When the government plans to introduce controversial new policies, they prepare in advance (hinting in speeches, briefing reporters privately, etc.) so that when the new policy is finally introduced, it will be less controversial. A similar process is currently playing out in the music industry. The biggest major record label executives are starting to sow the market with narratives about the potentially corrosive impact of fast-growing music and the long tail of creators on the consumer music streaming experience. Of course, it also happened to undercut the major labels’ market share, but the problem wasn’t as clear-cut as it first appeared.
Long-tail finishing is at risk from three main industry components:
- Major record labels and their artists
- long tail creator
Let’s take a look at them in turn:
1 – Main Tab
The first on the list is the most obvious and the easiest to demonstrate. Over the five years from 2016 to 2021, recorded music revenue for the major labels grew 71%, which is impressive enough, except for artist direct (i.e., artists without a label release), which saw revenue grow 318% over the same period . As a result, Artist Direct increased the global market share from 2.3% to 5.3%, while the professional increased from 68.8% to 65.5%. At the same time, the top 10 and top 100 tracks represent a smaller and smaller share of all streams. At the very least, it can be said that the collective growth of majors and their artists is slower than that of long-tail creators. At most, it can be said that long-tail creators have eroded the growth of majors.
2 – Consumer
It is difficult to make clear reasons for or against. Consumers tend not to categorize music as precisely as the music business. For example, only one-third of consumers say they primarily listen to old music, despite industry statistics showing that catalog consumption dominates. Most consumers don’t think music is “outdated” like the music industry does. So, imagine how difficult it would be for consumers to describe “what is the long tail”? They might say in their survey that “the music isn’t as good as it used to be”, but they could just as well call professional music the long tail.So we’re in the measurement realm Second-order effects (are consumers disconnected from streaming? Not yet, but they probably will) and making logical assumptions. If consumers keep listening to lower-quality music, it is reasonable to assume that their satisfaction will drop. However, DSP algorithms push music that suits the user’s taste, and there is so much high-quality music in the long tail that there is no particular reason to assume that more long-tail consumption should essentially equate to increased consumption of bad music. Don’t forget Yes, consumers have shown sufficient tolerance for “normal” music in mood and activity playlists.
3 – Long Tail Creator
It may sound paradoxical to suggest that the creators of the long tail might be hurt by the rise of the long tail. But, as Will Page puts it, the rise of the long tail means “more mouths to feed.” The decentralized nature of streaming royalties means that the more long-tail creators there are, the fewer per stream and, more importantly, the harder it is to break through. Ironically, it’s easier to prove that the long tail is eating itself than to establish a causal link between its rise and the big players losing share.
divide and conquer
Of course, the missing constituency is the DSPs themselves, but they don’t deserve a place here because of their ability to scale up or down long-tail consumption through their algorithms. It gives the DSP a degree of listening clips, as it reduces the share and therefore the power of any single tag. But if the DSP ever thinks they’re going too far, then they control the algorithm.
Where to go next?
So what does all this leave us with? In a “do nothing” scenario, listening continues to fragment, professionals lose more share, long-tail creators find it harder to break through and make money, and consumers may (or may not) see their listening experience have any meaningful changes. In short, the head is lost, the long tail is lost, and the market is further consolidating around the “body” of the streaming catalog (which, by the way, is already a key player in the major players and could easily increase their attention – because WMG is already doing it).
The “Do Something” options are divided into two key groups:
- gate/restrict consumer access to directories
- Gates/limits creators to get royalties
There are many ways to achieve the first one (prevent long-tail music from entering the DSP directory; reduce long-tail priority in the algorithm; create a separate directory layer; de-prioritize/block search and discovery, etc.). All of these risks look a lot like institutions trying to stop the next generation of creators and industry breakthroughs. That doesn’t even take into account the moral dilemma of choosing who to “join” and who to “leave.”
However, option two may be more altruistic than it seems. For the aficionado with hundreds of streams, royalties are just a novelty. But for a hard-working, self-releasing singer/songwriter with tens of thousands of streams, a few hundred bucks already counts. Let’s consider a payment threshold, 1,000 streams per year is the point at which royalties are paid, and all royalties associated with artists below 1,000 streams are distributed to all other artists. Suddenly, those slightly more mature long-tail artists could make more money.
None of these options have challenges and moral dilemmas. But the direction of travel seems to be towards the “done” of the long tail. If this does eventually have to happen, let’s at least try to make sure these changes also benefit long-tail artists, not just superstars.