July 25, 2005

America's record store, like it or not

DailywalmartWhen I was a slacker twentysomething, I, like many of my slacker twentysomething kin, worked in a record store. It was a pretty big record store in the business downtown of Washington DC, part of a chain that no longer exists and whose name now escapes me. It catered mostly to the lawyers, admins and paralegals who worked around there, so it was pretty mainstream, but I still remember the aisle of import records (mostly British new wave, since it was the mid-80s) that stretched the length of the store near the stool where I sat watching the door and answering questions. The entire back wall was 12-inch singles, and classical had its own room, with excellent acoustics for refined listening.

    This all came back to me last week as I toured Wal-Mart's music department, doing research for the book. Wal-Mart accounts for about a fifth of America's music sales (I mistakenly said a quarter in this post), and is by far the nation's largest music retailer. As such, it was an essential field trip, mostly to learn more about the opposite of the Long Tail.

    Wal-Mart is the Short Head. And I was soon to discover just how short short really is.

    This is probably the right time to confess that until I visited I was probably the only person in the country who had never been to a Wal-Mart. It's not that I'm a snob; I'm just not much of a shopper and when I do the big box thing it's Costco. But some 138m Americans shop at Wal-Mart each week, making it perhaps the single most unifying cultural force in the country. So everyone else has already noticed what I discovered, which is that Wal-Mart is a charmless but impressive demonstration of the power of container ships and monopsony to arbitrage global labor rates. Everything is freakishly, how-do-they-do-that cheap.

    But it's a depressing way to buy music. Although the size of the inventory varies from store to store, the average number of titles in each, which was 5,000 last year (there are, as a point of reference, 800,000 CDs available on Amazon), has reportedly fallen since then as shelf space for music has been given over to DVDs. At the store I visited in Oakland, California there were about 4,100 titles, distributed as follows:

  • "Rock/Pop/R&B":            1800
  • "Latina":                           1500
  • "Christian/Gospel":             360
  • "Country":                          225
  • "Classical/Easy Listening":  225

    There were two main aisles. One was "Rock/Pop/R&B"; the other was "Latina". All other categories were lumped into single racks, such as this one:

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That is, by the way, the entire Jazz, Classical, World Music, Easy Listening and New Age section.

    Of the estimated 30,000 new albums released each year, Wal-Mart carries just 750, according to David Gottlieb, a former label executive interviewed in this Frontline documentary. Entire categories, from dance to spoken-word, are either missing or buried in Rock/Pop/R&B.

    [I should note here that this just applies to the physical stores. Walmart.com actually has what appears to be a pretty good music site, with 80,000 CDs, 500,000 downloadable tracks at a market-leading $0.88 each and the option to create your own mix CDs. Unfortunately it doesn't support Firefox, so I can't tell you much more than that.]

    Rolling Stone had a revealing article last year about the power of Wal-Mart in the music industry and the effect on our culture of its small (and shrinking) music shelf space and ban on music with a Parental Warning sticker.

No one in the music business ever expected Wal-Mart to become the most powerful force in record retailing. In the past, the business was shared among smaller local and regional chains such as Musicland, which once had an estimated ten percent of the market. But as Wal-Mart and other national discount operations such as Target and Best Buy have grown -- approximately half of all major-label music is sold through these three -- an estimated 1,200 record stores have closed in the past two years, according to market-research firm Almighty Institute of Music Retail. Last February, Tower Records, with ninety-three stores, declared bankruptcy and is now up for sale; Musicland has already changed owners, with many local outposts shuttered.

Wal-Mart is like no traditional record seller. Unlike a typical Tower store, which stocks 60,000 titles, an average Wal-Mart carries about 5,000 CDs. That leaves little room on the shelf for developing artists or independent labels. There's also scant space for catalog albums, which now represent about forty percent of all sales. At a Wal-Mart Supercenter in Thorton, Colorado, for example, there were no copies of the Rolling Stones' Exile on Main Street or Nirvana's Nevermind.

So there you have it. Scarcity, bottlenecks, the distortion of distribution and the tyranny of shelf space all wrapped up in one big store. Ironic that a place that seems to have so much could in fact have so little in each category. It's the paradox of plenty: a mile wide and an inch deep may look like everything at first glance, but in a world that's actually a mile wide and a mile deep a veneer of variety is not enough.

July 04, 2005

Long Tail Caption Contest

As suggested  by Pegasus News, I think we can do a better job than The New Yorker's readers on the caption contest for the following. (The best of the ones they came up with is “Try telling that to the Kansas Board of Education”, which is actually quite good, but not for our purposes...)

Captioncontest_1


I'll start:

"If this is the price of overusing a buzzword, it's worth it."

Over to you all, in the comments.

March 30, 2005

Reality Check

Hugh Macleod (gapingvoid) offers a cautionary perspective:

Shortail

The Grokster Case's Silent Majority

The LA Times asked me to write an op-ed on the Grokster case from a Long Tail perspective. I thought the one missing element from the debate so far was the recognition that it's not just companies vs. consumers this time. The new amateur creative class, the "pro-ams", who populate much of the deep tail and depend on the open distribution technologies that are under attack, could be the losers  if the Supreme Court sides with MGM and forces p2p networks to police content.

Two decades ago, when the famous Betamax case set a precedent that protected the VCR, it was consumers versus the studios and record labels. But now there's an equally important third party: the creative amateur — people like you and me who not only consume but also produce content. And they're on the side of Grokster and the extraordinary power of the new distribution networks.

Read it all here.

March 28, 2005

Sidebar Shoutout

Just a quick note to mention that I've added a few dozen summaries and links to interesting Long Tail comment elsewhere to my sidebar, adding to the 120 or so that were already there. The SixApart folks have been promising a Typelist (which is what the sidebar is) RSS feed for a while, but until they deliver you'll just have to actually visit the site to see how smart folks from all over the web are adding to the LT conversation. It's practically open source!

March 18, 2005

80/20...cracked!

Thanks to all your smart and insightful comments, I've discovered the source of my 80/20 conceptual problem: I'm an idiot.  Although many of you were gently pushing me in the right direction, it was Jakob Neilsen (comment 15) who put his finger on it. I'd somehow forgotten that the 80 and 20 are supposed to be percentages of different things.

The conventional definition is that 20% of products make up 80% of revenues. But when I suggested that this would evolve to a 50-50 rule--that the money in markets of the future will be roughly balanced between hits and niches--I'd changed the definition. In the new formulation, both term refer to revenue. Doh!

One of the best bits of advice many of you gave was not to take 80/20 too seriously. Its power is in its universal resonance and familiarity, not the absolute accuracy of its numbers. I'll keep that in mind as I continue work on the chapter and I thank everyone for helping me clear this up.

Tidbits