What’s the long tail?
The long tail is the 100’s, nay 1,000’s, of low-value sync licenses that just aren’t being fulfilled. In other words those $20/$100/$200/$300 licenses for corporate presentations, short videos, internal productions that are being missed.
Why are they being missed – we believe primarily due to the fact that in the ‘offline’ world by the time a query is received, a call takes place, a discussion is had, a competitive pitch is won, a license is produced and then the music is delivered – then all potential margin in the license is no doubt gone. In other words why bother dealing with the low-value syncs if you are inevitably going to make a loss on the deal. We wouldn’t. If it costs you over $200 of time to get a $200 sync license then it’s dumb business.
However, technology can be transformative in this area. If you have the rights to do so, you can automate this whole process, eliminating any ‘cost’ in the low-level license and thereby ensuring that anything received is pretty much immediate profit for the licensor. How does this work? In the media world it’s called sweating the long-tail. Basically you make more and more money by selling the same asset over and over. Leveraging your assets. You own it, your costs are pretty fixed, any incremental money made if it doesn’t cost you more is pure profit.
So how can technology work? Simply put you can create what we call a ‘pricing matrix’ that can sit across your catalogue. In other words a series of pre-determined prices that you determine (and that you can constantly vary) depending on usage, duration, geography etc…. these can even vary per artist per track, it all depends on how detailed or simple you want to be. Such that when someone requests a track online for, say, “corporate presentation to internal audience of 100, single use” the system queries the pricing matrix and says – “great, that’s $25” – credit card in, license delivered, MP3/WAV delivered, cash received, tracking and documentation internally automatically sorted. A $25 transaction straight to the bottom-line, net cost $0. If you have the rights to do this with a catalogue then it seems daft not to have the option for potential clients to self-serve this (by way of counterpoint, we do not believe that high-value syncs should be handled in this way as these are much more ‘personal’ in nature). And importantly you can Do It Yourself.
It’s actually all pretty easy. If you can manage excel you can manage to set this up. Just as long as you have a system (conveniently such as Synchtank’s) that enables you to do so.
The long-tail is valuable if you can handle it efficiently. If you achieve 1% of your sync licensing in this manner then it equates to 1% incremental profit margin for you. If you’re making 10% profit as a whole then that’s a big difference!!!! 10% + 1% = 11%. All down to the efficiency of handling those smaller deals.
We often meet small businesses crying out for access to music and totally frustrated about their ability to access and license it. A need that needs answered. We can’t do it because we don’t have the music, but if you have the catalogue and the rights you can and we can enable it.