It’s no secret that the music industry is in massive turmoil. For years, artists and music labels have had to adapt to one thing after another: illegal MP3s, paid downloads and now, streaming media platforms and subscription services. And with each new business model, content creators have to figure out how to get paid.
Streaming music offers a potential richness that music labels are just waking up to. Once, there was no way to know who bought a CD, attended a concert or made a mixed tape. Now popular streaming platforms like Pandora and Spotify have a giant opportunity to gather information about consumers’ listening habits. There’s even potential to track consumer habits beyond steaming platforms and learn who attended a concert, posted a photo to Facebook or bought a band’s t-shirt.
The business opportunity has not gone unnoticed. In the past year or so, Apple acquired Semetric, a music analytics platform; Pandora acquired Next Big Sound, a service that tracks the popularity of music online and in social media; and Spotify acquired The Echo Nest, a music analytics service that helps generate recommendations.
Labels and analytics companies are also partnering to address streaming’s potential. Universal Music Group (UMG) and the Havas Group launched the Global Data Music Alliance, a partnership that combines UMG’s data on its artists and music genres with listener behavioral data from Havas. The data being mined includes music and video sales, social media, broadcast play on radio, ticket sales and merchandise sales.
“We want to continue to find new revenue and marketing opportunities for all of our artists around the world by leveraging our industry-leading Big Data tools and working with forward-thinking companies,” said Lucian Grainge, Chairman and CEO of UMG, in a press release early this year.
Finding New Music, Opening New Markets
With better insight into how music is consumed, and by who, companies can do a better job of suggesting new artists to their customers. By mining and applying that data, the music business can help itself in two ways: giving new artists exposure and building loyalty with listeners addicted to fresh sounds.
Big Data was a big part of the conversation at the recent Midem music conference in Cannes this year. In a session called Big Data Sets the Pace of Music, entrepreneurs and music executives agreed that data had already transformed the music industry in dramatic ways.
“I don’t think there’s a greater scale of data then the music industry. Music is all around us. It’s there when we wake up in the morning and the alarm is going off,” said Jennifer Hanser, Head of Strategy & Partnerships for Bitly. “As more of our physical world comes online, there’s even more data the music industry will have access to. Being able to harness that data to understand the audience on a one-to-one basis is going to be really powerful.”
The Power of Playlists
At Spotify, data let the company see just how the surprise hit song Royals, by then-unknown artist Lorde, exploded on its streaming platform. The single was added to a hugely popular playlist maintained by a Spotify user, which led to other users discovering it and then sharing it. Massive amounts of streaming caused the whole cycle to repeat over and over.
“The amplification of that was really what led to the process of ‘Royals’ breaking big on Spotify,” said Steve Savoca, Spotify’s vice president for Content & Distribution. “It really showed us the power of playlists that we always felt was there.”
Another music service, Saavan, focuses on Hindu music in the Indian market. The company has 15 million users and has embraced Big Data as a way of enriching their listening experience.
At its headquarters, Saavan Co-Founder & CEO Rishi Malhotra said, the company has a series of command centers that let it monitor real-time consumer behavior and listening. It now uses that information to send out personalized recommendations that have increased listening time across its user base.
“Data has to be part of the culture of your company,” Malhotra said. “Your whole company should be eating data for breakfast.”
Image credit: Justin Higuchi