Jimmy Iovine has always been in tune with artists, working in perfect harmony early in his career as a recording engineer with the likes of John Lennon and Bruce Springsteen.
Last week, Iovine tapped into something today's musicians care deeply about--more data on who exactly is listening to their music. Iovine, who is co-founder of Beats Electronics and chairman of Interscope Geffen A&M, said that the digital music service that Beats plans to release this summer will share listener data with artists it streams.
"I think that's fair play," Iovine said at the AllThingsD Dive Into Media conference in Dana Point, Calif. "I would die to know who bought my records on iTunes, but I don't."
Iovine's promise to share more data with artists is one way Beats plans to differentiate itself in the crowded market for music streaming services. Artists like Zoe Keating and David Lowery of Camper Van Beethoven have been steadily beating the drum in recent months for this type of information.
"My music is available everywhere but I can't get that data," Keating said in November at the Billboard FutureSound Conference in San Francisco. "How do I reach those...listeners? That's more valuable to me than some royalty."
Not surprisingly, data sharing is fraught with complexity, and the rallying cry of "data transparency" is sexier than the day-to-day reality. To start, let's break this down into two types of data: customer data, or who exactly is listening, and payment data--how the royalties are calculated.
Who Is Listening? Music services are bound by privacy laws that prevent them from handing over customer information. As a result, many services report either aggregated summaries, or individual data that is stripped of the user's name, address or any identifying information. Spotify, for example, supplies rights holders with data each month for every stream, specifying each listener's location and when they heard each track--but as anonymous data. Pandora also shares with artists on an ad hoc basis the number of people listening to their music, their audience's age, gender and geography, and which songs are doing well. Again, the data is anonymous so as not to violate privacy laws.
Iovine didn't say how Beats plans to get around privacy restrictions, and a company representative declined to go into detail. But one route is to persuade fans to voluntarily share their names and contact information. This is something that new Beats Music chief executive Ian Rogers successfully did in his prior role as CEO of Topspin, a marketing company that helps bands connect directly with fans in order to sell tickets and merchandise.
How Royalties Are Calculated. Music services send terabytes of data to whoever holds the legal rights to the songs they stream. In order to calculate the per-stream payment figure, however, one needs to know the terms of each artist's contracts with their labels and publishers. Streaming companies aren't privy to those privately negotiated contracts, so they can't report payment information directly to artists.
In addition, the per-stream amount that music services pay out constantly changes, because the figures are often based on a percentage of revenue and overall streams, which fluctuates from month to month.
Can Beats deliver 100% transparency on how its royalties are calculated? "It's a very noble aspiration," says Mark Mulligan, a music analyst with Midia Consulting. "But it's a huge, complex mess. It's great that Beats wants to do something different. But there will be a very firm limit to how much they can do."