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Canada's Culture Industries Benefit from the Long Tail Effect |
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Monday July 24, 2006
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Appeared on July 24, 2006 in the Toronto Star as Future of Business is Selling More of Less Since first appearing as a feature article in Wired Magazine in October 2004, the concept of the Long Tail has generated considerable buzz within the technology, entertainment, and business communities. In his just-released follow-up to the article, The Long Tail: Why The Future of Business is Selling Less of More, author Chris Anderson explains that the Long Tail involves a marketplace and cultural shift toward a relatively small number of hit books, movies, and records alongside an enormous number of smaller success stories that together rival the economic importance of the hits. For example, authors such as Dan Brown and J.K. Rowling sell millions of books worldwide. At the same time, there are hundreds of thousands of authors who each sell less than a hundred books each year. While those sales are very small on an individual basis, collectively those small sales add up to millions of book sales - so many in fact that they may actually outnumber the Browns and Rowlings. Before the development of the Internet, most of those books were practically inaccessible, since the average retail bookstore could not afford to stock selections that might not sell even a handful of copies. The emergence of the likes of Amazon and Chapters Online, with no such inventory limits, has enabled those books to suddenly find a market. The Long Tail is in evidence across the entertainment industry with the great demand for movies that do not appear in video rental stores (of the 200,000 films, television shows and other videos released commercially, the average video rental store carries 3,000) and with music that is not played on conventional radio nor stocked in most retail outlets (99 percent of music albums on the market today are not sold in Wal-Mart, North America' s leading music retailer). In fact, Anderson notes that from the Long Tail of fashion to the Long Tail of beer, "there are now Long Tail markets practically everywhere you look." From a Canadian perspective, the importance of the Long Tail should resonate strongly with businesses and policy makers since we don't have to look very far for Long Tail markets - with few exceptions Canadian culture is in the Long Tail. For example, David Suzuki's The Autobiography and Stephen Lewis' Race Against Time are currently two of the best-selling Canadian non-fiction books. Their popularity is reflected in Amazon.ca's sales rankings where the books hold the 406th and 2260th position, respectively (ranking as of July 21st). Each book is readily available both online and offline with booksellers unsurprisingly stocking sufficient copies to meet consumer demand. Contrast those sales with demand for the books outside the country. Suzuki's book has not even been released in the United States where the book ranks 627,515th on the Amazon.com sales list. The Lewis book is sold in the U.S., ranking 149,526th on Amazon.com. Given its relatively low ranking, the Lewis book, whose coverage of the AIDS crisis in Africa is meant for a global audience, is unlikely to be found in most U.S. bookstores. The same is true for Canadian music. While Canadian musicians such as Nelly Furtado and Nickelback currently enjoy international success, there are many acts for which success at home is not replicated outside the country. Billy Talent, an emerging Canadian group, has garnered critical and commercial success in Canada since releasing their new CD last month. Apple iTunes Canada ranks it as the eighth most popular full album and ranks two of its songs as the 35th and 53th most popular downloads. In the U.S., however, neither the CD nor the songs have cracked the Apple iTunes U.S. top 100 chart. While the music may still on iTunes, the lower numbers suggest that it may not be heard on U.S. commercial radio stations or found in U.S. retail stores. In the movie sector, one need not look outside the country to find evidence of the Canadian Long Tail. According to the Canadian Film and Television Production Association, Canadian English-language films garnered just $12.1 million in box-office revenue in 2004. The 2004 figure, of which more than 40 percent came from Resident Evil: Apocalypse, constituted just 1.6 percent of total English-language box-office revenues (an increase from 0.9 percent in 2003). Despite the small revenues, there are dozens of Canadian English-language feature films made each year, many of which will never be screened in theatres. For businesses and policy makers, the message of the Canadian Long Tail is clear - Canadian success, whether in domestic or foreign markets, will increasingly depend on Internet-based distribution that can overcome the scarce availability of Canadian content in book stores, music shops, and movie theatres. This shift will require a re-examination of Canadian content rules since the benefits of the Long Tail depend not on limiting choice, but rather on increasing it. Moreover, foreign investment rules that restrict ownership of booksellers (which apply both offline and online) may no longer be sensible given that it is in everyone' s economic interest to ensure that Canadian content is readily available. Businesses must also factor the Long Tail into their marketplace strategies. One of the reasons for the relative lack of success of the Canadian online music market may be limited choice - the U.S. online music market has at least four times as many online music services, many of which offer at least twice as many songs as the Canadian services. The Long Tail book provides a compelling narrative about why the future of business is selling less of more. For the Canadian cultural industries, the future can' t come soon enough. Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca. Comments (2)
Andy
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Long Tail 'Venues' A very topical post, thanks Michael. I think it's worth clarifying that rather than simply 'more choice', an important factor in reaping long tail benefits is making these products readily and easily available through a central 'venue' (i.e. Amazon) — alternatively, offering niche, genre-based venues. Regardless which side of the fence you find yourself on regarding the statistical success of long tail revenue to-date [interesting articles for here and against |
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