Monday, December 29, 2008


Patrick Foster, Times, UK - The internet was supposed to bring vast choice for customers, access to obscure and forgotten products - and a fortune for sellers who focused on niche markets.

But a study of digital music sales has posed the first big challenge to this "œlong tail"� theory: more than 10 million of the 13 million tracks available on the internet failed to find a single buyer last year.

The idea that niche markets were the key to the future for internet sellers was described as one of the most important economic models of the 21st century when it was spelt out by Chris Anderson in his book The Long Tail in 2006. He used data from an American online music retailer to predict that the internet economy would shift from a relatively small number of "œhits"� - mainstream products - at the head of the demand curve toward a "œhuge number of niches in the tail"�.

However, a new study by Will Page, chief economist of the MCPS-PRS Alliance, the not-for-profit royalty collection society, suggests that the niche market is not an untapped goldmine and that online sales success still relies on big hits. They found that, for the online singles market, 80 per cent of all revenue came from around 52,000 tracks. For albums, the figures were even more stark. Of the 1.23 million available, only 173,000 were ever bought, meaning 85 per cent did not sell a single copy all year.

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