The UK’s music venues were lit up in red last week (#LightItInRed) to warn of the existential threat to them from coronavirus. In the seaside city of Brighton and Hove that meant a lot of buildings flashing ‘Danger’. Some have launched crowdfunding campaigns just to stay afloat.
Home to legends such as Nick Cave, David Gilmour, Adele, and Fatboy Slim – plus the likes of Royal Blood, Bat for Lashes, Bonobo, and thousands of young hopefuls at music colleges – the city’s stages and dance floors have been dark since March, while festivals like The Great Escape, Brighton Fringe, and Pride have all been cancelled.
But what has this got to do with technology and how can data help? That was a theme of the Brighton Music Conference (BMC20), one of the UK’s biggest industry jamborees, forced online this year like every other live act. It’s an important one because music was arguably the first business to be torn apart online in the full gaze of the public, first by illegal downloads and then by Apple, Amazon, Spotify, Facebook, Pandora, YouTube, TikTok, and the rest.
The good news is that musicians now have global platforms on which to build audiences and distribute their work. The bad news is that the network effect has forced down the money that most can make to a fraction of a cent per stream – and that’s if they own the rights (many don’t). This is why lockdown 2020 has been such a disaster for musicians who rely on live shows, merchandise, and sync fees for a sustainable income, just as it has for the industry as a whole.
But there is another, longer-standing problem than COVID-19: while music might have been one of the first sectors to be disrupted by outside digital forces, it has been much slower than others in becoming a properly data-focused business to maximise its revenues and identify new opportunities.
How we got here
In the 1990s, naive commentators claimed that the internet and mobility would ‘dis-intermediate’ music, but the reality is that the digital realm has done the exact opposite. Digitisation has stuffed the channel between artist and listener with thousands of middle-men and advertising behemoths from outside the industry. Most of them cream off revenues long before they reach songwriters and performers. (When Spotify’s billionaire CEO Daniel Ek said recently that he would be investing $1.2 billion in startups, he should have given that money to the musicians who made him wealthy.)
So how did we get here? The sad fact is that some of the people who run major labels are still more comfortable in a world of camel coats, cigars, box-shifting, broadcast, intellectual property, and larceny than they are in a universe of bits, social networks, AI, and data analysis. The digital middle-men like Ek – just 37 – see the opportunities far more clearly.
Music companies of every kind ought now to be data companies as well as talent scouts, given that data about exactly who listens to what music, where, and why, could be providing a much deeper, more global look at artists’ audiences than the old way of doing it: shining a spotlight on the crowd.
This in turn could benefit many acts – though there are risks in music becoming afflicted by the kind of SEO-led, machine-readable approach to content that has turned much of the publishing industry into surface noise and clickbait.
Sam Taylor is Commercial Manager of CMU (Complete Music Update), a data-led business that helps people understand the music business through media, training, and research. He says:
Music companies and everybody in the music business need to understand data. Where perhaps in the past sales reports were a few hundred lines in Excel, now musicians, labels, and other rights owners are dealing with millions, if not billions, of lines of data. Really music companies are now data companies.
We need to look at how music data can drive discovery, innovation, and revenue across the value chain – in particular the diverse data sources that are available now, the types of questions we should be asking our data, and how doing this can help you compete in the new music data economy.
Charlotte Caleb is Senior Manager in the Rights Management wing of Kobalt Music, one of the world’s largest digital music companies, representing over 20,000 artists. Its portfolio includes digital music publishing platform AWAL and rights management system AMRA. She says:
Every music company should be using data within their own ranks. Even if you're an independent manager on your own, you should be looking at data, how you're spending your time, what you're spending your time on, what’s getting you the most revenue, what's the most productive, and where can you outsource certain things.
The amount of data available out there is frightening. My own starting point a while ago was YouTube and the levels of data that are available there that are completely unused by the music industry. We go from looking at data not just in terms of consumption of music directly, via streaming, but also UGC [user-generated content], because that's a massive pool of growth and it's very organic.
