How Big Data is Changing the Music Game

When digital downloads became popular and listeners began buying (and sometimes pirating) MP3 files, CD sales plummeted. Eventually, digital downloads started declining as people discovered music-streaming platforms like Pandora, Spotify and, more recently, Apple Music. Now, with Pandora’s recent acquisition of Ticketfly, streaming is expected to evolve to include live music. And that’s where the money is — if Pandora can manage the big data.

When streaming was introduced, the music industry took a serious hit. Even with advertising revenue included, more than 200 streams of a song were required to generate the same income as a single download. Streaming platforms gave artists a new opportunity to be heard, and they gave listeners the reins. Fans now drive changes in the music business, but following its acquisition of Ticketfly, Pandora will guide those changes as it directs listeners to live events.

You’re likely more familiar with Ticketmaster than Ticketfly. That’s understandable, considering Ticketmaster has a near monopoly on the ticket sales industry, with about 80 percent market share. Traditionally, Ticketmaster has used purchased data and associated demographic data to target its clients. This approach is anything but finely tuned, which is why you might get an email about a rap concert at Mercy Lounge even though you’re a country fan. Did you recently see a country artist at Mercy Lounge — or anywhere else in Nashville? If so, Ticketmaster has you tagged as an event-goer in Nashville. You may get offers for a Titans game, too, whether you’re a fan or not. This shotgun approach can be effective for venues that don’t have a targeted client base, but it makes little difference to established venues.

Pandora, on the other hand, leverages its 10-year cache of over 250 million users’ listening activities to personalize playlists. In addition to the demographics that subscribers enter upon registration, Pandora tracks when a listener has given a thumbs up or thumbs down to a particular song, when a song was skipped and what type of music a listener prefers at what time of day. Combine this with Ticketfly’s fan data, and we may be looking at another big change in the way people access and purchase music — and the way to which they are marketed.

Selling concert tickets to fans based on their listening habits isn’t new for Ticketfly. In 2013, they launched the first fan analytics suite for live events called Ticketfly Fanbase. It identified listener loyalty and used data mining to grow and monetize fan bases. The goal was to sell the 40 percent of live event tickets that typically go unsold. This partnership with Pandora now gives Ticketfly access to advertising inventory and a larger, more specified audience.

Unlike Ticketmaster, which aims to own data, Pandora and Ticketfly operations will be driven by data sharing. They’ll not only suggest artists similar to the ones you already like, but will also notify you about upcoming concerts of artists they know you like. With this acquisition, Pandora is moving into the most lucrative segment of the music industry — live performances. Ticket prices keep rising, and fans keep buying. As long as Pandora continues to optimize its data, it’ll be infusing cash into Ticketmaster’s only real competitor.

What does it mean for you? No more jealousy when you see pictures of a concert on Instagram that you didn’t even know was happening. Listeners will be more aware of who’s in town, which concerts they’re likely to enjoy and what venues they may want to check out. Not a music fan? It matters to you, too. Online shoppers might notice banners from their favorite stores on Facebook, airlines always seem to know when you’re planning a trip, and rental agencies can suggest the car you want down to the color. When companies use big data smartly, it can benefit users in a big way.

This post also appeared in The Tennessean, where Concept Technology has a bi-weekly feature in the Business section.