Universal's Long Tail music experiment

Earlier this week Universal Music released some initial results from its experiment in tapping its deep archives to measure Long Tail demand for older music (European music, in this case). Unlike most traditional backcatalog re-release efforts, which lead with CDs, Universal made these tracks available only as downloads to keep the costs as low as possible. The aim was to go further down the tail than the economics of physical media and traditional retail would allow, which makes a lot of sense.

The Long Tail equation is simple: 1) The lower the cost of distribution, the more you can economically offer without having to predict demand. 2) The more you can offer, the greater the chance that you will be able to tap latent demand for minority tastes that was unreachable through traditional retail. 3) aggregate enough minority taste, and you'll often find get a big new market.

The key here is that the digital download market is now big enough to make digital-only music distribution a viable approach. Clearly that market is only going to get bigger, so I'd expect many other music labels to follow this approach (as they're already doing with their digital-only labels for new releases of smaller bands, an effort that was led by Warner's Cordless "elabel" and Universal's UMe)

The music released in Universal's European backcatalog experiment stretches back three decades, including tracks from the 1960s, such as Brigitte Bardot’s interpretation of the Jane Birkin/Serge Gainsbourg hit, Je T’Aime Moi Non Plus. 

Here's are some excerpts from the company's press release. I've got a call in to the head of the program and will update with more details when I've spoken to him.

"Online music fans have downloaded more than 250,000 tracks of previously out-of-print recordings by European artists since the launch of Universal Music’s pioneering digital catalogue reissue programme earlier this year....

Universal Music Group International launched its download-only reissue programme in February, as the first step in a multi-year drive to reinstate more than 100,000 European deleted recordings.  The initial offering comprised more than 3,000 out-of-print tracks from the company’s vaults in the U.K., France and Germany.  They were made available through online music services in 20 countries, mostly in Europe.

Overall, these results lend weight to author Chris Anderson’s The Long Tail theory.  In his recently published book of that name, Anderson contends that given the growing choice and diversity of music that is legitimately available through the Internet consumers will be increasingly drawn to recordings beyond current hits.  In this scenario, the total sales of this repertoire (the long tail) can match or exceed those of the hits.

The second batch of deep catalogue reissues is due online in late November, and will include music by Maurice Chevalier, the Christians, the Frames, the Max Greger Orchestra, Mory Kante, Peter Kraus, Lulu, Baaba Maal, Robert Miles, The Orb, Henri Salvador, Savoy Brown and Charles Trenet, among many others.  In addition, Decca Records will be reinstating more than 400 out-of-print classical albums.

Olivier Robert-Murphy, Vice President of Strategic Marketing at Universal Music Group International, said, "It’s easy for our consumers online to find and download current artists and current hits, but through this deep catalogue reissue programme, we are now able to respond to and quantify the appetite for more eclectic, diverse recordings from the past.  It’s clear that this is a ‘tail’ worth chasing."

 

MOST POPULAR ARTISTS BY TRACK

1. Noir Desir
2. Chris de Burgh
3. Gun
4.  Eddie & the Hot Rods
5.  Del Amitri

MOST POPULAR TRACKS

1. Gun, Word Up
2. Eddie & the Hot Rods, Do Anything You Wanna Do
3. Brigitte Bardot, Je T’Aime Moi Non Plus
4. Freak Power, Turn On Tune In Cop Out
5. Cast, Guiding Star

MOST POPULAR ALBUMS

1. Big Country, Steeltown
2. Fairport Convention, Meet On The Ledge
3. Jacques Brel, Ballades et Mots D’Amour
4. Freak Power, Drive-Thru Booty
5. Nana Mouskouri, Les Plus Beaux Noels du Monde

Comments

[Gregory Talon]

Myspace is gonna really taking part of long tail concept accross Music sells. I think Apple will be impacted by myspace music.
I had a Christian Dussard courses few days ago.

I'm trying to make a good articles about digital marketing of internet pure players.

http://gregorytalon.blogspot.com/2006/09/internet-marketing-investments.html

If you have some times to read it.

