For most people, Chris Anderson’s 2006 book The Long Tail marked a new way of thinking about selling goods on the Internet. Being free of the physical limits of shelf space, he predicted, would alter what people bought. For music, this would mean the most popular music titles would become less popular as consumers were able to tap into vast online catalogs. In most corners of the business world, and especially in the music industry, The Long Tail was controversial. Would consumers actually start to ignore the hits?

A Billboard analysis of Nielsen SoundScan data going back to 2004 shows Anderson wasn’t correct on all points. Hit digital albums have lost market share to far less popular titles. But hit digital tracks have gained market share over the years. The top 200 tracks accounted for 14.5% of sales in 2004 and rose to 15.8% in 2005, 17.1% in 2006 and 2007 and 17.2% in 2008. Through October 25, 2009, the top 200 tracks’ share stood at 18.7%.

The top 200 digital albums have shown an opposite trend in market share, steadily dropping to 21.9% in 2008 from 28.7% in 2004. At 22.1%, digital albums’ market share through October, 2009 is slightly better than 2008’s figure.

These two trends imply album and track purchase decisions may be driven by different factors. The most popular tracks may be benefitting from a herd effect due to the viral nature of the Internet. The awareness generated by that small number of songs could drown out less popular songs. Album buyers show they have more diverse tastes and take advantage of the vast catalogs at online retailers. So consumers may prefer to sample the depths of long tail through albums, not by individual songs.

Any discussion of Anderson’s book and theories should include how the record label’s role has changed. A popular sentiment of The Long Tail is that artists have all the tools they need to self-release digital music. That is true. Barriers to entry have been lowered to the point where the costs of recording and commercially releasing music are negligible. As Anderson explained in The Long Tail, cheaper tools of production and distribution have greatly increased the supply of music found online.

But acquiring distribution and getting a sale are two different things. People tend to underestimate the amount of competition faced in digital music. Over 100,000 albums were released in 2008 alone – and about half of those were digital-only releases. Not only does a title have to compete against other new releases, it has to compete against the tens of thousands of well known catalog titles that are available online. It takes resources – both money and expertise – to rise above the competition and achieve sales commensurate to what career-oriented artists need. Such resources are the domain of record labels, who can still find success in the digital world.

While The Long Tail was less explicit about record labels’ role in a changing digital marketplace, in July Anderson told The Times that record labels “are now the least important part” of the music industry. That is true for those with very low sales goals. These days a more established artist, or a mere hobbyist, can circumvent a contract with a record label by using inexpensive digital tools and outsourcing some record label functions. For the more ambitious and the less established, a record label is still by far the best way out of obscurity.

Summary of Billboard’s analysis:

• As more digital albums are released, the more popular titles lose market share to the less popular titles. In other words, demand has shifted from the hits to the niches. The head (what Anderson would call the top 5,000 titles) has lost market share to the tail (all other albums). The head accounted for 77% of digital album sales in 2005. By 2008, the head’s market share had steadily dropped to 65%.
• Sales of digital albums have become less hit-oriented while digital tracks have become slightly more hit-oriented. The top 200 digital albums have accounted for a smaller share of total digital album sales since 2004. In contrast, the top 200 digital tracks’ share of total sales has nudged upward during that time period.
• Sales of individual tracks (those purchased independently, not as part of an album) account for the majority of digital music purchased in the U.S. Individual tracks accounted for 57% of all digital music sold in 2008 (assuming 12 tracks per album).
• In any given week, the top 200 digital tracks account for nearly one in four track purchases. To put that in context, Amazon.com’s MP3 store currently lists 9.99 million tracks. So, the top 200 tracks represent only 0.002% of what a large download store stocks.
• Even titles in the tail (below #5,000) have lost some market share recently. In 2008, the top 8,000 digital albums lost market share to lower-ranked albums. But it wasn’t the best-selling albums that suffered the most. Albums ranked from #200 to #800 suffered the biggest drop in digital album market share from 2004 to 2008 – between 25% and 34%
• While lower ranks have gained market share over the years, any one title has not gained much. For example, an album ranked at #9,000 in 2008 sold about 1,050 digital albums. Less than 100 of those units can be attributed to gains in market share over the previous four years.

An expanded version of this story first appeared at billboard.biz.

In August, women made up 56.1 percent of the Web traffic to music sites. Overall, music sites pulled in 42.5 million unique female visitors in August.

While it might seem like young girls would be scouring sites for the latest news on the Jonas Brothers, it is actually women 35-60 who make up about a third of visitors to music sites.

