The Long Tail (4 page)

Peer-to-peer file trading is so massive that a small industry has now grown up around it to measure and learn from the experience. The leading such analyst is BigChampagne, which tracks all the files shared on the major peer-to-peer services. What it’s seeing in the data is nothing less than a culture shift from hits to niche artists.

Today, music fans are trading more than 9 million unique tracks, almost all of them far outside the
Billboard
Hot 100. There is a thriving subculture that’s into “mashups” (playing a track from one artist over a track from another artist), and another that’s into music composed
on the eight-bit chips once found in Nintendo video-game machines. Plus, a lot of indie rock of the sort that makes for great shows but no radio play. Notably, boy bands are not particularly popular.

The rise of file-trading networks was not the only tectonic shift in the culture. In 2001 Apple released its first iPod, a simple-looking white MP3 player 4 inches long, 2.5 inches wide, and less than 1 inch thick. It was by no means the first MP3 player on the market, but thanks to its utter simplicity, elegant design, and Apple’s highly effective marketing campaign, the iPod became the first must-have portable digital music device. Soon, as people ditched their Walkmans and Discmans, the iPod’s white earbuds became ubiquitous and iconic.

What was really disruptive about the iPod was its storage capacity of as much as sixty gigabytes. This allowed users to carry around entire libraries of music, up to ten thousand songs, an inventory equivalent to a small record store. Over the next few years, the iPod became a personal soundtrack for millions of people, as they walked down the street, while they worked, or as they rode public transportation.

But filling an iPod with paid-for tracks is a multithousand-dollar proposition. Compared to that, free is an incredibly tough price to beat. The dorm-room-jukebox case for freely downloading digital songs from the Internet to a PC became an equally compelling case for filling an iPod. Same for ripping, burning, and trading CDs, just as Apple’s famous advertising campaign encouraged. The peer-to-peer networks exploded, populated by the combined music inventories of millions of users. The result: a lot of piracy, to be sure, but also massive, unbounded selection—hundreds of times as much variety as in any record store, and all available from basically any laptop.

Of course, these revolutionary methods of acquiring music also provided unmatched ways to
discover
new music. While CD burning and trading between friends is “viral marketing” (buzz that passes from person to person) of the most powerful kind, playlist sharing is word of mouth taken to an industrial scale. And there are even dedicated recommendation services such as Pandora and hundreds of Internet radio stations, businesses that not only thrive on introducing fans to the
coolest underground artists, but are also working to match personal tastes with increasing precision.

What if there were 400 Top 40s, one for each narrow music niche? Or 40,000? Or 400,000? Suddenly the concept of the hit gives way to the
micro-hit
. The singular star is joined by a swarm of micro-stars, and a tiny number of mass-market elites become an unlimited number of niche demi-elites. The population of “hits” grows hugely, each one with smaller but presumably more engaged audiences.

This is not a fantasy. It is the emerging state of music today. A good online music service such as Rhapsody will list at least 400 genres and subgenres (breaking genres into new, incredibly specific categories such as “electronica/dance>beats&breaks>cut&paste”), each of which has its own top ten list. This effectively creates 4,000 minihits, each far more meaningful for the fans of that genre than Casey Kasem’s national playlist ever was. Then there are the infinite number of top ten lists dynamically created for each customer based on his or her listening patterns and particular tastes, no matter how narrow they may be.

BROADCAST BLUES

The troubles in the music industry are not confined to CD sales. Rock radio, long the favored marketing vehicle for the labels, is suffering just as badly. In 1993, Americans spent an average of twenty-three hours and fifteen minutes per week tuned in to the radio. As of spring 2004, that figure had dropped to nineteen hours and forty-five minutes. Listenership is now at a twenty-seven-year low, and it is rock music programming that seems to be suffering the most. In 2005, an average of one U.S. rock radio station went out of business
each week
. Typically, those stations switched to talk radio or Latin formats, which are more “sticky” (they keep audiences listening longer) than rock and pop, which is only as appealing as the current song it’s playing.
American Top 40
just doesn’t have the pull it once had; Casey Kasem is resting comfortably in retirement.

