Big data has gone from being associated with industries like healthcare, IT and security, and tech as standard use cases to influencing the world of entertainment. Its impact is proving a dramatic shift is in order for the entertainment industry as a whole.
If you want to build a business in the music industry, in particular, then you better get on the big data bandwagon.
Record labels have begun a significant pivot by betting on artists that have proven themselves in the public domain. This is why having a SoundCloud or YouTube following has become such a prominent metric. Labels can offset their risk by offering deals to artists that have already gained traction--whether it be through a viral video or a buzzing record on Spotify.
But basing an artist or song acquisition strategy purely on Internet perception is a far cry from using in-depth analytics to fuel intelligent business decisions. This is where other companies like Snafu Records are leveraging the same "big data mindset" that has already been adopted by other industries, spotting trends far in advance.
"The music business is constantly getting more and more data driven," says Ankit Desai, founder of Snafu Records. "And the growth of streaming services such as Spotify and Apple Music has really accelerated that change. Most executives now understand the value in analyzing user behavior and adapting strategies based on those metrics."
According to Billboard, Atlantic Records was making decisions on which artists to sign based on consumer research by the early 1990s, with Hootie & The Blowfish being one of those data-driven picks. Desai, who spent 3.5 years leading analytics at Universal Sweden, had been applying this same strategy except with industry technology, to survey the popularity of singer-songwriter Tove Lo. Based on the performance of one of her songs, they used data to purposefully market her to EDM fans and promote tracks that were more in line with previous ones that had performed well in that niche. The strategy worked well, considering her collaboration with Alesso on "Heroes (We Could Be)" went on to reach Number 5 in Sweden.
"Around 70% of music consumption in the world today is owned between three major companies," says Desai. "By our estimations, these three major companies also account for less than 1% of all new music that comes out every year, which means there is a massive gap between the music that is consumed and the music that's being created. There are a lot of artists all over the world producing incredible music, but no one seems to have the tools to search deep enough on a global scale."
What Snafu Records is aiming to do is provide a platform that scrapes the Internet for undervalued music by looking at performance analytics such as fan sentiment, musical similarity to other hits, and machine-learning driven prediction models.
Once a song is flagged as an early riser, Snafu Records seeks to buy the rights to the song and then market it further after purchasing the rights, betting that the cost of acquiring the rights will be less than the net gain of that song's performance over time.
Desai believes that more and more labels will trend in this direction, using analytics to make decisions--both before signing a new artist, and throughout an artist's career.
Big data is going to start spotting trends far before people will, which makes it an important component for anyone looking to break into the entertainment/music industry.