John Reynolds explores how data and algorithms are shaking up the music industry, as tech startups replace radio and A&R execs as the gatekeepers of music discovery.
If video killed the radio star, data could well determine the next stars of the music industry.
A string of new apps and platforms are using algorithms – as well as virtual currency, and social chat – to shake up the music industry and predict the next Ed Sheeran and Sam Smith while potentially revolutionising the live music experience.
Radio air plays and sales, once the pre-eminent gauge of an artist’s success, are being gazumped by data-tracking services, which are being hoovered up by industry leaders Apple, Spotify and Pandora whose executives tout them as the hottest thing in music right now.
These new data-focused companies are posing profound questions about the role of record company A&R executives and radio as gatekeepers of new music, but for brands they spell plentiful opportunities.
Liv Buli, a data journalist with Next Big Sound, the Pandora-owned analytics platform which tracks music lovers’ digital footprints, says that for many years the only data available to the music industry was “radio spins and sales”.
“With the rise of social networks and streaming platforms however, there is resulting information that allows artists and their teams to more accurately and comprehensively track how fans are engaging with content.”
Detecting the next big thing
New York-based Next Big Sound is one of the more prominent of this new wave of companies, and claims its data has predicted the success of Ed Sheeran, The Weeknd and Sam Smith amongst others.
Next Big Sound tracks everything from an artist’s Soundcloud, Spotify and YouTube plays to mentions on Facebook, Tumblr and Twitter, and even Wikipedia page views, before crunching these numbers via a ‘patented’ algorithm to magic up the new Taylor Swift.
Buli, who works with its “data scientist team” with a remit of bringing clarity to the morass of the analytics, claims its data – which is sold to record companies – has an 80 per cent success rate in predicting acts that will make it into the US Billboard chart within a year of being identified.
While its heady strike rate can’t be independently identified, internet radio giant Pandora was sufficiently wooed to buy the company earlier this year, clearly seeing the wide potential of the data.
“It [the data] can also be valuable in making other business decisions for an artist, such as ‘what should my next single be?’ ‘which artists should I tour with?’ and ‘what platform should I use to reach fans?’” adds Buli.
Next Big Sound, with its data tracking, is just one of a number of disruptive companies which have gained credibility within the music press.
A wave of competitors
Data is also the cornerstone of British startup app Dice, an all-in-one gig guide and ticketing service in London and other cities whose big selling point is shutting out the secondary ticketing market, a premium cost which is a bugbear to many.
Users simply scroll down the app, tap on one of the hundreds of gigs on display, and then purchase tickets which are stored within the app so they can be scanned at the door.
Founder Phil Hutcheon, a former music executive who speaks with a yo-yoing accent cultivated by travelling the globe with bands, explains, “it’s pretty disruptive coming to this space and not charge a booking fee, only be mobile, and eliminate the secondary market.”
Like Next Big Sound, Dice appears a ‘frenemy’ to the music industry, on the one hand working with artists and managers to plot an artist’s career through data while on the other trying to kill off Viagogo and other secondary ticket sellers which, according to Hutcheon, are anathema to Dice artists like George Ezra.
“What we do is help promoters and artists and managers make better decisions, like how much tickets should cost, what day of the week they should go on sale, or how much should be spent on marketing. A lot of that has previously been based on habit as opposed to real data.”
Bands and artists appear to welcome the transparency – and financial control – that Dice offers. Royal Blood used Dice recently to help sell out a show in 39 seconds, while new electronic sensation Years & Years have used Dice to help engineer their speedy rise from pokey pubs to selling out stadiums.
The riches on offer, whether it’s being snapped up by a big beast in the sector or striking a deal with a major record label, has enticed waves of startups to try and strike gold.
Dice is competing against another newbie, Jukely, which offers a monthly subscription service for gigs, while others gaining traction include Portuguese startup Tradiio, which uses virtual currency as a guide to success, and Cymbal, whose tagline is ‘music discovery powered by friends, not algorithms’.
Heavyweights Spotify and Apple are posing further competition as both offer discovery functions alerting users to new music while the likes of Universal Music have their own data tracking services monitoring new acts.
Brands wanting to hear the music
Many of the new music startups have initially relied on investor seed money – Robbie Williams’ manager Tim Clark is an investor in Dice – but now a slew of brands seduced by being associated with the next big thing are knocking on their doors.
Buli says: “We’ve found that the most innovative brands are looking to work with artists at a much earlier stage of their career than previously. We work with brands like Pepsi and American Express to help them identify or verify up-and-coming artists that have a high likelihood of success.”
Dice, meanwhile, shares its data with Red Bull to help showcase events in the UK.
Hutcheon explains: “When Red Bull announces a new show, we can send anyone who is signed up to the Red Bull database on Dice notifications to let them know what is coming up. We can send notifications and use geo-sense locations to send them messages to use a certain hashtag if there is a campaign going on.”
Like any music executive worth his salt, Hutcheon is cognisant that a brand tie that jolts could tarnish his business. “We say ‘no’ more than ‘yes’ to brands. We want to make sure the tone is right.”
Tradiio, meanwhile, is funding its venture through a mix of commercial partnerships with “smaller” brands and a tie-up with Universal Music in its home country of Portugal.
Strategy manager Aziz Morsly says: “We haven’t found a bold enough brand that is happy to take risks with new artists who don’t have any traction for the moment.”
The music industry is ripe for innovation and a big target for disrupters. But in such a highly competitive industry, there is bound to be winners and losers.
The winners will be those that either foresee trends, bring innovation to the market, or are simply fortunate enough to be acquired by one of the big players.
This feature was first published in The Drum's 'Sex, Drugs and Rock'n'Roll' issue, published on 19 August.