Females age 35-49 make up the largest group. More than 14.5 million women within that demographic visited online music sites in August. This made up 19.2 percent of all visitors to music sites during the month.

Less than a fifth (15.6 percent) of U.S. females 18 or older said they purchased music online within the past six months. Sixteen percent said they bought a music offline during the same span, per Nielsen@Plan Fall 2009 Survey. Slightly more than 8 percent of women watched or listened to music online.

The top two sites visited by women for the month of August were: AOL Music (11.8 million unique visitors) and Yahoo Music (9.9 million). MSN Music was a distant third with a unique audience of 3.9 million.

Virginia Harvey, Client Service, Nielsen Monitor-Plus

SUMMARY: The rise to stardom does not come arbitrarily, but rather is often the by-product of a carefully constructed plan that brings together a perfect blend of talent, timing and a great advertising promotion plan. Nielsen investigates how some of the more recent campaigns in the music world achieved success.

A sold out show or an album going gold, platinum or diamond is music to the ears of emerging artists and veteran musicians alike. But achieving that goal typically takes more than just great songs—exposure is a key contributor. In the February issue of Consumer Insight, Nielsen reported that music artists saw album sales climb as much as 700% one week after the Grammy’s aired on broadcast television. Now, Nielsen takes a closer look at the backstage-pass advertising that amplifies album sales, digital downloads, and concert sales.

Total concert advertising spend
In 2008, total advertising spend for concerts in combined print, TV, Internet, and outdoor tallied just over $207 million. April dominated sales with $23.2 million, which surpassed May—a close second—by 10%. Contributing $2.3 million to April’s total was spending for Neil Diamond’s Home Before Dark tour.

A review of the top three artists’ spending for 2008 reveals that Neil Diamond once again led total spending at $6.2 million, followed by Tina Tuner with $4.3 million and Trans-Siberian Orchestra (TSO) $3.6 million. TSO, which tours on a yearly basis during the holiday season, increased advertising spend in 2008 by 37%. The increase paid off, as 2008 ticket sales grossed $47.3 million—a 28% increase over 2007 results of $36.9 million.

Overall, monthly spending was fairly consistent, with one exception—January started the year slow with a $9.4 million outlay.

Veteran acts re-emerge
Tom Petty & The Heartbreakers’ 2008 tour proved to be one of the biggest of the year. With an estimated 32 U.S. shows and 25 sell outs, total ticket sales grossed $34.8 million. Helping to re-ignite the name—to about 97 million viewers—was a calculated move to play at the Super Bowl XLII half-time show.

Additional media vehicles that contributed to a successful tour included countless articles in magazines and online blogs about Petty’s recent greatest hits album and tour. From SPIN to Variety, Tom Petty & The Heartbreakers’ had a wealth of media exposure. Roughly two-thirds (64%) of their promotional spending was placed in newspapers and one-third was split between local radio ($223,000) and television ($141,000) ads.

The pay-off in publicizing is further revealed by a review of Tom Petty’s tour promotion ad spending in 2005 and 2006. In 2006, ad spending increased 61%, from $430,000 to $694,000, grossing $25.2 million in ticket sales—$3.2 million higher than 2005 sales.

Hot commodities
A new era of Tween fans have emerged with the introduction Hannah Montana and the Jonas Brothers. With the help of the Disney Channel, acts such as these have become a household name. The Hannah Montana show—with viewers that number upwards of an average 10.7 million over the past three years—has driven awareness levels so high that traditional advertising for the 2007/2008 tour totaled only $430,000. An additional $2.7 million was spent promoting various Hannah Montana paraphernalia, such as toy figures, playsets and perfume. Hannah Montana sold out all 70 shows from October 2007 through January 2008 and grossed $55.2 million in ticket sales.

While the Jo Bro’s have been associated with Disney (collaborating to create a Disney Channel original movie), the bands’ main source of promotion was TV, magazine, newspaper, and radio ($1.3 million). As impressive as their third album was—selling 525,000 copies in just the first week of its release alone—they sold out only 54 U.S. shows out of 82 and total ticket sales grossed $41.9 million. While both acts are hot commodities, girl power triumphs and solidifies the importance of exposure and familiarity.

Rise from obscurity
When Apple introduced the iPod in 2001, their eye-catching roller-skating, freestyle silhouette advertisements paired with memorable songs transformed the digital download world—and brought success to many little-known artists. Most notable was the release of the third-generation iPod Nano, when Apple featured the single 1234 from Feist. Prior to the commercial airing in September 2007, the single generated 60,000 digital downloads. After the commercial hit the airwaves, downloads increased ten-fold—rising to 638,000 from September to December 2007, according to Nielsen.