Experts argue about the primary cause, but here are the main candidates:

• The rise of the iPod phenomenon:
  With the ultimate personal radio, who needs FM?
  
• The cell phone:
  Commuters stuck in traffic were the salvation of radio in the eighties. Today we’re still stuck in traffic, but now we’re chatting on the phone.
  
• The 1996 Telecommunications Act:
  Adding a thousand FM stations to the dial, this legislation increased competition and depressed the economics of the incumbents. The act also relaxed the limits of ownership in each market, leading to…
  
• Clear Channel:
  Often blamed for radio’s woes, this corporate media giant is as much a symptom of the industry’s brutal economics as it is a cause. As the Telecommunications Act undercut the business of local radio in the late 1990s, Clear Channel was able to do a roll-up of distressed stations. The company now owns more than 1,200 of them, or one out of every ten. Its plan was to lower dramatically the costs of radio by implementing centralized programming and computer-driven local station programming. The result was bland homogenization.
  
• The FCC’s obscenity crackdown:
  It’s always been part of the FCC’s mandate to police what’s said on the airwaves, but it’s rarely exercised its duty with as much vigor as in the past five years. The main target was Howard Stern, an earthy radio personality with a taste for the outrageous. After incurring unprecedented fines, Stern finally gave up on terrestrial broadcast. At the end of 2005 he departed for satellite’s Sirius Radio, where he debuted—mostly uncensored—to an audience of subscribers in January 2006. Today, broadcasters have more reason to fear that what they say or play could cost them not only money, but also their jobs. The result: further homogenization.
  

The result of this rock radio meltdown is that the Top 40 era is drawing to a close. Music itself hasn’t gone out of favor—just the opposite. It’s never been a better time to be an artist or a fan. But it’s the
Internet that has become the ultimate discovery vehicle for new music. The traditional model of marketing, selling, and distributing music has gone out of favor. The major label and retail distribution system that grew to titanic size on the back of radio’s hit-making machine found itself with a business model dependent on huge, platinum hits—and today there are not nearly enough of those. We’re witnessing the end of an era.

Everyone with those white earbuds is listening to what amounts to his or her own commercial-free radio station. Culture has shifted from following the crowd up to the top of the charts to finding your own style and exploring far out beyond the broadcast mainstream, into both relative obscurity and back through time to the classics.

In a 2005 speech, News Corp. chairman Rupert Murdoch showed that he was among the first of the media moguls to grasp the magnitude of today’s elite versus amateur divide: “Young people don’t want to rely on a Godlike figure from above to tell them what’s important,” he said. “They want control over their media, instead of being controlled by it.”

What’s happening in music is paralleled in practically every other sector of mass media and entertainment. Consider these statistics from 2005:

• Hollywood box office fell 7 percent, continuing a decline in attendance that started in 2001 and appears to be accelerating.
  
• Newspaper readership, which peaked in 1987, fell by 3 percent (its largest single-year drop) and is now at levels not seen since the sixties.
  
• Magazine newsstand sales are at their lowest level since statistics have been kept, a period of more than thirty years.
  
• Network TV ratings continue to fall as viewers scatter to cable channels; since 1985, the networks’ share of the TV audience has fallen from three-quarters to less than half.
  

The watercooler effect is losing its power. In 2005, the top-rated TV series,
CSI
, was watched by just 15 percent of TV households. Those kinds of numbers wouldn’t have put it in the top ten in the seventies.
In fact, all but one of the top-rated TV shows of all time are from the late seventies and early eighties (the one newer one is the 1994 Winter Olympics, still more than a decade ago). Collectively, the hundreds of cable-only channels have now passed the networks in total viewership. No single one dominates.

