Sweet and Lowedown

Will Apple’s Tastemaker Test Win The Streaming Music Challenge?

Apple made big news last week by hiring one of the music’s best tastemakers, Zane Lowe, the preeminent DJ on BBC Radio 1 who has introduced the world to artists like Arctic Monkeys, Gnarls Barkley, Adele and Sam Smith.

With Zane’s hiring and the reported tapping of other music journalism talents, Apple is betting big on the ‘human curation’ chestnut that Jimmy Iovine used to sell the service to music fans, and more importantly, to Apple last spring.

Curation is believed to be a solution for streaming music’s problem of what to play next. All-you-can-eat music services like Spotify and Beats provide access to tens of millions of songs, but listeners consistently run into the issue of figuring out what they want to hear next. So by creating recommendations, radio stations and playlists that the music fan might like, curation helps alleviate the problem.

Except it isn’t that easy.

Why? First, is there’s a lot of music. Millions and millions of songs are available on these services and figuring out everything about the music is rather difficult. And then there’s the user expectation. A broadcast radio tastemaker like Zane is pretty adept at talking to a lot of people at once, but streaming the music customer expects—if not demands—a unique music experience based on their taste and listening habits.

The Beats Formula

Curation solutions have come in two flavors. Companies either use automated technology solutions, like Pandora’s ‘music genome’ and the Echo Nest’s taste profile. Or you hire a staff of music experts to pick music.

Beats’ Co-CEO Jimmy Iovine and Chief Creative Officer Trent Reznor rightfully pointed out that most services have the soul of a hard drive and that music fans craved more in a music experience.

Beats preferred playlists selected by humans, experts on music who understood what the listener needed music for, like cooking dinner, exercising or studying. The startup went on a spending spree, hiring a team of music programmers to build playlists and pick the perfect song. While others, like Rhapsody and Emusic, had staffs of curation experts long before Beats, Jimmy was the first to make human curation the main selling point.

When it launched, Beats had subscribers  select their favorite style of music. Afterwards, the service would feature playlists built by their staff of music experts who hailed from the radio industry and music blogs. Beats playlists were indeed compelling but the depth of the lists appeared to be light and the curation stale. After all, how many times can you listen to the same 15 tracks on the Indie Breakup or 2006 Hip Hop Gems playlist? Fact is hand curation requires a lot of hands to consistently churn out new lists, something the service didn’t quite get right.

Emotional Math

Beats management objected to algorithms that automatically choose the next song based on a set of rules. “The promise of algorithms that we’ve all bought into over the past few years, that you enter a band and you are going to hear a ton of music that’s all based on that seed,” Trent Reznor told USA Today last year. “I think we’ve all realized the reality of that is that it’s a shallow puddle, it immediately kind of sounds good and then you realize the limitations and you start to hear the machine in there.”

“(With an algorithm) you are using math to solve an emotional problem,” is the way Jimmy Iovine put it. He is partially correct. When the catalog is tens of millions of songs and you have millions of customers, picking what song comes next can only be tackled by math.

It’s impossible for a service to function without any algorithms. There’s just too much data and you need to rely on something with automated rules to do some of the heavy lifting. Even Beats, despite its marketing message of ‘the music service with music experts’ had several different algorithms that were used in the service or under development.

So marketing pitch or not, everyone (in one way or another) must use math to solve these problems. The success or failure of algorithms and curation depends on how companies employ the products and who’s in charge.

It’s far from me to tell Apple what to do, but hey, that’s never stopped me from dispensing advice of questionable value. Here are my guiding principles for building curation and algorithms in streaming services.

  1. The Right Tool for the Right Job

As much as I have a problem with Pandora and their marketing of the ‘music genome,’ the company sure went about solving the right problem with their algorithm. Simply put, Pandora is designed to serve up around 40 solid minutes of songs for the person who likes to listen to music. It doesn’t do more than that and that’s a good thing.

Technology products get unwieldy because they are designed like a Swiss Army Knife. My general rule is that technology solutions need to be designed to nail one solid use case at a time. Expansion beyond that gets to be tricky.

A good example: I recently spoke to David Porter, CEO of 8tracks, a radio service that features playlists curated primarily by the service’s pro DJ community. David mentioned that 8tracks had recently hired a data scientist to match his listeners to playlists that they might enjoy.

An algorithm must be very good to nail this use case, but it doesn’t rise to the level of a playlisting algorithm, where a user will think you don’t know music nor them if a Coldplay song ends up in a Jose Gonzalez playlist.

Defining what your algorithms are meant to do and sticking closely to those use cases is vital for success.

  1. Man Guides The Machine

An algorithm must be built as a tool for curators and not simply a technology product. Therefore it must be tunable and adaptable. There is no such thing as ‘code lock’ on an algorithm.