With the success of that campaign, Apple continued to spotlight up-and-coming bands. When The Ting Ting’s hit single, Shut Up and Let Me Go, appeared in an iPod commercial in April 2008, it peaked at number 55 on the Billboard Hot 100 list. And in September 2008, the newest fourth-generation iPod Nano (Chromatic) line introduced the band Chairlift with a 30-second commercial that featured the song Bruises, which was just enough to send the song to the top of the Billboard Bubbling Under Hot 100 Singles chart.

Movie soundtracks can also have a profound affect on the popularity of a song. In February 2008, M.I.A released the single Paper Planes, which gained commercial attention when it was featured in the film and trailer for Pineapple Express. Digital copies soared from one week to the next selling 58,800 the week prior to the opening of the movie to 102,000 copies during the week of opening day—a 74% increase. From the time of the film’s opening week in early August, which included $6 million in TV ad spending to the end of September, digital copies spilled over to one million. Several months later, the song appeared in the film and soundtrack Slumdog Millionaire gaining awareness once again. The song eventually peaked at number four on Billboard Hot 100 and was nominated for the Record of the Year during the 51st Grammy Awards.

Chart toppers
The right exposure has the power to elevate a band to a level of success not possible otherwise. Finding the best promotion mix is vital. From targeting the right audience and selecting impactful platforms to delivering creative messages that resonate—understanding the consumer is the fundamental building block from which all successful programs begin. Whether the goal is instant stardom, re-introduction or business-as-usual, the ability to top the charts is all about creating awareness.

When comparing unique visitors of the music.myspace.com subdomain to other sites within the music category in June, it ranked third behind AOL Music and Yahoo! Music and ahead of popular music sites like MTV Networks Music and Pandora.com.

People between the ages of 12 and 17 were 2.4 time more likely than the average active Internet user to visit music.myspace.com. Visitors between 18 and 24 were 2.2 more likely than the average Internet user to visit the site in June.

On the video streaming front, with 120.1 million total streams, Myspace.com was the No. 1 social media site when ranked by streams for June 2009. It was also the No. 1 social networking site when ranked by unique viewers of video content, with 12.9 million viewers for the month. Facebook was the fastest growing social media site by both total video streams and unique viewers of video. Total streams increased 434 percent year-over-year, from 10.1 million streams to 54 million streams. Unique viewers of video increased 397 percent, from 2.4 million in June 2008 to 12 million in June 2009.

Twitter’s Big Move

Among the top 10 social media sites, Twitter.com was again the fastest growing, increasing 1,928 percent year-over-year, from 1 million unique visitors in June 2008 to 21 million unique visitors in June 2009–making Twitter the fourth most visited member communities site in June. Facebook continued to lead as the No. 1 U.S. social networking site for the sixth month in a row, with 87.3 million unique visitors in June 2009.

Facebook No. 1 For Time Spent

Facebook was also the No. 1 social networking site among the top 10 when ranked by average time per person, with visitors spending an average of 4 hours and 33 minutes on the site in June. This is a 240 percent year-over-year increase. The average time per person on Twitter increased 522 percent year-over-year, from 5 minutes and 2 seconds in June 2008 to 31 minutes and 17 seconds in June 2009, making it the fastest growing by time per person among the top 10.

*Note: Effective with June 2009 data reporting, Nielsen has made several enhancements to the NetView and VideoCensus services, including a panel that is 8 times larger, more granular reporting and improved accuracy and representativeness. These enhancements provide the highest quality data to our clients and the marketplace. For some sites, trending of previously-reported data with current results may show percentage differences attributable to these product enhancements and should only be compared directionally.

Nielsen Buzzmetrics analysis shows that more than 16% of tweets over the past 24 hours reference Michael Jackson, and less than 2 percent of Tweets mention Farrah Fawcett and Iran.

A Topper of Charts and a Major TV Draw

That Jackson’s passing dominated the web is no surprise, as he has been a major media draw for decades. According to Billboard, over the course of his solo career, Jackson charted 47 singles on the Billboard Hot 100, 13 of which went to No. 1. As part of the Jackson 5, he earned an additional four No. 1 Hot 100 hits.In addition to his unparalleled dominance on the Billboard music charts with albums like Thriller, his past television appearances have attracted millions of curious viewers eager to see more of the reclusive, yet ubiquitous, star.

Nielsen has issued a year-end look at the most popular trends among Americans during 2008, covering everything from the top TV programs to the most popular consumer packaged goods.

