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How the music industry uses big data to create the next big hit

November 27, 2014 at 8:26 PM EDT
Is big data killing good music? As part of a collaboration between The Atlantic and PBS NewsHour, Judy Woodruff speaks with Derek Thompson, whose piece in this month’s magazine featured how data collected by Shazam and other music apps is not just predicting the next hit but influencing today’s music as well.

JUDY WOODRUFF: The digital revolution has rocked the music business for more than a decade, changing the way we buy, play and discover new music.

But it turns out digital technology is leaving an even deeper impression. Increasingly, the data that is created by all of this music streaming, buying and sharing is influencing the music that is being created.

It’s all the subject of an article in this month’s issue of “The Atlantic.”  And as part of the “NewsHour”‘s partnership with them, we took a closer look.

I traveled to New York City, which, as loud as ever, is still an important center of the music business.

Drummer Zach Danziger of the band Mister Barrington has played for some of the greatest names of pop, including U2 and Mariah Carey. He now finds, like many consumers, there is almost too much choice in music.

ZACH DANZIGER, Professional Drummer: The sheer mass of choices make it hard to actually sometimes dig in and get behind, like, a particular artist, because you’re, like, oh, I like that, but I want to hear these other 50.

JUDY WOODRUFF: Writer Derek Thompson spent the last six months researching the big data behind the music.

So the title of this piece you have written is “The Shazam Effect.”  What does that mean?

DEREK THOMPSON, The Atlantic: Shazam is this magical app that allows people to identify just about any song in the world, up to 30 million songs.

What you do, essentially, you hear a song in a bar, in a restaurant, or on your television, and you pick up your smartphone and you press a button, and within seconds, the phone has identified the piece of music.

JUDY WOODRUFF: More than 12 years old, this app is ancient in digital terms, predating the smartphone, streaming services and most of online social media. Shazam was somewhat of an accidental pioneer.

WOMAN: Shazam.

DEREK THOMPSON: So this tool that we use just to discover new music has become a tool that the music industry uses to shape the future pop music. And so that is the Shazam effect.

JUDY WOODRUFF: The company just celebrated its 15 billionth Shazam.

I met with its CEO, Rich Riley.

RICH RILEY, CEO, Shazam: If you were to go talk to a record label, they would say that standard internal procedure is to attach Shazam charts to your proposals, because we can really help them to help show when an artist is connecting with the audience.

JUDY WOODRUFF: You’re really in a position to predict what’s going to be a hit?

RICH RILEY: If it moves up the charts, it’s a really strong signal for them that they have got a hit.

DEREK THOMPSON: What they have been quietly building around the world is this seismograph of public opinion about music, because every single time that somebody in Brooklyn or Atlanta or Hyderabad, India, hears a song they want to know more about, they press the button and they say, “Shazam, tell me what this song is.”

RICH RILEY: It’s a very strong signal of love and of intent, and of, I want to know what that is.

DEREK THOMPSON: What that really tells the music industry that here are the songs that people are most interested in.

RICH RILEY: I’m zooming in to Shazam’s hyper-local charts. And so this is our data showing — it shows where we are, in Midtown Manhattan. When you click on the icon, there’s the Manhattan chart for right now.

JUDY WOODRUFF: In the process of all the Shazaming, it seems the music we once listened to is now listening to us.

And you’re saying consumers of music don’t really understand?

DEREK THOMPSON: They’re not thinking to themselves, this piece of information is going to fly up into the sky, into the cloud and the music industry is going to use it to determine the next big hit.

JUDY WOODRUFF: Alex White is doing just that at his company, Next Big Sound.

ALEX WHITE, CEO, Next Big Sound: We have built up this enormous data set to understand the trajectory that artists go through from complete obscurity to global superstardom.

JUDY WOODRUFF: The company develops algorithms which literally evaluate every online move fans take, a gold mine for talent scouts and artists themselves.

ALEX WHITE: Within each site, say Instagram, for instance, there’s eight different metrics that you can track, numbers of photos posted, comments, likes, hearts. So, you should pay more attention to this metric or this source because it’s a strong leading indicator of your sales.

ZACH DANZIGER: On our little scale, what we’re doing, a similar thing. We look at where people are buying what we’re doing. And it does inform us as to, you know, just what our next moves might be.

SILVIO PIETROLUONGO, Vice President of Charts & Data Development, Billboard: Never has there been more of a consumer influence in how our charts reflect popular music.

JUDY WOODRUFF: Silvio Pietroluongo is vice president of charts and data development for Billboard, the original top 40 specialists.

SILVIO PIETROLUONGO: We used to create our charts based on reports that were called in, but it was really just reported information from retailers and radio programmers as to what they claimed were their biggest songs and albums.

DEREK THOMPSON: The deejays, the record store owners had every reason to lie, it turned out, because the deejays were often being paid by the music industry to pitch newer and newer songs.

JUDY WOODRUFF: In 1991, the Billboard top 100 transitioned from call-in to point-of-sales data.

DEREK THOMPSON: Almost overnight, hip-hop and country just soared off the charts, and it became very clear that the hit men on the coast trying to predict the future of pop music were missing this urban music and the Southern — the Southern sound.

JUDY WOODRUFF: Another effect of the digital revolution is that an industry once based on turnover has now become more focused on the familiar.

DEREK THOMPSON: And it’s also made the quality of music, the chord progressions inside of music more derivative. And so the side effect of big data in the music industry has been, I think, to make the product more repetitious.

JUDY WOODRUFF: So how do you explain that, that people want to hear what they already know, rather than having any desire to explore something different?

DEREK THOMPSON: The evolutionary psychologists’ explanation for this is, if I recognize it, it hasn’t killed me yet. The vast majority of people, what they want from pop culture is comfort food. They want to be relaxed. They want to turn off their brains.

JUDY WOODRUFF: Some believe all this big data is creating pressure that undermines creativity.

Drummer Zach Danziger isn’t convinced it does.

ZACH DANZIGER: I don’t buy into the thing that now everything sounds the same, because I think, within any genre, it was always that thing of, I want somebody who sounds like that, get me the next Michael Jackson.

DEREK THOMPSON: The power of a number one hit has just exploded. The top 1 percent of artists now command 77 percent of all recorded revenue.

ALEX WHITE: It’s only in the last year or so that major labels have started hiring research guys, someone whose whole job is to identify promising new talent based on data.

RICH RILEY: What music can do uniquely is cut through the clutter.

JUDY WOODRUFF: Rich Riley is growing Shazam, moving the app into everything from movies to TV shows, even commercials.

RICH RILEY: We can share with them 100,000 people Shazamed your ad. And people love that music, and this is a chance for you to deepen that engagement with that consumer.

JUDY WOODRUFF: With their new customizable search tool find, Next Big Sound has come closer than ever to predicting the next big hit.

ZACH DANZIGER: It’s a credit score for your professional career. Right?

JUDY WOODRUFF: Like credit scores, the new ratings by big data music companies can be painful to hear.

ZACH DANZIGER: I don’t even want to hear those numbers.

JUDY WOODRUFF: Of course, Taylor Swift comes up in the “Epic” category, but even after 20 years playing with leading musicians, Zach Danziger still rates as “Undiscovered.”

ZACH DANZIGER: The numbers were always driving the record business, and that won’t change, but, hopefully, creative music-making will have an honesty to it despite all that. And I think we’re still in a very good place with that.

This report was produced by Sydney Trattner and Francois Bringer, with consulting producer Mark Carter.