Friday, November 11, 2005

File Sharing Continues to Grow

...latest data from Big Champagne shows roughly a 40% increase in P2P usage over the last year.

Average simultaneous users using file sharing during July - October 2005

- U.S. - 6.7mm
- Global - 9.4mm

vs. Year Ago Levels

- U.S. - 4.5mm
- Global - 6.7mm

Saturday, November 05, 2005

Who benefits from "The Long Tail?"

There's been a lot written about The Long Tail, the theory that our culture and economy are shifting from "hits" to "niches."

The theory goes that the Internet, with its zero-cost shelf space, enables more artists to get distribution, and therefore sales, than is possible in the shelf-space constrained physical world. There are lower barriers to entry for artists, lower inventory carrying costs for retailers and lower costs of distribution, especially for digital music, which benefits artists, retailers and consumers. Only as more content gets exposed to more consumers does the true shape of the demand curve get revelead. People's interests, the theory goes, are not so mainstream afterall.

All of this seems great for the artists, writers and musicians, right? In theory, yes. All of those talented people who've been held back by "the man" can now self-publish their way into our living rooms and on to our iPods.

In practice though, the individual artists seem to be no better off than before - they still face the daunting task of "being heard" or at least, figuring out how to stand out from the crowd.

Does this mean that the only beneficiaries of The Long Tail will be aggregators and consumers? That no individual artist could ever sell enough to their niche to make a sustainable living?

Some say that it is too early to tell. That the "internet" hasn't broken a monster star yet.

Others point to success stories like where artists are achieving success based on "fan to fan" promotion, rather than top down corporate record label support/marketing.

My money is on the The Long Tail. When I say that, I'm defining it as an environment where increasingly curious consumers interested in content beyond the Top 10 utilize on-line outlets that both have the ability to "shelve" infinte SKUs and have the ability/algorithm to help interested consumers find relevant content/art.

I think, while only initially benefitting aggregators, "The Long Tail" will ultimately benefit more artists and more fans than the current system based on hits and scarcity ever could.