From Big Pink to big data:  How crunching numbers helps the music industry

The Loser Now

Bob Dylan said that the times were a-changin’ in the mid-1960’s.  Truer today than he, or anyone could have imagined, the world of the musician is in a state of transition.  Driven, in part, by emerging data-collection technology, the music industry is working to use data to its advantage.  The impulse is clear:  music sales are in a sort of free-fall.  Since 2003, the music industry has lost $6 billion in sales.   Traditional music sales are clearly not the pony on which to place a bet.  What, then, is the alternative?

Blowin’ in the Wind

The answer for the industry, at least right now, lies in the data.  In much the same way the devil is in the details, the answer for music is in the numbers that get culled and crunched.  So, for an industry known for creativity and subversion, perhaps the most counter-cultural move to be made is the one away from artistic expression as a means of generating revenue and toward data-driven analytics.

Princes Kept the View

While all women and barefoot servants come and go, Spotify keeps watch.  A global presence with over 24 million subscribers, including six million users who pay for the service, Spotify is much more than a music streaming service.  Spotify owes much to its success with data collection.  It might be said that Spotify is more a data-driven model than a music-driven model.  By monitoring and adding content, Spotify keeps users engaged and listening.  The listening habits of users are fodder for the number crunching analytics the company employs.

The Nuts and Bolts

Hadoop BI and Luigi are the twin engines that help Spotify figure out what works for listeners.  A business intelligence application and a workflow manager, respectively, both programs consider the habits of Spotify listeners.  The collected data is user-centric, which is to say that the data culled by the programs drives Spotify’s music recommendations, radio playlists, and trend forecasting.  Data collection using real-time analysis predicts user preferences and leads to smarter song recommendations; which leads to more users; which leads, ultimately, to more revenue for artists.

Up Next on the Main Stage, or The Nominees Are . . .

What is Coachella?  Is Coachella a hip, hot, desert festival?  Or is it more than that?  What about the Grammy awards?  Is the Staples Center the venue to celebrate artists and their work, or does the awards show merely reflect the tastes of subscribers to music streaming services?

Predicting Tastes and Trends

Spotify uses collected data to predict listeners’ preferences.  Predictions extend to award shows.  With data indicating song popularity and frequency of play, Spotify boasted accurate Grammy predictions in four out of six categories.  Not too shabby.  In a similar way, data that analyzes tastes and preferences can go a long way in helping festival organizers plan their shows.  Festivals like Coachella are carefully curated, and planners necessarily want to put the biggest draws on the main stage in the prime timeslots.  From the standpoint of selling tickets, it only makes sense to parse the listening trends of subscription subscribers in order to maximize festival revenue.

Taking Aim with Targeted Ads

Awards and festivals represent two ways in which subscription services utilize big data.  Another way in which data impacts the music industry is through targeted advertising.  Music is a social medium.  In a time of great connectivity, the music industry is able to capitalize on social trends through integrated advertising and brand engagement.  Instagram incorporates ads targeted at specific demographics.  If the music industry is able to make use of targeted ads on a variety of social platforms, new revenue streams for artists will emerge.  Using data from social media, the industry will be able to keep pace with trends and market music to key demographics accordingly.  It is no accident that some artists seem to be everywhere. Taylor Swift, for example, is an unshakable presence, and her success is due to her ability to appeal to a wide market because she is marketed widely.

Later to Win

The music industry is faced with the reality that listeners experience music in ways that evolve with technology.  Record stores struggle to keep their doors open.  It is a challenge to buy anything other than the most current, popular music at big box retail locations.  Therefore, the industry must change with the tastes and the times.  Listeners love subscription services and social media outlets.  To win for the artists by increasing existing revenue and finding new revenue outlets, the industry must roll with the changes.  There seems to be no turning the tide or, at least, no direction home.  For the music industry to be profitable, let alone for it to recoup lost revenue, big data is the best solution.

Robert Cordray
Robert Cordray
Robert Cordray is a former business consultant and entrepreneur with over 20 years of experience and a wide variety of knowledge in multiple areas of the industry. He currently resides in the Southern California area and spends his time helping consumers and business owners alike try to be successful. When he’s not reading or writing, he’s most likely with his beautiful wife and three children.

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