What if I told you there was a marketing theory out there that was so intriguing that most of the music industry and a lot of big-box companies who sell things through digital means swear by it? What if I also told you that people in cultural creativity (music, writing, art, etc…) still keep it in mind while pushing their own work and marketing? What would you think if I told you that even though the ideas born from the theory are important – the actual concept is a failure? Welcome to the Long Tail Theory.
Long Tail Theory is an economic theory that was formulated by a person who wasn’t an expert in the field. Since its introduction, the theory has been invalidated. However, lessons learned from it are still helping drive digital markets – especially digital music and recommendation-driven marketing.
But that is just the very basic answer. If you want to know more, I can break it down for you.
What is Long Tail Theory?
In 2004, Chris Anderson of Wired Magazine popularized the statistical or economic term “long tail” for online marketers, explaining that in a digital era of the unlimited web “…shelf space, products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters if the store or distribution channel is large enough.”
Overall, Long Tail profit occurs when sales are made for goods not commonly sold. These goods can return a profit through reduced marketing and distribution costs. In the same reference, “hits” or current blockbusters that are released and made popular are called the “Head”. See the graph below for a visual explanation:
At the time of the article, this theory was driven by a few examples that worked and also the budding digital commerce of the new century. Anderson used a book to illustrate:
“In 1988, A British mountain climber named Joe Simpson wrote a book called Touching the Void, a harrowing account of near-death in the Peruvian Andes. It got good reviews but, only a modest success, it was soon forgotten. Then, a decade later, a strange thing happened. Jon Krakauer wrote Into Thin Air, another book about a mountain-climbing tragedy, which became a publishing sensation. Suddenly Touching the Void started to sell again.
Random House rushed out a new edition to keep up with demand. Booksellers began to promote it next to their Into Thin Air displays, and sales rose further. A revised paperback edition, which came out in January, spent 14 weeks on the New York Times bestseller list. That same month, IFC Films released a docudrama of the story to critical acclaim. Now Touching the Void outsells Into Thin Air more than two to one.
Particularly notable is that when Krakauer’s book hit shelves, Simpson’s was nearly out of print. A few years ago, readers of Krakauer would never even have learned about Simpson’s book—and if they had, they wouldn’t have been able to find it. Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion. The result: rising demand for an obscure book.”
Was it probable? Possibly. In turn, a lot of marketing strategies have been based on this theory and a lot of the music industry bought in. Before this situation was pointed out, consumers and also distributors and retailers had a mindset that only “hits” or the “newest and most popular” items should get shelf space. And that space was limited until the early 2000s.
The digital marketplace grabbed hold of this theory with wild abandon. Places like Netflix, Amazon, and iTunes were especially happy to make sure they had plenty of what was referred to as “infinite shelf space” for those misses that might still turn a profit.
Usually, though, the idea is that the “hits” in the Head of the graph will make the big money immediately and then die off to join the back catalog of songs that are still fondly remembered and who might grab new fans once they have been discovered again (thanks to a recommendation these days).
That catalog might also hold niche material, specialized genres, things that never quite made it anywhere, but might be something someone would like if discovered. And that backlog generates a steady profit that continues on the Long Tail of the graph.
Venture capitalist and former music industry consultant Kevin Laws stated of Long Tail Theory, “The biggest money is in the smallest sales.”
Anderson even wrote a book about this theory, but he focuses co much on books rather than music. However, the music industry bought in.
How did music companies disprove Long Tail?
As Richard MacManus of Cyberculture pointed out in his 2019 article, “…in today’s cultural world, where Marvel movies dominate and tech company algorithms all but ignore independent creators, the Long Tail theory is more like a fairy tale than a reality.”
It also happened with streaming services. They use Long Tail and keep some nostalgic favorites on-board their services to go along with their newer and more popular hits. But, has it changed the landscape toward those backlogs and indies?
As big players like HBO and Disney have hopped into the ring, more and more independent streaming services have had to throw in the towel. This is also happening with a lot of podcasts, wherein if an independent is doing well, they are getting picked up by a corporation. Or in some cases, driven out.
According to Long Tail Theory, this wasn’t supposed to happen.
Terrier Matthew wrote an article in 2019 for 5Mag.net wherein he explained, “Economist Will Page working with Andrew Bud and Gary Eggleton was able to obtain somewhat anonymized transactions from a ‘large digital music provider’ rumored to be either Rhapsody or iTunes itself.” The data was gotten and began being analyzed as early as four years after Anderson’s theory had been born and then popularized.
According to Page, “We found that only 20% of tracks in our sample were ‘active,’ that is to say, they sold at least one copy, and hence, 80% of the tracks sold nothing at all. Moreover, approximately 80% of sales revenue came from around 3% of the active tracks.”
