How Can Big Data add $7 Billion to the Music business?
Ever thought about repairing the catastrophe that music is today with Big Data?
Music is the most social of all our media options with huge loyalty and penetration. Music has the power to connect the world and big data could unlock that potential. If realtors can hook up with lifestyle brands and architects, why couldn’t brands find a way to team up with music and musicians? The partnering possibilities are limitless.
When you really think about data monetization, the music industry could explode! What music is lacking is the diverse revenue opportunities beyond pure consumer models like subscription and sales.
According to the RIAA, in 2003 the music industry was at $13 billion, currently it is below $7 billion, that’s a major sea change! The failure is the lack of Big Data usage. Pay revenue models like CDs and iTunes is a shrinking market and the consistent bickering about royalties is stamping out their ability to see the big picture. Subscription models can’t possibly be sustainable as a compensation method for music producers, signed or independent.
Nielsen discovered that labels which choose to remove an artist from streaming services may squeeze out eight percent in extra sales, but are causing the remaining group of listeners to visit destinations where they can illegally download that artist’s tracks. Music influencers have stated a change in approach must happen. Jared Leto, actor, director, and musician said recently for Adweek, “When commercials stop being advertising, they can be art.”
Big data could have the potential to surpass all the revenue lost from physical sales. Through the use of collaborative marketing, social media and mobile ad tech, you could tremendously leverage, the digital advertising market. Wilson Cheng, from weeSPIN says “The velocity, volume, and variety of data associated with music, listeners, and music influencers present a huge opportunity to extract meaningful insights that can deepen user customer engagement, fueling new business models and creating data-driven brand awareness.”
Since data isn’t limited to confined structures of the old music industry thinking, there’s tons of spaces to innovate in and for. At present, music services are monetizing at surface-level, focusing only on what people are listening to and where they are listening. The subscription space is a huge step backward toward what hasn’t worked for the other music outlets like Pandora, Spotify, Rdio, Beats Music, and others. Streaming revenue margins don’t improve with scale, and it doesn’t look like subscription models will compensate artists fairly anytime soon.
Consider Instagram who in the last 2 years has become a volcano for advertising and brand marketing. Companies are seeing more growth there than anyway else and last year the social networking tool launched integrated, carefully placed advertising that slide seamlessly with the users’ news feeds. Besides using obvious banner ads and subscription fees, brands are reaching the customer organically by making genuine business relationships with social influencers. The same idea may be up next for music.
So theoretically, by connecting social context with consumer behavior, data can also reveal the DNA of music for targeted demographics. This is like the Rosetta stone for powerful audience engagement strategies that strengthen awareness and loyalty.
The artist could choose whether they want to participate in this data revenue program, and receive fair compensation based on their own engagement with their audience, and each song played via brand channels (i.e. Playlists, stations, etc.) can generate revenue style clicks through distribution platforms like Tunecore or weeSPIN. This allows artists of all sizes to monetize directly from brand engagements generated by their songs, without mixing their art form with distracting audio or rich media ads. Brands can pay for analytics through platforms like these to help build music brand profiles by selecting target demographics, territories, social interests, age groups, and so on.
Really, this is well worth your consideration, ever just think “why should I bother with looking at Instagram” or any other social network? Think about new avenues and ideas when looking through social media and the employment possibilities. Imagine working as a Big Data miner for a major brand, how cool would that be you hipster!