The Long Tail theory is playing out well for music lovers

Broken CD

Background – anyone unfamiliar with Chris Anderson’s Long Tail Theory can check out his book, his original Wired article (which gets it down to five pages).

I was reading in the Economist this morning about the death of the UK record store. HMV and Virgin are both struggling, and Music Zone with 104 shops has gone into administration.

Part of the story is that supermarkets retailing the top 100 bestsellers now account for a quarter of all album sales. (This fat head apparently accounts for a third of the album market, so the supermarkets seem to have captured the lions share.)

The other part of the story is, of course, the internet. Etailers like Amazon now account for 11% of the market, legal download sites for 3%, and illegal downloads are on top of this. All the internet channels are growing fast, while the overall music market is shrinking as rising download sales can’t compensate for falling DVD sales.

One of the conclusions of the Economist article is that all this is bad news for small record labels and those who love their music. The argument is these companies rely on record shops to stock their music and knowledgeable shop workers to recommend them to punters.

I am not so sure about that.

It ignores the other side of music on the web – sites like LastFM, Pandora and parts of Myspace and Bebo are all about music discovery.

These sites are offering new ways for people to find new music – either via automated recommendations on LastFM or Pandora, or via recommendations from friends (in the internet sense of the word ‘friend’) with similar taste on the social networks.  I would say that these tools are better at helping lovers of niche music find what they are looking for – the internet is great at aggregating small niches.  Indeed I have friends that were struggling to get sales via record shops who now excitedly show me their MySpace sites and the traction they are getting (one of them even reads this blog – Hello Scott!).

So far from getting left in the cold by the demise of the record shop I think that niche music lovers (and I am one) are leaving record shops because they are better served on the internet.  More choice, lower prices and greater convenience.

Over at the other end of the market, mainstream music lovers are also doing well.  They get their music much cheaper from Tescos than they ever did from HMV.

This is the long tail theory playing out in practice, and it is good for consumers.  It is not good for legacy distribution networks – from record shops to record labels.  For music artists, I think it is a mixed blessing.  Some have very successfully embraced the internet (look at Lilly Allen – warning, this link is to her MySpace site which isn’t exactly easy on the eye!) but many others feel they are suffering from a lack of copyright protection.

As an interesting aside – I’m not sure why, but whilst record shops are in decline, book shops are in resurgence.

  • Re record shops vs book shops – books shops long ago changed the ambience, record shops haven’t.

    Record shops are still mainly crowded and unpleasant – not enough space between aisles, few recommendation suggestions – even “stuff the staff like” etc – very Retail 1.0. And of course, compared to the online alternatives prices are still unattractive.

    In London, with the exception of Fopp I know of no large record shop that sells coffee.

    Compare that to Amazon, comfortable and cheap. No brainer! A visit to Foyles, or Waterstones is actually pleasant – I have actually met people there for coffee, for example.

    By the way, if you go to shops selling vinyl records you get a totally different experience – and that is a rapidly growing part of the market

  • Re record shops vs book shops – books shops long ago changed the ambience, record shops haven’t.

    Record shops are still mainly crowded and unpleasant – not enough space between aisles, few recommendation suggestions – even “stuff the staff like” etc – very Retail 1.0. And of course, compared to the online alternatives prices are still unattractive.

    In London, with the exception of Fopp I know of no large record shop that sells coffee.

    Compare that to Amazon, comfortable and cheap. No brainer! A visit to Foyles, or Waterstones is actually pleasant – I have actually met people there for coffee, for example.

    By the way, if you go to shops selling vinyl records you get a totally different experience – and that is a rapidly growing part of the market

  • Scott Fraser

    For me, record shops are very much a social experience. They are also all about finding new music and finding that record that is just that little bit special, taking it out and playing it and watching people dance.. primitive instincts and all that…

    which brings me nicely to the internet.

    There are a couple of websites (www.Juno.co.uk probably being the best example) that have swung me away from the traditional record shop for most of my purchases (I am a self confessed music junkie as Nik will confirm). Juno is completely set up for the DJ and carries every new release (getting it very quickly) accross all genres and the pricepoint is less than my local store.

    Therefore I can sit down, have a beer and listen to potential purchases (sorry Lucy…!!) for as long as I want, whenever I want and then have them delivered to my home, ready to crack open the plastic and get them played out in their full glory.

    I also noticed in the Sunday times top new companies survey a couple of months ago that a record web site was in there…

    Small record stores will need to offer something different if they are going to keep up their volume.

    As for HMV, The Supermarkets and their high st counterparts..don’t buy from them.

    The service is poor and they have no real interest in breaking new ground.

    Hence why HMV is struggling.

  • Scott Fraser

    For me, record shops are very much a social experience. They are also all about finding new music and finding that record that is just that little bit special, taking it out and playing it and watching people dance.. primitive instincts and all that…

    which brings me nicely to the internet.

    There are a couple of websites (www.Juno.co.uk probably being the best example) that have swung me away from the traditional record shop for most of my purchases (I am a self confessed music junkie as Nik will confirm). Juno is completely set up for the DJ and carries every new release (getting it very quickly) accross all genres and the pricepoint is less than my local store.

    Therefore I can sit down, have a beer and listen to potential purchases (sorry Lucy…!!) for as long as I want, whenever I want and then have them delivered to my home, ready to crack open the plastic and get them played out in their full glory.

    I also noticed in the Sunday times top new companies survey a couple of months ago that a record web site was in there…

    Small record stores will need to offer something different if they are going to keep up their volume.

    As for HMV, The Supermarkets and their high st counterparts..don’t buy from them.

    The service is poor and they have no real interest in breaking new ground.

    Hence why HMV is struggling.

  • What is just as interesting is the ‘long tail’ of LIVE music. Bands already can’t make much by selling recorded music, so lots are switching over to live performance and merch. THere is a revolt brewing against TicketMobster now with their control of the ticket market and exorbitant fees – small bands need a way to monetize concerts.
    EVen STubhub is too much effort for the smallest bands. Myspace has around 2 million tiny local bbands on it which are under the radar of sites like last.fm. The only ones I’ve seen ‘mining’ that are http://gruvr.com . Is anyone looking at the tickets aspect of the local live music?

  • Radiohead head

    What is just as interesting is the ‘long tail’ of LIVE music. Bands already can’t make much by selling recorded music, so lots are switching over to live performance and merch. THere is a revolt brewing against TicketMobster now with their control of the ticket market and exorbitant fees – small bands need a way to monetize concerts.
    EVen STubhub is too much effort for the smallest bands. Myspace has around 2 million tiny local bbands on it which are under the radar of sites like last.fm. The only ones I’ve seen ‘mining’ that are http://gruvr.com . Is anyone looking at the tickets aspect of the local live music?