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Measuring sound: how data and streaming is impacting the music industry

By John Reynolds |

February 15, 2017 | 7 min read

From Spotify to Deezer to Apple Music to Pandora, streaming services continue to disrupt our musical landscape. The streams of data they generate, however, will have the biggest impact on the music industry.

Streaming services have taken a well-aimed kick at the music establishment, with the likes of Spotify, Deezer, Apple Music and Pandora all making it possible for artists today to have a hit without radio airplay, media coverage or, indeed, the public having even heard of them.

Now the dominant form of digital music listening, sales from on-demand streaming offset physical sales for the three music giants: Warner, Universal and Sony.

Advocates say these services have democratized music, driving the success of little known bands such as Oxford, England indie rockers Breaking Glass who this year were dubbed a streaming sensation by Music Week.

But critics lambast some of streaming’s major players for paying peanuts in royalties, while Radiohead’s Thom Yorke famously dubbed Spotify “the last desperate fart of a dying corpse”.

What there is no debate about, however, is the importance of data in this new musical landscape. Penning a catchy tune may still be fundamental to an artist’s success, but any artist serious about their career is utilizing data from streaming services to help sell their wares.

“Every time someone starts a station on Pandora that person becomes an addressable audience member for the artist,” says Lars Murray, the vice-president of industry relations at Pandora, the US internet radio service which recently moved into on-demand streaming, taking on the likes of Spotify and Apple Music.

Driven by data

Data is not only disrupting the relationship between artist and A&R man, it is also redefining the relationship between listener and artist, as well as having a profound impact on commercial tie-ups.

“We have a big data team,” says Christian Harris, vice-president for Nordic countries at Deezer, which has over 43m pieces of content in its database. “It is a critical part of how the business works, not only from a content perspective but also from a marketing and product perspective.

“The presentation of content within Deezer is driven by data, the selection of what marketing activity and content to promote is driven by data, and the choice of how and when to select specific genres is also data-driven.”

For artists, streaming services provide an array of data to chew over which can fundamentally help them better connect with fans.

Pandora, for instance, offers detailed listener statistics so artists know which of their songs are resonating, as well as a feature that allows artists to geo-target messages to fans.

These messages are interspersed between songs played on Pandora and can be shared on social media, guiding a demographic of listener to new material or gigs from an artist.

Murray says data gets used for the “core stuff” an artist wants to do, whether that be about selling tickets, selling units of records or selling merchandise. “Some of our best performing artists’ audio messages are just artists talking about music and something they are going to do.

“We educate the artists about it and let them run with it and show us what they do best.”

Perfect matches

Like Pandora, Deezer also offers artists listener data and works with its record label partners to crunch the data to pick up on artists it thinks Deezer should be working with.

And for the artist whose career is on the skids and who’s not getting much airplay, Deezer offers paid sponsored airplay so they can upload music and monitor its performance on the platform.

Like its rivals, data sits fluidly through US online radio broadcaster iHeartRadio. And like its rivals, iHeartRadio argues that it can leverage data to create “perfect matches” between artists and brands.

Alissa Pollack, executive vice-president of global music marketing at the New York headquartered internet radio platform, which is also moving into on-demand subscription music services, says: “We can really use it to identify artists that appeal to specific demographics, markets, formats. We can find out what artist they correlate with. If a brand wants to be fresh, fun and organic, we can get down to that level.”

In November last year Spotify struck a data-centric deal with WPP’s Data Alliance which would leverage listening behaviors of Spotify’s 10 million users in 60 countries. So how the tempo of music affects moods, for example, could be married with WPP data, such as consumer shopping analytics, to help brand and agencies better plan campaigns.

Ed Meesman, the global general manager of digital at WPP-owned marketing solutions company KBM, explains: “We can get insights on sets of consumers, identifying consumers that bought a certain product over a period of time, for example.

“We can then push that into Spotify and Spotify will help us understand the music listening attributes of those consumers – what type of music they listen to and how often.”

Evan Hanlon, managing director of strategy and platforms at GroupM, says addressability and “the power of deals focused on leveraging data to allow smarter buying in those spaces” means we will see a more concerted effort to “make sure the same sophistication we bring to other types of digital buys also applies to streaming audio”.

In a space as disruptive as the music industry, it would be difficult to say for definite that streaming will remain part of the fabric for years to come. But the mood music points to that.

Last year Kanye West indicated the importance of streaming when he released his latest album, The Life of Pablo, exclusively on Jay Z’s Tidal (granted, West is part owner of the company), while speculation has linked Google to ponying up $500m for SoundCloud.

Guiding creative decisions

Should streaming continue to dominate, the received wisdom is that data will act as an ever more important glue between the creative and commercial worlds.

Hanlon points to music replicating businesses such as Netflix, where data is guiding creative decisions. He says that if you think of data from an advertising perspective, you’ll realize it has much broader enterprise applications. “It is not just the marketing department that is thinking about it. The technology department and the product development department are thinking about it.”

In the short term, Harris argues, data needs to become “more intrinsic to the product,” as opposed to simply acting as a guide to what music tastes consumers might have.

“Our objective,” he says, “is to not only to know the type of content you like but the type of content you like at this moment.

“With that kind of information we can actually understand a lot more about the consumer.”

Pollack, a 2016 Clio Music juror, meanwhile says the quality and quantity of the data streaming services are able to mine will grow with the development of the media. “I think with the expansion of radio to more devices and platforms we’re going to obviously be able to collect new and richer data around those listeners and their music tastes and behaviors.”

This article was originally published in The Drum magazine.

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