Even the usual must-see TV is no longer anything of the sort. The 2005 World Series had its lowest TV ratings of all time, dropping 30 percent from the previous year. The 2005 NBA playoffs rating reached near-record lows as well, down nearly a quarter from the year before. In 2006 the ratings for the Grammy Awards were off 10 percent. The 2006 Winter Olympics had its lowest ratings in twenty years, down 37 percent from the 2002 Games in Salt Lake City. And the Oscars hit a ratings low not seen since 1987.

As
LA Times
critic Patrick Goldstein puts it, “We are now a nation of niches. There are still blockbuster movies, hit TV shows, and top-selling CDs, but fewer events that capture the communal pop culture spirit. The action is elsewhere, with the country watching cable shows or reading blogs that play to a specific audience.”

The arrival of TiVo and other DVRs amplified this dissolution of the watercooler effect by removing the
time
component as well. Today, even if people are watching the same shows, they may not be watching them on the same night or at the same time. Who wants to listen to the morning-after recaps of real-timers, people who will ruin the surprise of shows you’ve yet to watch?

A HIT-DRIVEN ECONOMY IS A HIT-DRIVEN CULTURE

While the era of the blockbuster hit may have peaked, its effect on our assumptions about media has not. The existing media and entertainment industries are still oriented around finding, funding, and creating blockbusters.

Entertainment products, be they movies, TV shows, or albums, can be expensive to make, market, and distribute. For instance, the average cost of a Hollywood production is now $60 million, with at least that much additionally required for marketing. Yet it is as hard as ever to
predict which films will strike a chord with consumers, which is why tried-and-true actors and directors command such high salaries—they bring a little predictability to a woefully unpredictable business. But even stars make flops, so the studios, labels, and networks employ a portfolio approach to spread their risk.

Like venture capitalists, they spread their bets over a number of projects, investing in each one enough money to give it a fighting chance at becoming a hit. They expect that, at best, most of the projects will break even, and a few will flat-out fail. That means that the few that
are
hits must compensate for the drag of the others.

In that sense, these businesses absolutely
need
hits. And not just profitable products—we’re talking huge, blow-through-the-numbers megahits. The high costs of production and the uncertainties of success put pressure on the winners not just to win, but to win
big
. And the rest? Well, those would be the misses. Never mind that they may have been critically acclaimed or even heard or seen by millions of people. If those products don’t make back their money manyfold, they’re just not doing their job to support the rest of the portfolio.

Setting out to make a hit is not exactly the same thing as setting out to make a good movie. There are things you do and don’t do in the quest to draw tens of millions of paying viewers. You do pay as much as you can for the biggest-name star you can lure to the project. You don’t try to be “too smart.” You do have a happy ending. You don’t kill off the star. If it’s an action movie, more effects are better than fewer. And, all things being equal, it probably
should
be an action movie. Certainly, it’s possible to break these rules and still have a hit, but why take chances? After all, you’re investing a lot of money.

This hit-driven mind-set has leaked outside of the Hollywood boardrooms and into our national culture. We have been conditioned by the economic demands of a hit machine to expect nothing less. We have internalized the bookkeeping of entertainment risk capital. This is why we follow weekend box office results as we do professional sports—keeping score and separating the clear winners from the seemingly obvious losers.

In our fixation on star power, we cheer the salary inflation of A-listers and follow their absurd public lives with an attention that far exceeds our interest in their work. From superstar athletes to celebrity CEOs,
we ascribe disproportionate attention to the very top of the heap. We have been trained, in other words, to see the world through a hit-colored lens.

If it is not a hit, it is a miss. It has failed that economic test and, therefore, never should have been made. With this hit-driven mind-set, history is written by the blockbusters, and the best test of quality is box-office gross. And this doesn’t just apply to Hollywood. It’s how we assign space on store shelves, fill time slots on television, and build radio playlists. It’s all about allocating scarce resources to the most “deserving,” which is to say, the most popular.