Ever wonder why you hear the same songs over and over again on the radio? Or why people would pay for access to music rather than buying it?
Sure, technology and the choices it offers are part of the answer. But there’s a bigger problem: the music industry has a painfully narrow understanding of how people actually engage with their content. The audience is still listening, but are the major labels and radio stations listening back?
While listeners benefit from incredible personalization with digital music services like Slacker, the industry also stands to gain from unprecedented insight into the behavior of tens of millions of music fans. And until the traditional music business gets a deeper understanding of how people actually consume music, they will continue to struggle with an increasingly digital world where access trumps ownership.
The challenge is that the industry is still using analog thinking in a digital marketplace.
Back in the '90s, when walkmen and CDs reigned, the industry combined basic sales data from the Billboard charts with two primary methods of song research: "Call Outs", where stations played song hooks over the phone and record their responses; and "Auditorium" research, where a group of people react to song hooks as they are played live. In a pre-Internet age, it was about the best you could do.
And now, in 2013, an age of social networks, Big Data and smartphones, surely terrestrial radio has developed a more nuanced methodology to find out what songs people really want to hear, right?
Not so much. Consider Portable PeopleMeters. This device is clipped to an individual's clothing and listens for inaudible signals that radio embeds into their broadcasts. The Portable People Meter "hears" this signal and records the station and the time spent listening. Seems like a nice measure of real behavior, and real song appeal, right?
It’s a classic "small data" solution. Choose a representative sample and extrapolate the results out to the broader population. But what is it really telling us? What people are exposed to… not necessarily what they like, or are choosing to listen to. For example, imagine a cold-weather spell where people are cozied up in coffee shops. Expect a spike in singer-songwriter fare. It doesn’t take much to dirty the data.
The result is a repetitive blend of vanilla pop that the coveted 18-34-year-old demographic is fleeing in droves, for highly customized digital listening experiences.
And as streaming music services continue to gain momentum, sales data is an increasingly smaller piece of the puzzle, making engagement the only real metric that matters.
The number of times a song is streamed is a good baseline. It tells you that someone listened to your song. But what about how many times it was skipped halfway through? Do listeners change the channel every time a certain song plays? How frequently is a song "banned" from playing again, or "hearted" to assure someone hears it in the mix more often? Or how often is the song shared with friends?
You’re not going to get this kind of insight from a focus group or a few thousand listeners wearing PPMs. This is Big Data. Services like Slacker capture billions of data points from hundreds of millions of tuning hours across tens of millions of consumers. In real-time; 24 hours a day, 7 days a week.
Now imagine being able to layer this data on top of a label’s marketing efforts. Could you have predicted the breakout success of Mumford & Sons by looking at user data in the months leading up to their new album release? Did the Alabama Shakes appearance on Saturday Night Live change the way people listened to the band the next day? Did Justin Bieber’s recent flurry of bizarre public behavior impact how consumers engaged with his music?
It’s no longer about consumers just speaking with their wallets and car radio buttons. Consumers are telling us more than ever before about their tastes, preferences and response to our marketing efforts, with their actions.
The music industry used to be a one-way conversation. The tastemakers who ran the labels told the world what was cool, terrestrial radio picked from a small list of label-approved candidates, the band showed up to play, and the audience was there to listen. But as the paradigm shifts to anytime, anywhere access, it’s time for the industry to turn the mic around and listen to what millions of deeply engaged digital users are already telling us.
—Jack Isquith is the senior vice president of strategic development and content programming at Slacker. He is a veteran of both the digital and traditional music industries, having served in leadership positions at AOL, Warner Bros Records and CDNOW.