. I'm a bit more skeptical, since the ones who'll actually profit the most from the Tail will most likely be those companies that serve its needs. I suppose that should translate into more places for indie musicians to make a return, but personally I'm not convinced (yet) such ubiquity is entirely a good thing. We're already seeing this type of dilution in the digital music space. I guess it depends on the caliber of service, in which case it's not suprising that Amazon, iTunes and Netflix (I'd throw CD Baby in there as well) lead the pack in this space.

BTW, nice meeting you at 2NMC. And thanks for the ride back to the hotel. :)


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