Greg

[Nick]

Mr. Anderson, I read your original article, read your book, check here every so often, and saw you speak in at the NYPL with Prof. Lessig. I know your "background is physics and economics" and that you "tend to go for data rather than speculation and hand waving," but I keep getting the impression that you think the long tail is an unquestionably good thing. This Universal thing can only bode ill for the public domain and sane copyright term limits, things that are in the public's interest as citizens, but not necessarily in its interest as consumers. Now Universal has tasted the blood of the long tail and I fear the rest of us are worse off for it (unless you've really been dying to get your hands on Eddie and the Hot Rods). Please share your thoughts or point me to where you've discussed the larger implications of your idea beyond making money off obscure goods.

[Jeff Osborne]

Hi Nick,

It was difficult for me to figure out what you might be trying to say above. I thought your effort to establish credibility in the beginning of the comment was solid. The quotes were also a fair move. But once you started in about the "Universal thing" it felt as though the comment became a mildy righteous tangle of several different ideas.

And they're interesting ideas. Could you please clarify?

Are you suggesting that identifying commercial value in otherwise unreleasable back-catalog media is bad because it reinforces copyright holders' incentives to lobby for insane copyright extensions?

If so, are you then accusing Mr. Anderson of being complicit in what you view as a corporate/capitalist campaign to usurp ever greater shares of the public domain?

It's possible that I've misunderstood what you were trying to ask. It's also possible that you've conflated Universal's efforts to co-promote the Long Tail book with a broader trend that certainly predates the study of online economics.

What do you think?

Thanks for the comment.

Jeff

[Julian Bond]

Take this Back Catalogue idea. Combine it with AllOfMp3's model. That is cheap, DRM free, choice of encoding, priced by the megabyte. Now extend it to every bit of audio that has ever been released. Want to bet that won't make a lot of money for someone?

[Julian Bond]

So where's the link to the download site? How do I participate? And why is there no link in the press release?

[Nick]

Jeff,
Thanks for calling me out on my comment which was a bit sloppy and hastily written. I'm certainly not accusing Anderson of being "complicit" in Big Content's copyright campaign and think that identifying value anywhere is good. Hopefully this is a bit more clera, but my basic question is: what does the long tail mean beyond simple economics?

Clearly, now that Universal has seen what the long tail can do, it has a much greater interest in getting its archives out into the world. And yes Jeff, by identifying that value Universal does have a larger incentive to increase control over music that used to be useless to it. Lessig has called for mandatory copyright renewal as a way to ensure that unpopular material enters the public domain: the idea being that the cost of renewal will be worthwhile in some cases, not in others. The long tail changes this thinking since enough of the unpopular will still rival the popular economically. This may seem obvious, but then again, no less obvious than the long tail itself and its certainly a distressing thought.

There are many ways to tackle this "larger consequences of long tail theory" idea and I'd like to figure out the many sides to the argument. For instance, in commerce, the long tail is good for consumers (choice) and sellers (more profit), but the effect on competition may be bad, to the point it ends up hurting consumers in the end. Niche goods have always existed, but we've lost the niche store. At present, if the range of choice is a defining characteristic of an online business, the barrier to entry into markets seems much greater (one almost needs to start off with a huge selection to be taken seriously), and the kind of collusion that can cripple markets and technology (ie. Univeral suing Bolt and Grouper and not YouTube - which it now has an equity stake in) seems more troublesome. In essence, Universal is in a position to shape the future of online video because of its huge library, which the long tail says is all of a sudden valuable. Is that good? If not, why doesn't Anderson admit as much or caution against it? The New Yorker Review of the book saw the long tail as an oligopoly maker because of all that it takes to run a successful aggregation business. That can't be good, right? Or is there another side I'm missing?

