Report: blockbusters rule, long tail overrated

A report in the <i>Harvard Business Review</i> suggests that while digital distribution has made a larger number of titles available than ever, consumers are still flocking to blockbusters, and enjoy them more than obscure titles.

Matt Rosoff
Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff.
Matt Rosoff
3 min read

A fascinating article in the current issue of the Harvard Business Review calls into question some of the now-accepted wisdom about the long tail.

I've been very satisfied with this relatively obscure compilation of Ethiopan jazz tunes (mostly by Mulatu Astatke). But I've had far more conversations about blockbuster recordings from the likes of U2, and those conversations are valuable to me in their own right.

A quick refresher: the long tail theory, popularized by Wired editor Chris Anderson, says that as digital distribution drives distribution costs to zero, businesses will be able to profit by stocking enormous numbers of obscure titles. These titles, which may only sell one or two copies a year, are the tail of the traditional demand curve--the "long tail."

The HBR study, by Anita Elberse, analyzes data from online music and video stores and suggests that digital distribution has actually had the opposite effect: while more titles are available than ever before, consumers are flocking in ever-greater numbers to the handful of very popular titles at the head of the demand curve.

Interestingly, consumers who buy both types of titles actually find the blockbuster titles to be more satisfying.

Why is that? Is it because the cream rises to the top, meaning that the most popular titles are necessarily some of the best? Tastemakers in the music industry would have you believe so, and at least one company, HSS, claims it can analyze songs with software to predict whether they'll be hits or not.

But I prefer an alternate theory: most people are sheep. (Not me, of course. Or you.) But seriously: a Columbia University study that I've cited before suggests that there's very little link between the objective "quality" of a song (as measured in a control group where none of the listeners could see other participants' ratings) and its popularity--the more popular a song appears to be in a particular subgroup, the more popular it becomes. The popular songs in one group had no relationship to the popular songs in another group.

Here's a nicer way of putting it: objective quality is impossible to measure, and people are driven by social inclusion--the desire to be accepted as part of a larger group, which defines itself partially by the media it consumes. This is why every indie rock fan between the ages of 25 and 35 in Seattle was listening to and talking about Outkast's "Hey Ya" when it came out. That song was unusual because it crossed over to lots of subgroups, paving the way for a humungous national blockbuster album. But in Seattle, the same thing happened for The Postal Service and the first Arcade Fire album, too. All of that music was good--there's a certain quality baseline below which something just won't become popular. But social inclusion is a huge reason why those songs and bands rose above dozens of others that were of more or less equal quality.

Given the tendency of people to flock to the big hits, Elberse recommends that producers do not change their business models to cater to the long tail. For the music industry, that means labels should continue to bet on a few releases each year, and market the heck out of any that show a glimmer of popularity. They may not sell 10 million records like they did a few years ago, but a few million-sellers per year can still support a hits-driven business, making it capable of taking chances on hundreds of smaller artists. At the same time, she recommends that retailers who want to appeal to hardcore customers--the ones who spend the most money--should stock the obscure stuff (I'd call that the Amoeba Records model), but keep costs for it as low as possible, and assume that the big hits will still draw most people into the store.