Is Spotify’s long tail bringing benefit for New and Indie artists?

 

Thanks to the internet, anyone can have access to a big diversity of music content at anytime, anywhere. In addition, this technological tool has changed the music industry helping to bring out new and independent projects. This recent phenomenon is thanks to the easy accessibility and cheap distribution of tons of music.

 

Back in time, as soon as a CD album decreased in popularity, it was released from the retailers giving no chance for long tail revenue. Thanks to the digital catalogues the music could still being purchased long after it was first released and its buzz decreased. Basically, the tail of distribution is the time when non-common product sales become profit due to the low cost in distribution and marketing. The long tail is when these sales are made giving us the context of how consumers interact within the digital tools.

In theory, this situation would give a chance for new music to appear in the scene making a more balanced market against the blockbusters-hits. The creation of these niches was supposed to grab new consumers that can follow a diverse content on the web. Social media, blogs, forums and platforms such as Youtube and music stream channels like Spotify seem to build a perfect environment where new projects will finally fight for some space in the market against big labels.

 

The problem is that the mainstream music is pushing down from the top instead of the bottom (new artist) pushing up and fattening the tail of the indie music. The consumption of the product on the head of the tail (commercial-mainstream music) has increased due to several reasons including:

  •       Mediocre content in the middle of the tail
  •       High level of competition within the Indie market
  •       Low barriers to enter into the Indie market
  •       People used to listening to the same music. For instance classic and commercial music.
  •       Consumers are still influenced by the trend of blockbuster-hits
  •       Water cooler effect: people adapt their tastes to fit in social groups
  •       Consumer’s “Tyranny of Choice” in which excessive choice actual hinders discovery.

Statistics show that 1% of the music projects represent 75% revenue in recorded music and 79% in the subscription revenue.  This means that in the economic sense it has become an unrewarded situation for most of the projects especially for the non-commercial ones.

In an era where digital music and streaming is increasing each year, Spotify seems to be the perfect window where new music will be exposed. Unfortunately 5% of the music streamed through this website are the most popular tracks representing 80% of the streams. One fifth of the 25 million tracks available have never been played. In addition, the revenue per streams is ridiculous. As it is shown in the following chart, a song should be streamed around 145 times in order to equal the payout from one iTunes Store song download.

 

In conclusion, although there are people that still believe that long tail is working well for music aficionados and undiscovered projects, it is a fact that it works much better for super projects backed for the big companies that can still make money for many time after the date when the music is released.

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