Thinking Big (Data) in the music industry

The music business ain’t what it used to be. Today, streaming has become the method of choice for listening to music, and the album concept has been replaced by a much smaller and lower-cost unit of sale; the single. It is no coincidence that the height of music industry revenues coincided with the almost 100% dominance of the CD in 2000; it is much easier to track music consumption and collect royalties via a bar-coded physical collection of songs which requires purchase-in-advance before enjoying it on your home speakers.

The digital cat is out of the bag

Today the industry is dominated by streaming platforms such as Spotify, Apple Music, Amazon and Pandora which reach a greater audience than ever before. Promisingly, this has resulted in an uptick in music sales after a continuous 15 year drop. Yet music industry revenues are less than half of what they were in 2000. Why is this? Although price erosion plays a part of what has become a commodity product (remember paying 20 bucks for a newly released CD?), the primary reason is unlicensed, untracked consumption of music. Once music files became compact and easily replicated, streamed or downloaded over the internet, it was a short step before digital copies of music were made available to everyone everywhere, like printing unlimited copies of digital money. It is estimated that currently 50% (45 billions USD) of all music industry revenue is not collected due to unlicensed, untracked consumption of music.

The solution: herding digital cats?

Music will always be digital. It will always be quickly and easily copied and exchanged. It will only keep getting easier to do so. So what is the solution? How does the music industry continue to thrive, promote new talent and produce wonderful music that we all want to listen to every day? All participants in the business, from the joint-tokin’ Reggae artist to the Record Label Executive depend on music royalties to survive and keep the music pipeline filled. The answer is to embrace the digital age, and not shy away from it.

Thinking Big

The music industry is a perfect candidate for Big Data analytics; it involves numerous vested participants in a complex system that generates LOTS of data. Participants include performing artists, composers, lyricists, publishers, record labels, music retailers, online streaming platforms and billions of listeners located all over the world. Most of these participants are keenly interested to know where songs are going, who is listening to them, (legally) broadcasting them, and most importantly, who is paying for them (and who not).

The music royalty bucket; leaking like a sieve

A song can be likened to a bucket of data. In addition to the digital MP3 file itself, metadata is added to identify the song’s title, band or artist’s name, album name, genre, album track number, length, year of release, DRM signature etc. Royalty agreements are then attached to each song dictating what percentage of sales is distributed to each participant in the system; the record label, song publisher, recording artist, music streaming platform, composer and lyricist all take their cut. Management of the multiple royalty agreements associated with each song is in itself a complicated process; currently it is done inefficiently and often on an ad-hoc basis; it is estimated that 30% of music royalties are assigned incorrectly. This is an unsettling reality for the many participants in the music industry who depend on music royalties for their living.

Look who’s listening

To make the whole system work, the most important data must be collected; how often the song was consumed, by whom and via what channel. This is the hard part. Until just a few years ago, when the CD was king, it was much easier; songs were packaged together as “albums”, and sold via easily tracked physical CDs. Publicly broadcast music was restricted to tightly controlled radio and TV channels (i.e. MTV). Those days are over. Once dominating music sales with an almost 100% monopoly in 2000, CDs now make up a miniscule percentage of music sales. Songs are often broadcast over unlicensed, untracked radio and social media channels such as Youtube and Vimeo.

Music, meet (Big) Data

At Utopia Music, we believe the solution to the problems in today’s music industry is the same technology that got us into this mess to begin with: digital technology. We are harnessing the power of today’s internet-connected computers, artificial intelligence and Big Data analytics to monitor, identify and archive when and where copyrighted music is downloaded, streamed, played and broadcast over TV, radio, social media as well as physical venues.

Knowledge is power

Once our music consumption data collection system is in-place, a rich source of music intelligence will be available to record companies, artists and performers, distribution platforms, marketeers and concert promoters. Here are a few examples of the benefits;

● Capturing of uncollected copyright revenues

By monitoring and verifying the consumption of music 24/7 over online and broadcast channels as well as live performance, consumption data can be quickly correlated with a universal open copyright database. The result is that almost 50% of currently lost revenue can be recouped and accurately and rapidly channeled to the rightful copyright owners.

● Accurate targeting of marketing campaigns

By knowing exactly where an artist is most popular (countries, regions, cities, demographics), money spent on marketing campaigns such as billboards, magazines, radio, TV ads and interviews can be more effectively designed and targeted at consumer groups most likely to purchase new music or attend concerts by particular artist(s) and genre(s).

● Efficient tour planning

Touring has become an artist’s most important source of revenue, particularly with the dominance of streaming; consumers aren’t buying complete albums/CDs anymore, just the song(s) they want. Touring is, however, where most expenses are — promotional fees, venue, equipment and transportation rentals, security, lights, props, costumes, sound engineering, accommodation, food, insurance, the inevitable partying … the list is long. Intelligence that enables a promoter to plan performances where sellout audiences are guaranteed makes the difference between a tour that generates large profits and polishes a band’s image, and a loss-making tour that may sink an artist’s career; few promoters are interested in re-booking a client who didn’t make them money.

● Tracking musical tastes

A real time database of music listening trends on a global scale lets music industry participants monitor the heartbeat of the industry. Consumer tastes are fickle and constantly changing, and performing artists must constantly reinvent themselves to stay on top of the latest music trends. Being able to identify new popular trends at an early stage means artists can adapt their new recordings to satisfy evolving consumer tastes, and record labels and promoters can adjust marketing campaigns to plan events and promotional activities around the latest consumer demands.

By linking music consumption data to a universal, open database of music copyrights, we are creating a de facto industry standard for how copyrights are stored, managed, and monetised. Our goal is to upgrade the global music industry to the benefit of composers, musicians, producers, publishers, record labels and other stakeholders, while transforming the music industry’s rights management and royalty collection process.

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[1] Until very recently, processing terabytes of event data to produce actionable insights about complex systems within a reasonable timeframe was impractical; it simply took too long. Only in 2018 have stable releases of the software industries main open-source engines for Big Data processing, Apache Spark and Hadoop, become available. We are literally on the cusp of the era of Big Data.