Creative industries: Big head, long tail

Nick | 22 Dec 2008, 19:45

The Times today reports the results of a study by Will Page, chief economist of the MCPS-PRS Alliance and Andrew Bud, the head of mobile software company mBlox, claiming that “more than 10 million of the 13 million tracks available on the internet failed to find a single buyer last year,“ and that:

“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.“

Naturally, this has been presented as a challenge to the techno-utopian conclusions of the Long Tail and certainly it supports the concerns of many working in the creative industries, concerned about declining revenues from traditional retail models.

The study doesn’t disprove the Long Tail theory, indeed, it could be argued that 3m is a pretty long tail. As Peter Kafka argues here, the Long Tail is:

“a useful way to think about back catalogs. The Web means you can extend the reach of a product once it has had an initial run, and it allows aggregators like Amazon (AMZN) to make money by assembling lots of niche products at one storefront. It’s less useful for people who are creating albums, books, movies, etc., and need to get compensated for their work in the present tense.“

What the study does is underline the fact that creative content will always require the marketing and distribution infrastructure and expertise of specialist businesses to generate demand and revenue.  Advertising works and, even allowing for the power of search, social networks and citizen journalism, budgets build buzz. In other words, the blockbuster strategy (large corporates diversifying risk by investing in a range of creative content) will remain key to generating the wealth that will sustain jobs, investment and creative output.