Has downloading revolutionised the sale of niche music?

[Welsh Rich]

Neat little article on the Guardian

 

Three guesses: what's topping the world's second biggest music download store. James Morrison? The Kooks? Snow Patrol? Razorlight? Paolo Nutini? Wrong! That'll be the current top five artist albums on the UK's iTunes Music Store. Compare that with the Top 10 albums on eMusic, the independent online store with an 11% share of the US download music market. There you'll find a somewhat more diverse selection, including Johnny Cash, Frankie Goes To Hollywood, Quantic, The Decemberists and the Gin Blossoms. OK, one is British and the other is American, but the differences seem clear enough: the former sounds like a playlist for the most dreary drive time radio show imaginable (you can almost smell the Richard Bacon/Jamie Theakston voice over) while the latter suggests online music buyers, faced with millions of tracks, are making more eclectic choices than in years gone by.

 

That, of course, is the overriding message of The Long Tail. Chris Anderson's much-publicised book aims to show how the internet is turning the 80/20 rule of retailing on its head. (Retailers traditionally make 80% of their sales - and usually 100% of their profits - from the top-selling 20% of products.) Anderson argues convincingly that "endless choice is creating unlimited demand" and, with a statistician's eye, examines how the likes of Amazon and iTunes, with their virtually unlimited shelf space, have transformed the world of books and music.

 

In the future, he suggests, cumulative drip-drip sales of niche products may become as important as the "hits". This is already happening in many online businesses, where collective fringe sales account for a healthy volume of business. But is this really the case? At a recent debate hosted by digital music consultancy firm MusicAlly, eMusic's chief executive David Pakman came up with a startling claim. He said that 10% of product on iTunes accounts for 90% of the store's total sales. Rather than smashing the 80/20 rule, the world's most popular download store appeared to be exacerbating it.

 

iTunes aims for mainstream

 

Pakman was not doubting that the Long Tail exists - he says it does - but suggesting iTunes is a bad example of it. iTunes does sell a reasonable volume of niche music, but as a mainstream music retailer, it markets to and mostly attracts mainstream music fans. The majority of these are drawn to the hits in the head, not the non-hits in the tail. They click, they buy, and then they leave. "For the most part, stores that are stocked with music from the majors tend to focus on mainstream music," he says. "It doesn't mean they don't carry a more diverse selection, but when you have Beyonce and the Pussycat Dolls you put them on the home page, and you market and promote that and use it on your advertising. By definition, that tends to attract youth and mainstream music buyers. They come to your site looking for the hits."

 

Scan the home pages of the UK's mainstream digital retailers and you'd have to agree. "Homogeneous" would probably be the most appropriate word: most have exactly the same content as iTunes, with tracks priced at around 79p and protected with DRM (digital rights management) - although Windows Media, not Apple's FairPlay. Tellingly, Woolworths' current top five digital albums are by James Morrison, Snow Patrol, Razorlight, The Kooks and Lily Allen. Little wonder, says Greg Eden, general manager of AIM Digital, the trade organisation for the UK's independent music sector, that iTunes' mainstream Windows Media-based competitors cannot break their nemesis's stranglehold. They offer few, if any, alternatives in terms of music and their tracks can not be played on an iPod.

 

There can be only one

 

Also, unlike the high street, online distribution means one supplier can dominate the mass market. "What you see on the internet is very much the 'Highlander Theory'," says Eden. "'There can be only one'. There's only one search engine, there's only one big book retailer, one big online auction house, and so on. That's not necessarily a bad thing, as long as it's able to supply a super hot service at a reasonable price."

 

So while there are many big name digital retailers offering more than a million tracks, few are offering incentives for their customers to discover music beyond the mainstream. This is where eMusic differs, says Pakman, and why it offers a better example of Anderson'sthesis. Its 1.5 million tracks include no major label music (although it does sell the Pixies, Arcade Fire, Funkadelic and Ray Charles) and so it attracts non-mainstream music fans.

 

Its business model also encourages these fans to experiment. For