Without a doubt, the key definining topic of Electronic Dance Music (EDM) over the last few years
has been the dramatic plunge in income earned by EDM producers. The prime culprit is invariably identified as being the spread of illegal downloads and file sharing. Whilst I believe this is definitely a major factor, there is another key driver which is rarely mentioned. That is, EDM, along with many other types of entertainment, has become a classic “Long Tail” market.

Firstly, what is a “Long Tail“?

“Long Tail” is a kind of statistical distribution for a given variable. The type of statistical distribution you may be most familiar with is Normal Distribution or The Bell Curve -


A typical Bell Curve model would be the average weight of human males. There would be a few Gandhi-like wraiths in the sub-50kg category, a few “Its my metabolism, not the 10 Snickers Bars I eat each day” in the 120kg+ category, with the remainder concentrated around 70-90kg.

Whereas a Long Tail looks more like this -

The “Long Tail” concept has been popularised by Chris Anderson’s fantastic books The Long Tail and the updated version The Longer Long Tail. (The Long Tail: Why the Future of Business is Selling Less of More
)

So what characterises a “Long Tail” market? The perfect example is today’s music industry.  In the ‘olden days’ (up until, say 2000-2001), the majority of all sales were concentrated in the head of the graph.  You basically had albums by Michael Jackson, Madonna, Britney Spears etc and then the graph fell away dramatically to virtually nothing.  The market was essentially defined by a retailer’s inclination to stock or not stock a particular release.  As much as “The Best of Kriece Volume 1” is punctuated by understated, timeless, perhaps paradigm-changing production flourishes, it would have been highly unlikely to ever be stocked in Walmart.

Nowdays, the head of the graph is still dominated by the big names, however due to the exponential increase in choice available to the consumer, the graph has flattened and elongated – to reflect the consumer’s ability to access previously obscure genres and titles.  In simple terms, in a Long Tail market, Britney sells say, for argument’s sake, 40% less units than previously and that 40% is re-allocated to, say, 10,000 different artists making obscure genres such as Bolshevik Anti-matter Death Chillout or equivalent.

Why has this happened? One reason – the internet. The distribution of music over the internet via Itunes, Beatport etc has dramatically reduced distribution costs. There is virtually no additional cost (hard drives, servers & bandwidth aside), for Itunes to stock such obscure gems as “The Best of Kriece Volume 1” (a cracking listen by the way – get your copy now!). In the past, the retailer or wholesaler needed to have confidence that they could shift the CDs or vinyl produced before they would commit working capital or shelf space to a particular piece of music.

Due to two key reasons, EDM has become a classic “Long Tail” market. These reasons are -

1. The change in performance/listening media from Vinyl & CDs to mp3′s – Distribution

2. The democratisation of music production - Production

Traditionally, DJs used vinyl as their preferred medium. A producer or a label wishing to release music would have to get a minimum number of copies pressed at a vinyl pressing plant at considerable expense. There would have to be a degree of comfort that you would be able to shift all the units produced. Vinyl was (and still is) expensive to make, expensive to transport, expensive to stock at a retail level, expensive to buy for djs, heavy to cart around – but sounded great!

With the advent of the internet came the gradual shift from vinyl to cds to now, where mp3 format dominates distribution. The most relevant result of this for this discussion has been the deluge of release quantity now that the barriers to physical production and distribution have been removed. In the past, an EDM artist or label had to chose carefully which tracks to release due to the cost of production. Now that there are virtually no additional costs involved (aside from promotional expenses), there is no incentive for artists to sit on their “b-side” material. As long as the material is not so bad as to negatively impact the ‘brand’ built up by the artist, there is minimal harm in releasing borderline material. If the artist believes that the material will have a negative impact on their ‘brand’ they can simply release it under an alias.

