The long tail of P2P
Economic Insight
Prepared by Will Page,
Chief Economist PRS for Music
and Eric Garland, CEO BigChampagne
Disclaimer:
This material has been prepared by Will Page at PRS for Music
for information purposes only and should not be relied on for
any other purpose. It does not constitute the view of the
Management or the Boards of MCPS, PRS or any associated
company. It is provided for the information of the intended
recipient only and should not be reproduced or disclosed to any
other person without the consent of the PRS for Music PR
department. For further enquiries, information, and to request
permissions, please contact:
press@prsformusic.com
Issue 14
14.05.09
The theory of the Long Tail first came to light in
Wired Magazine in October 2004, as legal digital
music services like iTunes and eMusic were
taking off. However, illegal music services like
Napster, Grokster or Kazaa had been around,
providing digital music fans with a massive
choice of music catalogue long before such
choice was legally provided. As a result, the
well-known anomaly of the digital music world
was reinforced - legal services constantly play
catch-up with illegal services, and the
enforcement of copyright persistently lags
advances in technology. With these issues in
mind, and the infamous Pirate Bay still very
much in the news (and still on folks’ desktops),
what does the Long Tail distribution profile of
hits and niches look like in the world of massive
choice that is P2P? Will Page teamed up with
BigChampagne's Eric Garland to figure it all out.
The following Insight paper is a bit longer than
those previously released by PRS for Music.
As such, we thought it best to give the reader,
upfront, a sense of where we are headed. In the
first section of this Insight paper, we will be
releasing the results of a critical inquiry into the
music usage patterns within file-sharing
networks. Particularly, would a so-called long
tail or a pinhead pattern describe the relative
popularity of music files within these networks?
In the second section of this paper, we will dig
into the 'Wherefores' - particularly issues of
supply and demand - underlying the usage
pattern we found. In the final section, we will
consider long-term trends in P2P activity
alongside some new behaviours that seem to
be emerging. We will then wrap this discussion
up with a few final thoughts on the 'paradox of
choice'.
The Long Tail, a brief introduction
The original Long Tail concept, as laid out by Chris
Anderson in a famous Wired Magazine article in
October 2004, goes like this: if you offer people more
choice, and help them make that choice, they will take
that choice. It proposed that in a world of widespread
Internet access, it no longer makes sense to cater to
the public appetite for the most popular CDs, DVDs
and books. Instead, even the interests of the smallest
niche might now be served. The lower cost of reaching
customers online enables thousands of otherwise
unprofitable niches to be profitable. From an economic
perspective, this shift in costs would change the
'distribution profile' of transactions in any market to
that of "selling less of more." The tail of available niche
products would lengthen (supply-side effect) and then
fatten with sales (demand-side effect). And so the
"Long Tail" emerged.
Physical store
inventory of
52,000 tracks,
or 4,000 albums
Extra 1.5m items
in digital sales
Acknowledgements
The authors would like to thank Joe Fleischer
and Adam Toll at BigChampagne and Gary
Eggleton, Chris Carey and Eric MacKay at
PRS for Music, all of whom made invaluable
contribution to this work. David Touve was
especially helpful in providing insights,
suggestions and editorial revisions to the
work, and for helping bring it towards a
conclusion. Finally, a special note of thanks
is due to Andrew Bud, Executive Chairman
of mBlox, who inspired much of Will's
earlier work on the log normal distribution
and continues to help the PRS for Music
make sense of the unrivalled data sets it
has access to.
About Eric Garland
Eric Garland is co-founder and Chief
Executive Officer of BigChampagne Media
Measurement, a privately-held technology
and metrics company specialising in online
media. At present, BigChampagne's available
metrics include online retailers (iTunes),
social networks (MySpace, YouTube), portals
Yahoo and AOL, Clear Channel, MTV and
through strategic partner Mediabase,
traditional broadcast. Garland is recognised
as one of the industry's leading authorities
on the intersection of popular entertainment
and technology.
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