Big data is becoming an increasingly important component of the music industry as the digital world continues to grow in popularity with consumers. However, although companies have accessed data since the beginning of the digital era, determining how to extract and utilize the most valuable insights remains a largely untapped endeavor.
It’s relatively simple for companies to store massive catalogs of songs, but providing worthwhile music recommendations is a highly complex task. Currently, companies such as The Echo Nest and Gracenote are attempting to develop sophisticated methods for making sense of the plethora of listener data available through streaming platforms and social networks.
In recent times, many major players have acquired analytics companies in an effort to more effectively use data to understand what consumers want to hear in the various contexts of daily life. Apple acquired British startup Semetric, Spotify purchased The Echo Nest, and Pandora bought Next Big Sound, all with the goal to advance their abilities to track social and streaming activity and sort through the data to extract valuable information about the habits and tastes of music fans.
Many industry experts believe that the effective utilization of data holds the key to developing fundamentally new methods for delivering music to consumers, with the potential to create additional revenue streams through targeted advertising and highly personalized song recommendation services.
There’s no question that the use of big data in the music industry is gaining momentum and garnering an increasingly high level of attention from record labels, advertisers, streaming companies, and artists. As data analytics firms continue to be acquired, will major music players start developing their own similar services?
Although the creation of such tools is a massive undertaking requiring significant resources, possessing customizable metrics is very likely to become a key competitive advantage in the not-too-distant future. We are truly still at the beginning of unlocking the potential of using big data to create new revenue streams and advanced methods for providing music to consumers. While the end result of this trend in the industry remains unclear, the possibilities are seemingly endless, with innovators developing concepts that may one day revolutionize the manner in which music is delivered and consumed.
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