Tag Archives: Pandora

Why AI Is the Future of Music

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The music industry finally has some reason to celebrate, thanks to artificial intelligence.

The Recording Industry Association of America (RIAA) recently announced that music revenues in 2016 grew 11.4 percent to $7.7 billion — the highest year-over-year growth rate since 1998. Although the industry is only half the size it was in 1999, double-digit growth is encouraging after years of either declines or flat results. Why the growth? According to the RIAA, the answer is simple: streaming is taking hold. And streaming services — especially Spotify — are lapping the field with AI.

As the RIAA noted, the biggest contributor to growth was a doubling of revenues from paid streaming services such as Apple Music, Spotify, and Pandora. In fact, for the first time ever, streaming music platforms generated the majority of the U.S. music industry’s revenues.

Younger streaming platforms such as Tidal are still too new to contribute significantly to the $3.9 billion that streaming services generated in 2016. Rather, the established streaming leaders, especially Spotify, are hitting their strides by offering better products fueled by AI.

Pandora and the Power of Personalization

Streaming services such as Pandora and Spotify have always created customers by personalizing their vast inventories of music. If you stream music, you already know how well Pandora and Spotify create engagement by offering you customized listening choices based on your personal tastes. I still remember how exciting it was when I first started using Pandora years ago and created my own Pandora radio stations based on names of artists or songs that appealed to me. If I wanted to create a station based on my love of Massive Attack, I could do so. If I wanted to create a station of music inspired by the Cure song “All Cats Are Grey,” I could do so. And Pandora refined my stations even further when I gave a thumbs up or thumbs down to songs that Pandora suggested to me based on my listening tastes.

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6 Predictions for Music Streaming

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StreamingMusic

Forget Taylor Swift’s futile Spotify boycott. The real news emerging from the music industry this week was the launch of YouTube’s streaming service. The new service consists of YouTube with streaming functionality (as opposed to being a new product with a different name, thus benefitting from YouTube’s brand reach). On November 17, YouTube is also launching (in beta form) YouTube Music Key, a paid streaming option offering ad-free online and offline listening for $9.99. YouTube now enters an increasingly crowded streaming industry that ranges from all-purpose services such as Pandora and Spotify to specialty offerings such as Muzooka (which matches emerging artists with both fans and members of the music industry). And YouTube, owned by the world’s most valuable brand, has more power to disrupt the game than anyone. In the aftermath of YouTube’s entry to the streaming field, I predict six possible directions for the streaming business:

1. We will see a shakeout among major streaming platforms. The survivors, faced with fewer competitors, will call the shots on artist compensation even more so than they do today.

2. We may see the emergence of a few more specialty streaming services, such as Muzooka, to act as the intriguing alternatives to big players. For instance, we could see an alternative boutique streaming service by an artist consortia (involving someone like Jay Z, whose brand transcends music). We also may see the launch of private-label services from music-savvy brands such as Pepsi. A house service by an American Express, offered exclusively to its customers, could act as an effective music discovery platform as well as a customer acquisition and retention tool. (Moreover, in a combination of the artist-owned and corporate private label approaches, we could see a a corporate service launched in association with a star like Jay Z acting as investor, brand partner, curator, or any combination of those roles.)

3. The conversation about fair artist compensation that Taylor Swift reignited with her Spotify boycott will subside without effecting any change in artist compensation, just as the debate eventually petered out after Thom Yorke and the Black Keys boycotted Spotify. Another artist may make the topic trend again with a well-publicized boycott, but the conversation will remain contained to pundits who won’t move the needle.

4. The have-not artists — the vast majority of artists who are not superstars — will keep their content on streaming services and continue to be compensated as they are now. Why? Because they lack the choices that Taylor Swift has.

5. Savvy artists will learn how to use streaming as a promotional platform together with other digital platforms. They will rely on their recorded content to support touring, merchandising, song licensing revenue, and co-brands with businesses.

6. Finally, and most importantly: fans will continue to stream music, legally or illegally (as they are doing with Taylor Swift’s new album, 1989). When it comes to music streaming, fans are loyal to songs, not artists. Fans don’t care about boycotts. And fans are no longer willing to risk money on an entire album’s worth of songs from artists they do not know. Fans don’t necessarily take time to write Wall Street Journal editorials about fair compensation or blog posts about the future of streaming. Fans simply shape the future of music with their listening and buying habits. Album sales continue to slide, and Apple’s iTunes business is slumping. As Adele’s manager, Jonathan Dickins, says, “Streaming is the future.” Why? Because fans make it so.

Oh, and here’s one more related prediction you can take to the bank: Taylor Swift will continue to build her empire from touring, brand deals, and merchandising sales. Any revenue lost from boycotting Spotify will have little impact on her success. The release of the album 1989 in 2014 is all about priming the pump for the 1989 World Tour, which kicks off in May 2015 — which is where the real money is going to be made. (Her Red tour, which concluded in 2014, grossed $150 million.) Taylor Swift’s approach to building her career — writing her own songs, creating music that crosses genres, building a fan base through touring, and honoring her fans in person and on social media — is the blueprint for aspiring artists to emulate. And artists will need to include streaming in the process.

What are your predictions?

Why Amazon and Netflix don’t always know best

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It’s far too easy to allow ourselves to be led around by the nose.

Amazon tells us what to buy. Netflix and Pandora suggest movies and music based on our tastes. Facebook and Google+ suggest friends to us. Twitter tells us whom to follow.

But those tools reinforce what we know already. They broaden our horizons only incrementally.

To make a creative and intellectual breakthrough that forces you to grow, I believe it’s important to find moments of serendipity – when you stumble on new ideas that seemingly lack any immediate application to your life. You won’t find those moments by allowing others to curate your life for you.

Here are a few examples of how I’ve tried to spark moments of serendipity:

1. Getting immersed in a different setting

For most of my life, I was not interested in medieval history. So I had low expectations when I joined my family on my first visit to the Bristol Renaissance Faire a few years ago. The faire re-creates the town of Bristol, England, in the year 1574, complete with period costumes, jugglers, minstrel entertainers, and a visit from the Queen of England. And as I’ve mentioned on my blog, the faire enchanted me on my first visit.

It’s not just the passion and spirit of the fairgoers that attracts me – it’s those moments of personal serendipity that occur on so many visits. Recently, by complete chance, I discovered a band known as the New Minstrel Revue, who opened my mind to the gentle and beautiful sounds of Celtic folk.

One of my favorite things to do at the faire is to walk into the Compass Rose music shop and buy whatever the store is playing at the time. It’s a total hit-and-miss proposition that has introduced me to new music I might not have heard otherwise – such as Sacred and Secular music from Renaissance Germany (a selection that I doubt Pandora would have suggested based on my musical interests).

This year I happened to be walking through the dusty Bristol streets and heard a strange, beautiful drone-like guitar sound. By simply following the siren call of the music, I discovered the Darbuki Kings playing bouzouki and drums with a belly dancer. Even better, Antone Darbuki took the time to show me how he strums an exotic sound with an open G tuning on his bouzouki strings.

I had heard of the bouzouki — but I had no appreciation for what a bouzouki could do until this chance encounter at Bristol.

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