“It's monitoring that. Exploring the cost versus the benefit all the time is also very important. Spotify and mood-based playlists are indicative that music is not genre-based anymore, it's much more about a vibe. [...] It's not traditional marketing, it's a bit more surreptitious.
Twitch [owned by Amazon] is definitely something to watch, because that’s not a music platform, it’s a gaming platform. What's happening with Amazon at the moment is their music is starting to be licensed there. That's going to be a really interesting trend to follow, because it's gaming led. But it's still a completely viable revenue source and a way to target an audience.
The data challenge
But becoming more data focused isn’t so easy. In Taylor’s view, data overload is a growing problem for an industry that sprung from analog roots. He says:
A lot of people [in the industry] don't understand data, and they don't know how to use the data that they're getting to make intelligent decisions. And if you don't understand the data, you also don't know whether you can trust it or not.
For Caleb, metadata is one of the biggest challenges – especially for people who still see data as being rooted in science and mathematics rather than people. That’s unfortunate when the core concepts that the industry runs on are increasingly couched in data formats, such as ISRC (International Standard Recording Code), the unique identifier embedded in each recorded work that ensures the rights holders get paid. She explains:
Every ISRC and UPC [barcode] combination relates to a different instance of a track. So, for example, Universal might have a track on one product, but then another distro has it on a different one. If the metadata isn't accurate, the instances of usage of those tracks become useless, because you don't know where it's coming from or why. [This means rights holders don’t get paid].
Platforms like TikTok have music as a big part of what they do, but they weren't based on music, they weren't built with any understanding of a music company’s metadata. It’s really difficult with them and with different instances of tracks to decipher accurate data.
In short, the digital middle-men are again monetising content, including UGC, but composers and other rights holders may never see a cent from their IP, except by association with user-generated viral content. But that’s assuming consumers even know who the artist or composer is, of course, and that the music has been properly sourced.
Music distribution itself is increasingly a commodity offering, but a lack of data portability sometimes gets in the way of artists benefiting from a deeper level of service. Taylor shares a story from his days at digital distributor Tunecore of the problems that can arise when artists want to change platforms in search of a better deal:
There was an occasion where someone who had been in a successful band 15 or 20 years ago said the rights [in the music] were about to revert to the band [from the record company] and they were in a deal with one of the big full-service distributors.
He said, ‘I've done the math, and it makes more sense for me now to put my catalogue in Tunecore, pay an annual fee, and get 100% of everything than to give up 30% to this distributor.’ So I said, ‘Great, let's get it sorted. Send over your WAV files, the metadata, and the album artwork.’ And he said, ‘Oh, I thought you could just suck that down from the distributor’. Well, he ended up signing the same deal he already had for another year, giving up 30% of a catalogue that was turning over about $150,000 a year, just because he didn't hold the data he needed to migrate his own material.”
A lot of music companies are sucking in huge amounts of data and realising it's of no use to anybody unless they can present it in a way that makes it accessible. The most familiar example of that is probably Spotify for Artists [...] which has this dashboard where you can make sense of that data and ask questions of it. Like which cities are people listening to my music in? What age groups are listening to my music?
I approached a few people to speak on [this conference] panel and they said, ‘Well I wouldn't have anything to say about this, because I don't work with data.’ And I said, ‘Well, that surprises me, as you’re doing this job.
The past quarter century has seen the real power in the music industry pass from a handful of majors who saw musicians as cash cows to tech and advertising giants who barely know that artists exist.
A number of specialist players understand the data economy much better, and some are trying to give musicians greater control and ownership over their own material. But the legacy of the industry’s past mistakes runs deep. In many cases, rights remain with labels, not with musicians or composers, and this makes it difficult to unpick the system.
In the meantime, pity the poor artist with a global platform, but zero income from it: the inevitable result of consumers being encouraged never to pay for content while allowing advertisers into every second of their lives.
And if you love music, then make an effort to support the artists you like with cash. If you don’t, nobody else will.