Digital Music News Report: The Long Tail And Other Visions Of Indistry’s Future From Music 2.0 Conference

• "Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream."          – Larry Anderson in Wired Magazine

According to Digital Music News Wired Magazine editor Chis Anderson expounded on his "Long Tail" vision of the music industry at last week’s Music 2.0, "…the theory states that continued sales of niche content over an extended period of time can rival the short-term spikes of a major artist like Britney Spears or Mariah Carey."

"Positioning the concept as the future of entertainment media, Anderson points to Amazon and Netflix as examples of new retail outlets able to build strong recurring sales in niche markets. His point is, in the age of digital distribution, with infinite shelf life and no physical media to produce, a song or album can be available indefinitely, creating long-term renewable revenue streams. And shouldn’t that long-term outlook be considered an integral part of a company’s plan for growth and profitability?"

"For decades the music industry has been criticized for focusing on the short-term gains…Now, with digital technology powering a consumer appetite for individual tracks, a revitalized singles market could be ahead. But a hit-driven model demands extended resources to create and market the big sellers, and those efforts are no longer delivering the returns they once did. That makes the next few years very tricky for established players…"

"…several new concepts were tossed around at last week’s Music 2.0 in Foster City, CA. Thomas Hesse, president of Global Digital Business at Sony BMG, discussed innovations in royalty dispersion, distribution and marketing. David Card, senior analyst at JupiterResearch, and Fred Von Lohmann, senior intellectual property attorney for the Electronic Frontier Foundation, both envisioned digital music as an intellectual property licensing stream going forward. Anderson’s business model calls for pricing based on customer demand and real costs leveraged over time. Meanwhile, critics continue to point to a major label emphasis on quick profits, instead of sustained profitability and growth. That could be playing a very large role in the demise of brick and mortar CD sales, with Anderson pointing to a more vital and consumer-focused media industry going forward."

Story by news analyst Michael Bloom for Digital Music News

Read Anderson’s original article here .  He’s expanding his concepts into a book to be published in May 2006 in the meantime check out his latest thoughts on his Lomg Tail blog.