Also, I'm curious as to how the economics of the long tail will effect us as consumers and as citizens, two sides to each person that are motivated by different considerations. Niche markets may lead to cultural fragmentation, which is argued to be bad for democracy, but I take heart in thinking that with too much choice people will still end up huddling around similar items, they just won't be told which to pick. Will our experiences as consumers shape what we expect as citizens? Anderson mentioned at the NYPL that it might lead to more direct democracy, like CA's referendum system. We've already seen an explosion of political blogs. Warhol made a big deal out of 15 minutes of fame, and look where we are. Now we are all famous to 15 people, which will lead us where?

I see Anderson's book as the beginning of an interesting discussion of the economic and cultural consequences of infinite choice. This may be too ambitious an idea to have made it into the book, but I think there are enough voices on the web (and on this site) to get some more ideas on the long tails effects. Though I'm not sure the best way to go about doing that. Anyone else up for it?

(Sorry for the length of this comment)

Nick

[Phillip Marzella]

What is interesting/shocking about the Universal’s press release is that it sounds like they’re surprised by the long tail theory (!) The concept - albeit not as well formalised as the book and articles – has been around for a while. And if it hadn’t, you’d think a conglomerate that large would be creating 'long tail-like’ strategies of their own.

What evidence is there that the long-tail has an impact on the distribution sector alone – ie will it change the distribution channels competitive landscape rather than make less known product available by the ‘same’ global players’ channels?

I.e. the same way that anyone with a word processor can write a novel can anyone with a broadband access become a distribution chain? Is there evidence of this or will the likes on iTunes, GooTube et al dominate the long tail by controlling distribution?

[Jeff Osborne]

Hi Nick,

Thanks for your thoughtful responses to my questions. I enjoyed reading them. We're in agreement on many points. The point about Grouper and Bolt was interesting news to me.

We differ in our view as to whether the internet is good for niche markets. Should be interesting to watch.

Thanks again,

Jeff

[Tyler arnold]

Niche goods have always existed, but we've lost the niche store. At present, if the range of choice is a defining characteristic of an online business, the barrier to entry into markets seems much greater (one almost needs to start off with a huge selection to be taken seriously), and the kind of collusion that can cripple markets and technology (ie. Univeral suing Bolt and Grouper and not YouTube - which it now has an equity stake in) seems more troublesome.

[Mr lv]

Mr.Chris:
I have read your new book--the Long Tail,and I'm also doing researching in internet field in People's Republic of China.However,it is difficult for Chinese to read ,because it is writted by English.So I'm very interesting to be authorized to publish it in the People's Republic of China.
I am a professor,subdecanal of management college in CAS,Chinese Academy of
Sciencer,and I have studied internet economics fou several years.
Because of the lack of your E-mail,If you are interesting in my request,please contact with me.My E-mail is benfulv@yahoo.com.cn.Thanks!
Best wishes!
Mr.Lv
2006.10.26

[Mr lv]

Mr.Chris:
I have an important thing to talk with you!
I have read your new book--the Long Tail,and I'm also doing researching in internet field in People's Republic of China.However,it is difficult for Chinese to read ,because it is writted by English.So I'm very interesting to be authorized to publish it in the People's Republic of China.
I am a professor,subdecanal of management college in CAS,Chinese Academy of
Sciencer,and I have studied internet economics fou several years.
Because of the lack of your E-mail,If you are interesting in my request,please contact with me.My E-mail is benfulv@yahoo.com.cn.Thanks!
Best wishes!
Mr.Lv
2006.10.26

[Mr lv]

Mr.Chris:
I have an important thing to talk with you!
I have read your new book--the Long Tail,and I'm also doing researching in internet field in People's Republic of China.However,it is difficult for Chinese to read ,because it is writted by English.So I'm very interesting to be authorized to publish it in the People's Republic of China.
I am a professor,subdecanal of management college in CAS,Chinese Academy of Sciencer,and I have studied internet economics fou several years.
Because of the lack of your E-mail,If you are interesting in my request,please contact with me.My E-mail is benfulv@yahoo.com.cn.Thanks!
Best wishes!
Mr.Lv
2006.11.1

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