Copyhype

Hit songs, blockbuster movies, best-selling books — most creative industries are driven by sales of a small handful of the most popular releases.

In 2004, Wired editor-in-chief Chris Anderson wrote that the internet would render this model obsolete.

Physical limitations of the bricks-and-mortar world led to a focus on blockbusters in the first place. As Anderson explains in Rise and Fall of the Hit, “The world of shelf space is a zero-sum game: one product displaces another. Forced to choose, each link in the entertainment industry naturally selects the most popular products, giving them privileged placement.” Less-popular, obscure, and niche products remained unavailable to consumers because of the “tyranny of physical space.” In addition to this, creative markets are notoriously uncertain and inefficient; focusing on blockbusters helps lower these risks.

The internet, of course, doesn’t have the same physical limitations as warehouses and retail outlets. Shelf space is virtually infinite. Content can be easily and cheaply distributed around the world. The shift from an analog to a digital world is radical. In the music world, for example, what once took a vast amount of infrastructure and hundreds of millions of dollars — distributing music to consumers across the nation ¹It’s estimated that a national record distribution operation cost $125 million a year in the mid-1980s, according to David Nelson, Free the Music: Rethinking the Role of Copyright in an Age of Digital Distribution, 78 Southern California Law Review 559, 563 (2004). — could be done digitally for pennies. ²Although there are still significant costs involved with preparing the music for digital distribution, and the costs of creation remained relatively similar.

In his influential book, The Long Tail: Why the Future of Business is Selling Less of More, Chris Anderson suggests that these changes will result in a shift away from the blockbuster effect. In a traditional retail sales distribution curve, blockbuster products make up a large “head” that contribute to the majority of sales, while the rest of products reside in a smaller “tail” that eventually reaches to zero — most commonly this is referred to as the 80/20 rule, where 80% of sales come from 20% of  products. The “Long Tail” theory states that since online retailers have unlimited “shelf-space,” the tail can extend much further; wide product selection and worldwide access increases demand for less popular and niche products in the tail as well, until the majority of sales come from the tail instead of the head.

If the Long Tail theory is correct, what does that mean for copyright? Anderson and others have predicted that a shift in demand away from hits would reduce the role of those companies that have traditionally invested in content creation — record labels, film studios, publishers, etc. These companies typically rely on a solid framework of copyright law to operate. Content creators in the “tail”, it is argued, are less concerned with copyright’s protections, which could result in a “less rigorous de facto regime for the majority of works.” ³William Patry, A Long Tail Effect on Copyright?, Patry Copyright Blog (Dec 19, 2006). I disagree with the contention that attitudes toward the appropriate scope of copyright protection can be generalized in this fashion. Indeed, there are many examples that can be used to show the opposite.

Which brings us to our next question. Is the Long Tail Theory correct?

Anderson presents several case studies consistent with his theory. But while a few studies done since the book was published have reached similar results, ⁴Brynjolfsson, Hu, and Simester, Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales (January 1, 2011); Haro, Sainz, and Somalo, Is One Long Tail Enough? (Cuando Una Long Tail No Es Suficiente) (2008). the full range of evidence shows a decidedly mixed bag. ⁵Ã’scar Celma, Music Recommendation and Discovery in the Long Tail, (2008).

Billboard Magazine’s Glenn Peoples highlighted some of this recent research and other statistics which show that, despite Anderson’s predictions, demand for content remains concentrated around blockbusters. In The Long Tale?, Peoples writes:

So far, at least according to Nielsen SoundScan data on U.S. music sales from January 2004 through October 2009, that revolution hasn’t arrived—although the demand for albums has changed. Sales of albums, especially digital ones, became significantly less concentrated around hit releases since 2004. But sales of digital tracks—which this year account for 56% of digital sales by track volume—have grown more concentrated in hits during the same time period.

These findings are consistent with other research, including that conducted by Will Page and Anita Elberse. In his recent article, In Defense of Copyright: Record Labels, Creativity, and the Future of Music, Brian Day explains, “The results of both Page and Elberse‘s studies suggest that consumer demand for music has remained fairly constant despite the digital transition, with the vast majority of sales clustered around a small group of extremely popular titles.” ⁶21 Seton Hall Journal of Sports and Entertainment Law 61 (2011).

If any conclusion can be gleaned from this, it is that the Long Tail Theory is not a natural phenomenon, caused solely by the economics and architecture of the internet. Factors besides these drive demand to content located in the tail.

And even though there are benefits to increasing the importance of “tail content”, “head content” still plays an important role. The success of hits and blockbusters provides the capital for content industries to take more risks, investing in the creation of non-mainstream and niche content. The importance of hits remains remarkably the same at every level across many different artistic fields — consider how many ballet companies rely on Christmas productions of The Nutcracker Suite to sustain themselves. ⁷For example, The Washington City Paper notes that The Nutcracker provides 20% of the Washington Ballet’s total ticket revenue each year; The Cincinnati Ballet received 51% of its annual revenue from the Suite in 2008-09.

In short, the demise of “traditional” creative companies predicted by The Long Tail, and any changes in the role of copyright law that may accompany that, has yet to occur in practice. Brian Day offers his own conclusions drawn from the discussion above specifically relating to the music industry — conclusions that I both agree with and think are just as applicable to other types of works covered by copyright law:

The Internet has thrown open the floodgates of music,offering consumers more selection than ever before. As the previously discussed studies demonstrate, however, increased access to music does not suggest that consumers’ appetite for music has changed or that record labels have artificially restricted musical diversity or creativity. To the contrary, the studies demonstrate that record labels successfully satisfy consumer demand by providing useful art to consumers. Without record labels, the long tail would likely grow even longer, requiring consumers to sift through thousands or perhaps millions of songs in hopes of stumbling upon a hit. Labels provide expertise in determining which songs and artists will appeal to specific groups of consumers, and invest significantly to market and promote their selections. A review of Billboard’s Top 100 most popular songs affirms the continuing popularity of label-funded music and artists. ⁸In Defense of Copyright, pp 87-88.