The music industry has been hurting badly for years, but a turnaround may be coming with a little help from big-data.
Weve all heard about the losses faced by the music industry in recent years with reports of total revenue falling from nearly $15 billion in 1999 to slightly more than $6 billion in 2009. And although Apple last month announced that weve now collectively downloaded more than 25 billion songs on iTunes alone, sales of digital downloads havent offset the industry losses. I believe big-data will play an enormous role in turning things around -- sooner rather than later.
I'm not along in my thinking, either, as evidenced by the number of companies now specializing in music analytics. Some of the most popular are Band Metrics, RockDex, Next Big Sound, GigsWiz, and Musicmetric, according to HypeBot.com, a music business site. Musicmetric, for example, says on its website that it serves thousands of people in the industry, tracking and indexing data for 600,000 artists and more than 10,000 million individual releases using data from a variety of websites including social networks.
The big-data potential in music is enormous, in large part because of all the data generated by the people who are buying, downloading, and communicating about music online. Information aggregators can sort through the disparate pieces of data and clarify what people like and want; analytics tools and platforms can track how artists perform on fan pages and social media sites; and web crawling, data mining, and digital processing reveal what fans are saying across blogs, social networks, and other sites to assess their digital pulse and connect that to sales.
A new study, "What Social Media Has to Do With Record Sales," shows an exciting correlation between online activity and sales. This has enormous potential for producing more bang for the buck in such areas as merchandising and concert-ticket sales, which are taking on increased significance in the wake of so much change. Interestingly, between 1999 and 2009, ticket sales for live-music events tripled from $1.5 billion to $4.6 billion, according to industry reports.
As we move forward, I expect to see fewer labels, digital sales continuing to dominate, and piracy to remain an irritant. And with inexpensive music-streaming services like Spotify, which claims to have 20 million users and five million paying subscribers, the line between owning and listening to music will continue to blur. I also expect to see a growing number of tools to help analyze data faster and better, in such areas as predictive analytics and data conversion.
How do you see the music industry shaping up, and what role do you see data analytics playing in the music business in the years to come?