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Anderson downgrades Long Tail to Chocolate Teapot status

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Long Tail

“The end came quickly,” as authors of morbid weepies like to say. On Monday WiReD magazine editor Chris Anderson effectively admitted game over for his “Long Tail”, the idea he’s been dragging so lucratively around the conference circuit for the past four years. In as many words, he downgraded it from “the future of business” to something that’s, er, not very helpful for your business at all.

“I’ll end by conceding a point: It’s hard to make money in the Tail,” Anderson wrote. “The revenues are disproportionately in the Head. Perhaps that will never change.”

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How to destroy the music business

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Put yourself in these hypothetical shoes for a moment. My goal is to make as much money as possible by doing as little work as possible. I have no creative talent except for generating and recycling marketing buzzwords. I have no technical knowledge or ability – but I can get my head around a Twitter feed. It doesn’t sound promising, but you’ll want in, I promise.

Now let’s imagine a business that can achieve our goals.

The natural place to start this business is on the internet – where one can harness the labour of millions of people and pay them sod all for their work. Under the smokescreen of “collective intelligence” or harnessing “the wisdom of the crowd”, we can keep our supply costs at zero. And if we can keep reminding these rubes that “power lies at the edge of the network” or “in the Long Tail”, they’ll produce lots of stuff for us for nothing, without complaining.

That’s the supply side sorted out. However, we need to attract an audience.

We know that the traditional vices – gambling and porn – will drive substantial traffic to our service. But gambling has regulatory issues – and porn takes us away from the mainstream. That leaves music – the stuff of life, and proven crowd-puller. So let’s make music the main feature of our service.

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Baidu sorry for medical scam ads

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Unlicensed music distributor Baidu has admitted taking money from unlicensed medical companies. Baidu dominates the search business in China, the bulk of its revenue coming from pay-for-placement in its search pages, which it calls “Page Rank Bid”. The company says it will now stop the practice, which accounts for 10 to 15 per cent of … Read more

The BBC’s Tragic Twitterers

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Rory Celland Jones

Here’s a conundrum. Top Media People want to come out of the shadows and get “closer to their listeners” – it’s what the Web 2.0 people urge them to do. BBC people in particular are obsessed with being seen to be bossy or “out-of-touch” – especially since three out of four license payers have a gripe with the corporation.

But the more of themselves media people reveal, the more the public sees them as clueless, self-referential and narcissistic bunch so many of them are. And the more time the BBC spends on peripheral New Media wankery, the more people wonder why they’re paying a license fee. You’d need a heart of silicon not to enjoy their agony. The poor souls.

At Monday’s “Radio At The Edge” forum at Westminster a panel of three: presenter Iain Lee, a Nathan Barley-type from Channel 4 called Dan Heft, and the BBC’s website’s tech blogger Rory Cellan Jones – better known as ‘Uncle Bryn’ in the hit comedy show Gavin and Stacey – all came to praise the glory of Twittering, Googling 24×7, and user generated content.

The audience was packed with BBC New Media employees – masters of JavaScript, and people who can say “social media” without blushing. So it all promised to be a swoon – with ritual noises of self-abasement from the broadcasters.

But what spoiled this was the panel’s chair, Fi Glover, who could barely contain her sarcasm or her scorn for the “Emperor’s New Clothes”, as she called it a few times.

Uncle Bryn took to the stage and spent the first minute taking pictures of the other panelists – and the audience – using his Blackberry. Asked what he was doing, he said he was trying to Twitter live that he was Twittering live from a panel about Twitter.

Over to Dan Heft, who reminded us that “you leave a trail of digital content out there”, but Bryn’s own trail had come to a halt – he couldn’t get his Twitter feed to work.

“I haven’t done any work – I’ve been blogging,” Bryn admitted, adding that he’d been “doing a helluva lot of Twittering”, too.

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Police vet live music, DJs for ‘terror risk’

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A dozen London boroughs have implemented a “risk assessment” policy for live music that permits the police to ban any live music if they fail to receive personal details from the performers 14 days in advance. The demand explicitly singles out performances and musical styles favoured by the black community: garage and R&B, and MCs and DJs.

However all musical performances – from one man playing a guitar on up – are subject to the demands once implemented by the council. And the threat is serious: failure to comply “may jeopardise future events by the promoter or the venue”.

UK Music chief Feargal Sharkey told a House of Commons select committee that the policy had already been used to pull the plug on an afternoon charity concert of school bands in a public park organised by a local councillor.

“No alcohol would be sold, tickets were limited to three maximum, and the councillor offered to supply eight registered doormen. Police objected on the grounds that the names, addresses and dates of birth of the young performer could not be provided,” said Sharkey, speaking to the Department of Culture Media and Sport’s hearing on venue licensing today.

“Live music is now a threat to the prevention of terrorism”, he concluded.

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OFCOM mulls legislation to save DAB

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Parliament may need to step in with new legislation, to save the digital radio fail whale OFCOM admitted today.

OFCOM’s Peter Davies made the comments in front of a critical audience at the Radio Academy’s Radio At The Edge conference today. Davies was put on the spot by moderator James Ashton. After years of trying to put a brave face on DAB, the OFCOM man all but admitted the British radio industry now needed drastic action.

“Yes, it will require legislation,” he said, in order to restructure the industry, and lower costs, so that commercial operators could survive.

Davies acknowledged he’d have no choice if the commercial operators all decided to revolt en masse.

