@terry5mag: Purged: How a failed economic theory still rules the digital music marketplace

[Must read takedown of the “long tail” (aka utter shite) by the erudite Terry Matthews]

Unless you spent a lot of time listening to early ’00s techno-utopian babble, the Theory of the Long Tail probably means nothing to you. Yet if you live in the US or Europe and you run a digital music label, you’re living it – or the fallout from it – almost every day.

In 2004, Wired magazine editor Chris Anderson proposed The Long Tail, an economic theory blown up by futurist steroids. It theorized that with the introduction of the internet, blockbusters would matter less and everyone would sell “less of more.” The Long Tail prophesied “How Endless Choice Is Creating Unlimited Demand,” according to the subtitle of Anderson’s later book, which if true would turn the field of economics on its head.

For a practical example of what this all means, compare a brick-and-mortar record store like the old Tower Records vs. an online retailer like Traxsource. Your local Tower Records had to limit its inventory to take into account a finite shelf space. Their stock might have consisted of a couple hundred records. And each record didn’t get equal shelf space: your hippie boomer parents were going to buy more copies of Beatles records than all your Belgian techno records, so the store would stock and give more attention to the former. This “artificial” scarcity of physical products taking up physical space and depriving it from other products had bent consumer behavior out of shape for basically all of history.

Read the post on 5 Mag

@RobertBLevine_ : Apple Proposes Simplified Statutory Licensing Scheme to D.C.

Further reading from Chris Castle on music tech.solutions:  Are Legacy Revenue Share Deals More Trouble then They Are Worth?

“It’s entirely possible that the transaction costs of reporting royalties in revenue share deals (including productivity loss and the cost of servicing songwriters and artists) likely exceeds the royalties paid. My bet is that the costs vastly exceed the benefits.”

Robert Levine’s post about Apple’s new proposal for a simplified mechanical royalty rate for streaming services:

This afternoon, Apple submitted a preliminary proposal to the U.S. Copyright Royalty Board to simplify the way music-streaming companies pay songwriters and publishers — in a way that could make it more expensive for rivals like Spotify and YouTube to keep offering free streaming.

Right now, streaming companies pay songwriters and publishers between 10.5 percent and 12 percent of their overall revenue, according to a complicated formula. (Labels and other owners of recording copyrights negotiate their own terms.) The money is divided into public performance and mechanical royalties, then paid to collecting societies and publishers.

Apple, which has always had a gift for creative simplicity, wants to make this process easier and more transparent, according to a copy of the filing obtained by Billboard. The company’s proposal to the Copyright Royalty Board suggests a simple, “all-in” statutory rate that would be “fair, simple and transparent, unlike the incredibly complicated structure that currently exists.” It suggests a rate of $0.00091 per interactive stream, or 9.1 cents per hundred plays. The songwriting royalties for 100 streams would equal those for one download, which has an appealing simplicity.

Apple’s suggested royalty structure would make accounting simpler and more transparent, but it would also make it more costly to run a free service, since streaming companies would have to pay a minimum rate, rather than a percentage of revenue.

Read the post on Billboard.