The net effect of this has been (all other things equal) the spreading of available EDM-buying dollars across a massively larger pool of possible individual track purchases. For example – a middle of the road (neither a massive hit or a stinker) Progressive or Tech-house vinyl release averaged around 4000-5000 units about 8-10 years ago. In my experience, nowdays the average release (say 3-4 tracks on average) in the same genre would total about 200-300 (mp3) units across all outlets. Whereas 10 years ago my DJ friends and I would all buy a reasonably similar range of releases each month (save for the odd obscurity picked up overseas at a small record shop), nowdays near-infinite choice has seen dj’s disappear into the Long Tail, sifting through pages and pages of mp3 releases, resulting in highly disparate music purchase choices.

Unfortunately (or fortunately depending on your point of view), this phenomenon has been further compounded by changes in EDM production and composition.

Until about 8-10 years ago, EDM production was an expensive business. It required racks of gear such as synthesizers, compressors, eqs etc. Furthermore this gear was often difficult to learn to use without hands-on tutilage. This created a huge barrier to entry for new producers, keeping the active pool of producers in any given genre reasonably limited. This, along with the costs of releasing material, meant that if you had the means and aptitude to acquire and master production gear and release vinyl, you stood a strong chance of being able to make a modestly lucrative living.

However this all changed with the popularisation of computer-based production. Today it is possible to create music from initial concept through to production of a master recording, all in the average home computer. Being computer-based, naturally the programs are also able to be cracked (pirated) – resulting in the potential to make music for no upfront cost (assuming the computer as a sunk-cost). This put bedroom producers in third-world (and first-world) countries who were previously excluded from EDM production due to the high cost, on a virtually equal footing alongside established players with expensive, cutting-edge gear.

So the net-effect of all this has been an increase in the quantity of music released by each producer along with a massive increase in the pool of producers releasing music.

Accordingly, the ultimate effect (and the key point of this article), has been the demise of EDM production as a viable vocation. The “Long Tail” is so long that it is becoming increasingly unlikely that someone can earn a decent living from releasing music. Many producers have adapted and adjusted their model to rely more and more on performing to make up the difference. However it could be said that the majority simply move on to reliable, stable, 9-5 employment. From a personal perspective the most disappointing aspect of this has been the disappearance of my favourite producers who could no longer make a living out of dance music production.

As mentioned earlier, this would be bad enough without the ever-looming spectre of piracy. EDM piracy is a perfect example of classic Buddhist “Karma” in effect (ie – the law of cause and effect, rather than the cliched “Hippy Karma” involving some magic universal leveling force). If enough fans of “Producer X” decide to steal, rather than pay for his/her tracks, there is a strong chance that “Producer X” will not be able to continue producing music for a living and decide to do something more lucrative, such as street busking for example.

So is piracy a complete negative for producers? Strangely, I don’t think so. There are some positives. Let me give an example. A few years ago I was flown to Paraguay for a DJ gig during a South American tour. Over dinner, one of the people present told me he was a big fan of my music. In a moment of refreshing candour, he indicated sheepishly that he couldnt afford to buy my music so he downloaded illegal copies. This did not bother me for two reasons. Firstly, in countries such as Paraguay, it is simply not possible for the average person to spend US$1-2 to download a track. Secondly, it could be said that one of the reasons I was invited to Paraguay was that enough people had (most likely illegally) downloaded my music to create the critical mass to justify bringing me to the country to DJ.

I am very curious as to how the EDM distribution and monetisation model will evolve from here. My own feeling is that sources of income for producers which are not tied to a single music purchase will develop. For example, a monthly subscription to a particular artist or label which confers certain exclusive benefits (such as unreleased music, dj sets, merchandise) may become one of the new ways producers eek out a living.

As this is a complex topic I have not attempted to cover all key issues. As this issue evolves I intend to eleborate on this initial article. Please feel free to add your own comments or correct any factual errors.

This article has been heavily influenced by several books, particularly Chris Anderson’s The Long Tail.  You can also check out his fantastic blog (which I only stumbled upon yesterday actually!) – www.thelongtail.com

Recommended Reading –