OFCOM effectively forces national operators onto DAB by making it a mandatory condition of a new 12 year analog license. But DAB is nothing but a millstone – costing about 10 times as much as analog to broadcast, and with very few listeners. If all the commercial operators handed in their DAB licenses back to OFCOM at once, what would the regulator do? Davies said that may be the cue for action. But he did warn that legislation took a year to pass through Parliament, so even if the broadcasters revolted tomorrow, it would be 2010 before

Asked if Britain hadn’t leapt into digital radio too early – the rest of the world is introducing more advanced and efficient standards – Davies said it didn’t really matter, as radios using a common profile would be technology-neutral. Which is too bad for those of us with plain old DAB.

So how low is DAB listenership?

One radio exec, Daniel Nathan of Brighton-based Juice, even went as far as suggesting that listenership was so low on the new digital stations, it might as well not go out over broadcast radio at all. Nathan pointed out that most get around 10,000 to 15,000 per half hour, and big hitters like BBC Radio 6 barely topped 50,000, with peaks of 61,000 on Saturday mornings.

“We might as well move them to IP,” he pointed out.

“Five years ago DAB looked like the future – but the world has moved on,” he said.

That was one one of the nicer things said about digital radio yesterday at yesterday’s Academy event.

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The Long Tail can seriously damage your business

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The most comprehensive empirical study of digital music sales ever conducted has some bad news for Californian technology utopians. Since 2004, WiReD magazine editor Chris Anderson has been hawking his “Long Tail” proposition around the world: blockbusters will matter less, and businesses will “sell less of more”. The graph has become iconic – a kind of ‘Hockey Stick’ for Web 2.0 – with the author applying his message to many different business sectors. Alas, following the WiReD Way of Business as a matter of faith could be catastrophic for your business and investment decisions.

Long Tail
Anderson bet that the orange portion – the “Tail” – has more value than the red portion – the “Head”. But it doesn’t.

Examining tens of millions of transactions from a large digital music provider, economist Will Page with Mblox founder Andrew Bud and Page’s colleague Gary Eggleton, looked to see how large and valuable the “Tail” of digital music may be. They produced a spreadsheet with 1.5 million rows – so large, in fact, that it required a special upgrade to their Excel software (and more RAM) – and the three revealed their work at the Telco 2.0 conference this week.

They discovered that instead of following a Pareto or “power law” curve, as Anderson suggested, digital song sales follow a classic Log Normal distribution. 80 per cent of the digital inventory sold no copies at all – and the ‘head’ was far more concentrated than the economists expected.

“Is the ‘future of business’ really selling more of less?” asks Page. “Absolutely not. If you had Top of the Pops now, you’d feature the Top 14, not Top 40.”

As Andrew Bud explains:

“The Long Tail’s argument is that the pattern of consumption for media is bent out of shape by the limits of the shops selling them. Digital media lets the nature of people’s demand flow free. Well, we now know what the shape of that demand curve looks like.”

Bud told the conference that the basic shape of consumer demand for digital music clearly fits the Log Normal distribution, “with eye-watering accuracy”. That’s no surprise, he says, because so many sales curves he’s seen over the past ten years follow this distribution.

“Now we’ve seen what happens when tens of millions of choices are thrown in the air and people can go pick them up. What was astounding was the degree of inequality between the head and the tail – by a factor of three. It’s specifically the Log Normal shape that leads to a rather poverty stricken Tail.

“There are Tails where the Tail lives as a kind of welfare state. Not this one. You starve in this Tail.”

Digital sales follow a Log Normal distribution
Brown’s 1956 lognormal curve fits digital sales data much better than “The Long Tail”

This really isn’t the upbeat fairy tale message Anderson has spent four years selling on the conference circuit.

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A new economics of P2P file sharing

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What happens when you put three economists from the internet, telecomms, and the music businesses in a room and don’t let them out until they’ve agreed on something useful?

The Providers' Dilemma

A paper published by the research unit of the British composers’ collection society today gives us a clue. The first results of a “knocking heads together” exercise, entitled Shadow pricing P2P’s economic impact, doesn’t offer any ready policy proposals – partly as a result of compromise – but it does offer a framework that’s better thought out than most attempts so far.

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‘Parasitic’ Google feels TV’s wrath

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Your reporter holds TV executives in as much esteem as a flesh-eating virus. But even in the uniquely clueless world of television, they’re finally waking up to Google’s ‘parasitic’ nature. C4 chief Andy Duncan has become the latest to awake from his slumber. The problem? Duncan’s “cure” will probably only make Google stronger.

Duncan says that Google sucks billions out of the UK economy without making so much as a 30-second trailer in return. Duncan followed Michael Grade – who used the ‘P’ word – in voicing the criticism.

“Google should pay for content that it uses. The burden of responsibility should be on it to identify the people whose content it is using and make sure they are being paid for it, rather than expecting other people to point it out,” Duncan said.

Duncan also argued that because Google books so much advertising revenue it should regulated. This is muddle-headed and misses the point. In fact the call for regulation is likely to make Google stronger – at C4’s ultimate expense.

Contrary to what the company says, Google is in fact quite keen on regulation – when it hampers Google’s opponents.

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The New Green Aristocracy: Ben Pile

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Brilliant analysis on environmentalism and the legitimacy – Andrew. An aristocracy is a form of government by an elite that considers itself to possess greater virtues than the hoi polloi, giving it the right to rule in its own interests. Aristocrats were referred to as ‘the nobility’, or ‘nobs’. These days we prefer decisions to … Read more