You see, that “infinite shelf” for the niche, new, and backlogged music that people were thinking would be profitable on the long tail is actually always being affected by algorithms in the background. And those algorithms put what they want and think the consumer wants before everything else. So… hits on the head.
By 2008, Chris Anderson finally admitted that “…it’s hard to make money in the Tail. The revenues are disproportionately in the Head. Perhaps that will never change.” Brave words for someone who had part of his career riding on this theory.
According to research by Mark Mulligan of Midia Consulting, the top 1 percent of artists – the likes of Rihanna and Adele – account for about 77% – 80% of recorded music income. And this is despite listeners having more choices.
Beatport purged their massive catalog of music in 2019, something Traxsource had already been doing. I mean, why keep things that have never even sold a single copy in years? They had kept these things around and spent a lot of money to do so (there really is no such thing as infinite shelf space – kind of have to pay for servers to store things on) because of the theory. And the theory was wrong. At least in this instance.
So theorizing that with the advent of more digital media and more shelf-space there would be a trend toward the “long tail” being more profitable than the “big head” was incorrect. However, there were some things that Anderson pointed out that are still being used to successfully boost the artists still riding on that long tail…
What portion of Long Tail Theory works?
Let’s review: Long Tail profit occurs when sales are made for goods not commonly sold. These goods can return a profit through reduced marketing and distribution costs.
The good news is that in some areas, the ideas made from the theory are helping promote new and upcoming artists as well as create new fields in marketing.
Popularity is still rewarded. Algorithms make recommendations based on what is popular and what is popular is driven by not just likes, but also often by what artists are supported by other celebrities or the mainstream industry. A lot of large internet platforms are promoting mainstream content (the Head not the Long Tail) because they know it will be popular. What needs to happen is a shift within these companies to focus more on indie content.
We’ve seen that happen. Since the pandemic, as mainstream productions fell off in the wake of closed-down concerts and movie theatre openings, the international audience has turned to new content for their enjoyment. As Anderson originally pointed out in 2004, “Consumers are shifting to less mainstream sounds. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).”
Recommendation lists can actually work for the lesser-known creatives and drive sales for them, even if the popular title has to be seen first.
I believe Long Tail Theory opened the door for habits and marketing that definitely does work.
Take niche marketing. Sure, the big dogs still pushed what they felt would be popular and those hits were the mainstream babydolls. But the industry was also aware of targeting their wares toward only the markets that were interested instead of taking the shotgun method, which made for lackluster results. With digital media marketing, recommendations could be made that highlighted commonalities in products, and the audience of a marketing campaign could be chosen. Long Tail Theory gave people confidence in taking this chance.
I believe it shows us what can happen when we have popular works (music, movies, shows, or books) that then have a recommendation system backing them up. Popular items are still going to get the most sales, but what is then recommended because of the purchase also has a chance to make a sale.
Does this warrant keeping a huge back-catalog of songs that haven’t sold anything in years? Maybe not. There should be a limit somewhere. That’s a business decision; one that Traxsource and Beatport have been making every few years.
Chances are when you first learn about metal music, you’re going to be introduced to it through bands like Metallica and Disturbed and System of a Down. It’s not until after you’ve heard these mainstream bands that you then go looking for more and maybe also listen to the recommendations of the algorithms to find folk metal like Finntroll. Next thing you know, you dive down that rabbit hole and your recommendations listing pops up with The Sidh, GYZE, or The HU.
But does that mean you spend more on them than the others? According to research, no. But you have at least found them and can now make your own choices about it.
When I write about an artist that is not mainstream but sounds similar to a mainstream artist, I’m constantly thinking of which mainstream artist to compare them to. Why? Because of those keywords. Searchability helps drive people to things they like and therefore drives sales. But that isn’t sustainable without the mention of the “hit” to begin with. It’s definitely some sort of phenomenon, possibly influenced by Long-Tail.
And let’s not forget those featured artist connections! This is an obvious use of the Long Tail Theory that works. Mainstream artists welcome newcomers to feature on a song that will be played on mainstream radio or at the very least be promoted on the “hit” artist’s social media. The buzz then begins. It has even crossed genres for years. The new artists are on the long tail, capitalizing on the gains from collaborating with the mainstream artist who is part of the head of the graph.
In these ways, the Long Tail Theory has been successful, even if that’s not how the original idea was intended to work.
As always, if you want to share more, or feel I’ve missed something, let me know by emailing email@example.com.
AND – If you are looking for more great artists to learn about and support then be sure to check out my other articles here.