The Content Revolution: When It's More Expensive To Evaluate Than Release

from the getting-it... dept

Last year, responding to something written here at Techdirt, I got into an email argument with a law professor concerning whether or not the recording industry should be suing file sharers. Her argument was that without these lawsuits, musicians would be starving. She used the example of one particularly successful musician, who (she claimed) without having the industry sue on her behalf, would obviously be "flipping burgers in Kentucky." My response was, simply that there are thousands upon thousands of musicians who are flipping burgers (though, not all necessarily in Kentucky, and not all actually flipping the burgers, but you get the idea) rather than living up the good life with LA mansions and tabloid trash stories. The current business model of the industry is focused on just a very few hits. The industry even (recursively) uses this to justify what they do, claiming they take chances on a group of musicians, and only a few "pay off" by becoming superstars. Chris Anderson, editor-in-chief of Wired Magazine, is now explaining why that logic is not only faulty, but it's actually creating a smaller market for the industry. Looking carefully at statistics from a variety of sources that have thrived on content, he has written an article pointing out the value of "the long tail." Content sales take something of a power law structure, where the big winners are big winners, and everyone else just does so-so. However, by looking at companies that offer access to all those "so-so" offerings in the long tail, it's clear that, in aggregate, they can easily outsell the few "hits," and can do quite well in their own niches. For example: "The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon's book sales come from outside its top 130,000 titles." Now, what new technology has done is to drop the production and distribution costs dramatically, to the point that "it's more expensive to evaluate than to release." In other words, the industry implies their value is in figuring out which content to make, release and promote. What this article points out is that it's cheaper to just get the content out there, and let everyone be the filter. That doesn't mean there isn't room for help with production or promotion (which does require some filtering), but a recognition that the economics of the entire industry changes for the better when there is no scarcity (artificial or real) in shelf-space.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    dorpus, Oct 5th, 2004 @ 1:24pm

    Two questions

    1. Does the music market need to be any bigger than it already is? Do we suffer from a shortage of music?

    2. Maybe there really is a shortage of shelf space. Are music stores full of empty shelves, with not enough artists?

     

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  2.  
    identicon
    phoenix, Oct 6th, 2004 @ 3:39am

    Re: Two questions

    1. The problem is diversity of music rather than its raw quantity.

    2. Diverse music is being made but not played. The "shelf-space" of radio, television and music-playing venues is definitely artificially limited and reserved for benign trash with no balls. The shelf-space in record stores is less relevant as people don't go to record stores to *decide* what they want to buy - they generally come with their minds pretty much made up.

    The point is, the music industry is hurting me as a consumer by limiting my ability to hear a broad range of artists.

     

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  3.  
    identicon
    Katherine, Oct 8th, 2004 @ 6:10am

    Re: Two questions

    Diversity is exactly where businesses that rely on the "long tail" can help. Make distribution costs go away, and you can make it much easier to find (and make money from) the interesting stuff. Rhapsody, for instance, says that every single one of their top 400,000 tracks is streamed at least once a month.

     

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  4.  
    icon
    chris (profile), Jun 7th, 2006 @ 10:05am

    it's what i have been screaming about for years

    that the radio plays what *they* want you to hear, and we listen because we don't know any better.

    it's that way with all media.

    the companies only want to produce bockbusters, so media gets created according to a formula, and the end result is mediocre, expensive, and formulaic intellectual property.

     

    reply to this | link to this | view in thread ]


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