NARM Embraces Big Data -- Will Big Data Reciprocate?
-- Big Data invaded the NARM conference on Tuesday afternoon. Terms like "KPI" (key performance indicators) and "regression analysis" popped up in a setting more used to discussions of SoundScan sales numbers. The music industry at large is certainly interested in harnessing big data to work smarter. But is it ready for big data?
Data has changed drastically in recent years. It's not just about CD sales and radio listening. NPD Group now tracks consumer purchases of concert tickets, artist merchandise, sponsored products, listens to music collections and Internet radio, and social media activity. As NPD's Russ Crupnick showed, the company even knows how Neil Young fans tend to experience music (they listen to music they purchased and aren't too likely to get the music on file-sharing services) and what products they tend to buy. Nielsen tracks a wide variety of consumer purchases and media consumption. Newer companies like Radian6 and Wiredset specialize in tracking social media data.
There's a ton of data out there, but watch out for data colored by narrow experiences, warned Ethan Kaplan, founder of Live Nation Labs and VP of product at LiveNation.com. Data can be colored by the experience that generated it, such as Facebook likes or purchases of music files wrapped in digital rights management. In other words, a miserable user experience may not be captured in data. If options and choice weren't created, the data will say only that some consumers purchased a certain format or adopted a certain technology. Kaplan says Live Nation Labs prefers ratio-based metrics like daily average users versus monthly active users, average revenue per user and cohorts (groups of same users over time).
Growing pains will be inevitable as the industry struggles to absorb and analyze data. Working with data will require new skill sets within organizations -- either by training, new hires or just the passage of time. Employees of record labels, music publishers, promoters, agents and artist management companies will need to be strong in mathematics and should be comfortable with basic statistical analysis. Having the right people working with data is the difference between running the right and wrong reports and drawing the right and wrong conclusions.
Having the right partners is vital to putting big data to good use. Next Big Sound, for example, worked with Sony Music to build useful data tools that improved reporting processes, reduced redundancies across business units and improved formatting inconsistencies. Next Big Sound's Colin Willis said the music business is in the early phase of the process and is not yet turning data and information into knowledge and intelligence. "It's really about having the right tools around data," Willis said.
Did Legal Issues Impact LimeWire Usage?
-- Did legal injunctions against LimeWire have any impact on consumer behavior? Nielsen Entertainment senior VP of analytics and client relations David Bakula gave a presentation at NARM on a Nielsen research project that tackled the question. To find out what happened when record labels' lawsuit against LimeWire got a court injunction and tremendous media coverage, Nielsen used its metered panel that tracks all computer usage for 100,000 Internet users and also tapped into the BitTorrent data of London-based company MusicMetric.
Nielsen saw use of LimeWire drop sharply starting in October 2010 -- the same time a court issued an injunction -- even though consumers still had a working application. Half of LimeWire users seemed to stop sharing music files after the injunction, Bakula said. Of the 13 million LimeWire users, 9.7 million stopped using LimeWire and 51% of them stopped using file sharing services altogether.
Those who continued file sharing in 2011 were much heavier music users: 4.5 hours per month on legitimate sites and two hours a month on file sharing (versus two hours and less than one hour per month, respectively, for former LimeWire users). These continuing file shares were responsible for most download volume: about 20% of users represent 60% of download volume, according to MusicMetric data.
Pandora Surpasses 150 Million Users, Listener Hours Up
-- Pandora has surpassed 150 million registered users who are increasingly using the service from mobile devices, CEO Joe Kennedy revealed Tuesday at the CTIA Wireless 2012 conference. More than 100 million of Pandora's 150 million registered users have accessed the service from a smartphone or tablet, Kennedy said.
Listener hours were up to 1.06 billion in April, the company announced separately. That represents an 87% increase from the 566 million listener hours in April 2011. Active listeners -- the number of unique listeners who initiated a stream in the previous 30 days -- rose to 51.9 million from 51 million in March and 34 million in April 2011.
Pandora is focused on growth and makes efforts to signal this strategy to the public. It releases listening metrics every month and gives frequent updates when it surpasses major milestones such as the 150-million registered user mark announced Tuesday.
But the company also wants the public to be apprised of its efforts to improve mobile monetization. Kennedy added some numbers regarding Pandora's ability to monetize mobile listening. More than 70% of listening hours take place on a mobile or other connected device (in this and most cases, "connected" does not mean a personal computer), a number that hasn't changed much recently. Pandora's mobile revenue grew to $100 million in fiscal 2012 (the year ended Jan. 31) from $25 million in fiscal 2011.
Be Wary Of Using Apps to Recreate Albums
-- There may be an analogy here for the music industry and album format in this article by Technology Review editor in chief/publisher Jason Pontin about why the Web, and not apps, is the future. Technology Review built an iPad app and expected a modest number of subscribers. It got just 365 subscriptions.
"What went wrong?" Pontin asks. "Everything." Apple took 30% of in-app subscription revenue. The ease of subscribing within an app trailed far behind the experience on iTunes. Adapting print publications to apps wasn't easy. And most importantly, stories in apps lack the connectedness to the rest of the Web people expect from hyperlink-filled digital stories. In other words, the walled gardens of apps became "stifling gardens."
"Last fall, we moved all the editorial in our apps, including the magazine, into a simple RSS feed in a river of news. We dumped the digital replica. Now we're redesigning Technologyreview.com, which we made entirely free for use, and we'll follow the Financial Times in using HTML5 [the Financial Times killed its app on May 1], so that a reader will see Web pages optimized for any device, whether a desktop or laptop computer, a tablet, or a smart phone. Then we'll kill our apps, too."
This story is about apps created by print media companies, but there could be a lesson for music companies: Be wary of using apps to recreate the album experience. If some customers don't want an album, don't try to give them an album in a different wrapper. Instead, offer them products that take advantage of the linked and social nature of the Web.
( "Why Publishers Don't Like Apps" at Technology Review)