William P. Young’s ”The Shack” was the top-selling fiction book through November 30.

Among non-fiction books, “A New Earth,” by Eckhart Tolle was the top-seller.

The audio version of Tolle’s “A New Earth” was the top-selling audio book of the year.

Top 10 Book Sales: Adult Fiction

Top 10 Book Sales: Adult Non-Fiction

Top 10 Audio Book Sales: Adult and Juvenile

View the press release.

Relive the greatest hits of 2008 — stay tuned on Nielsen Wire for more Tops In 2008 coverage.

Look ahead to the new year with Nielsen Wire’s 2009 Industry Outlook series.

It’s official: Americans love their carbs.  The Bread and Baked Goods category ranked number one for 2008 — both in terms of consumer purchases and retail sales.  According to Nielsen, 99% of U.S. homes purchased bread/baked goods at least once during the 52 weeks ending June 28, 2008.  The Bread/Baked Goods category raked in $18.3 billion in sales through November 1.  Other popular CPG categories include paper products, snacks, and carbonated beverages.

Scarborough Research, a joint partnership with Nielsen and Arbitron, also reported on the top U.S.  markets for online shopping.  Washington, D.C. and San Francisco ranked first and second, respectively, with 39% and 35% of adults spending $500 or more online in the past year.  Nationwide, 25% of adults reported spending $500 or more online in the past year.

Top 10 Consumer Packaged Goods Purchased by U.S. Homes

Top 10 Consumer Packaged Goods Sold in U.S. Retail Stores

Top U.S. Markets For Adults Who Spent More Than $500+ Online Last Year

View the press release.

Relive the greatest hits of 2008 — stay tuned on Nielsen Wire for more Tops In 2008 coverage.

Look ahead to the new year with Nielsen Wire’s 2009 Industry Outlook series.

Sony’s Playstation 2 was the top game console of 2008, claiming 31.7% of all measured console minutes, according to Nielsen.  The Xbox 360 and Wii ranked second and third, respectively, with 17.2% and 13.4% of all usage minutes between January and October of this year.

Blizzard Entertainment’s “World of Warcraft” was the most popular PC game title of the year, drawing an average of 0.723% of all PC gamers per minute between January and October 2008.

Among mobile gamers, “Tetris” was the top game for Q3 2008, in terms of share of revenue. 

Top 10 PC Game Titles: U.S.

Top 10 Mobile Games By Revenue Share: U.S. – Q3 2008

Top Video Game Consoles By Usage

View the press release.

Read coverage of Nielsen’s findings in Forbes.

Relive the greatest hits of 2008 — stay tuned on Nielsen Wire for more Tops In 2008 coverage.

Look ahead to the new year with Nielsen Wire’s 2009 Industry Outlook series.

Google was the most popular website with U.S. Internet users, drawing the largest audience (120 million unique visitors per month, on average) through October 2008.

As of 2008, the most prolific content downloaders in the U.S. live in California, according to Scarborough Research, a joint partnership with Nielsen and Arbitron. The San Francisco, Oakland, and San Jose market had the highest percentage (32%) of adults who had downloaded podcasts, video games, music/other audio clips, movies, videos, or TV programs in the past month.  The San Diego and Austin, Texas markets tied for a close second place (31%).  Nationwide, 24% of adults have downloaded online content in the past month.

Top 10 Websites: U.S.

Top U.S. Markets For Content Downloaders

View the press release.

Relive the greatest hits of 2008 — stay tuned on Nielsen Wire for more Tops In 2008 coverage.

Look ahead to the new year with Nielsen Wire’s 2009 Industry Outlook series.

Motorola’s RAZR V3 series handset was easily the most popular mobile phone in use in the U.S., as of Q3 2008.

In October, more than 15.2 million American mobile Internet users visited Yahoo! Mail, making it the most popular mobile Web destination that month.  Google Search, which drew more than 10.5 million mobile Internet users in October, ranked second. 

Among master ringtones — 20-30 second excerpts of recorded songs — “Lollipop,” by Lil Wayne, featuring Static Major, and “Low,” by Flo Rida, featuring T-Pain, were most popular.

Top 10 Mobile Phones In Use: U.S. – Q3 2008

Top 10 Mastertones

Top 10 Websites Accessed Via Mobile Phone: U.S. – October 2008

View the press release.

Relive the greatest hits of 2008 — stay tuned on Nielsen Wire for more Tops In 2008 coverage.

Look ahead to the new year with Nielsen Wire’s 2009 Industry Outlook series.