The digitisation of recorded music: studying the ‘long tail’ effect

Digitisation, in the form of online retailing, has long been understood to deliver welfare benefit to consumers. Greater consumer access to content has led to an important work on the “long-tail” phenomenon: while the choice set faced by consumer was limited to the shelf-space available in brick-and-mortar stores before the advent of the Internet, consumers can now access and benefit from a much larger set of products online. Accessing this larger set of products would naturally amount to important benefits to consumers. Some research finds that the benefit consumers obtain from access to a long tail of additional varieties of books may be as high as $1.03 billion per year in 2000.