I just started reading Chris Anderson's new book The Long Tail . While I agree that the era of the blockbuster is gone and the future is about selling less of more, I have a practical issue with it. In order to take advantage of his theory, indie labels need to be able to manufacture the CD's to sell and this manufacturing requires a prohibitive up-front cost.
The label is in a situation right now where it has missed several thousand dollars in sales because it doesn't make sense to lay out the cash to run 1000 copies of older catalog that will take a year or more to sell. This may not seem like a ton of money to some, but it all hellps pay for publicity, retail promotion, advertising and phone bills. While we'd probably make the pressing money back within the first few months, the true result to the bottom line nowhere nears the negative impact on cash flow.
At the retailer level(Amazon, Netflix) the model holds. On the producer side, it's clearly not worth it. I need to either shift these titles entirely to digital distribution, or find a way to manufacture quality short runs at reasonable prices.