In my experience, this is not the way many algorithms have been built. Machine learning–the ability for algorithms to improve based on usage–is a big topic right now for many technology companies, but I have yet to see one example of a music algorithm that gets smarter with time. Ensuring curators have input and a modicum of control of algorithms is extremely important.

  1. Playing Your Position

What makes managing a music algorithm so absurdly challenging is that no single person is qualified to manage it. You must posses a full understanding of music composition as well as its place in culture. You should have the knowledge of how a data scientist goes about their work. And you have to have a keen observation about how consumers behave in the system.

Without any leg of this stool, the product will end up hamstrung. It cannot be managed by one human, unless you have a consumer driven, musicologist, data scientist on staff (not bloody likely), therefore it requires a team of experts to tackle the problem.

Each will bring an expertise and needs to trust other members of the team. Success should be judged on results and data; not taste or perfect code.

  1. Match Curation to the Taste of Your Listeners

This one is easy to say and hard to pull off. Curation should closely mimic the usage in your system. While a marketing approach will influence who your listeners are, good old data and analytics should be fastidiously monitored and results fully understood by the team.

A curatorial staff must adapt their approach to what the listener is doing, and what brings more value to their experience. And above all, it’s about your listeners’ tastes. Not your own.

Tim Quirk, my former boss at Rhapsody and formerly Google’s global content programming head, authored the objective approach to editorial that we practiced heartily at the service. He recently posted a series of tweets that questioned the practice of tastemakers being the lead programmers at services and believes that curators should function more like ‘park rangers than gatekeepers.’ “Yay curation. But boo anyone who thinks he or she knows better than you what you should listen to,” Tim summed up.

  1. There Is No Finish Line

The algorithm will constantly need to adapt to the music, the customer usage and the technology. Likewise music trends change over time. After all, few could have predicted the amazing rise (and the fall) of EDM? As long as you have music, you must have a team who lives and dies to have the perfect music catalog, the algorithm and the curation to fully create a great music experience.

The promise

The first generation of streaming services focused closely on catalog and access. We’re nearing the end of this era, as pretty much everyone has the same catalog and the apps are very similar. The next phase will focus on the music experience of the services. Curation, whether lovingly hand-crafted by humans, or processing massive amounts of data crunched down by an algorithm, will be the battlefield all the services will vie on over the next couple years.

We can already see this battle taking form as ‘the humans’ vs. ‘the geeks.’ That’s a mistake. A company needs to seamlessly blend these talents together to build curation that listeners will enjoy and create true value.

More Curation on Curation

Billboard What Apple’s Hiring of Zane Lowe Signals for the Company’s Music Strategy

Hypebot Zane Lowe Could Do More For Discovery At Apple Than Echonest’s $25.6 Million Does For Spotify

Music Ally Apple Hiring for iTunes Role with ‘Specific Expertise in Music Journalism’

Business Insider What We’re Hearing About The New Music Streaming Service Apple is Developing in Secret

The Magic Numbers: How Apple Beats The Demise of Music Downloads

There are two numbers that you need to pay attention to in order to make sense of Apple’s breathtaking acquisition of Beats Electronics. Neither of them is the rumored $3.2 billion price. They are 13.3 and 800 million.

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Apple’s saint Steven P. Jobs  said customers wanted to own their music. Not anymore.

The first number is the percentage that music downloads have decreased in Q1 of this year compared with 2013. This is on the heels of a 5% decrease last year, so it’s looking like the decline is picking up speed. It’s pretty clear that the download era is waning and Apple knows this better than anyone. I’m sure the company has a phalanx of data analysts poring over projections and understand that the rate that customers buy downloads might not be in a freefall, but it could be coming quicker than anyone expects.

It’s pretty clear when it comes to the choice between buying downloads or using a streaming service, customers are beginning to choose streaming. But so far, Apple has sat out of the subscription music trend. After all, the Book of Jobs says that customers wanted to own rather than rent music.

Those days have passed. Apple needed to hedge their bets and get into streaming. But instead of building another bolt-on to iTunes as the company did with their underperforming radio service, Apple decided to speed their way to market by purchasing a hot new service that had a lot of buzz, but hadn’t scaled so much that it was prohibitively expensive. Beats is the most viable of all acquisition targets.

While music purchases may be falling, it’s still a big business for Apple. So instead of creating another option in iTunes that would potentially cannibalize download sales, why not just buy a service and keep it separate? Streaming blows up: Apple wins. Streaming doesn’t pan out, well, it will still have the iTunes store chugging along.

In The Cards

The second number refers to the 800 million iTunes accounts, most with credit cards on file.  Those credit cards are the keys to the kingdom for anyone who wants to sell something in the store. Apple charges a 30 percent premium for companies to use their in-app purchasing system, where a customer can subscribe directly from the native app.

After Beats Music’s troubled launch period didn’t produce many subscribers from the 7-day trial, company executives were calling around to see how other firms dealt with the 30 percent Apple tax (answer—you eat the $3 per customer a month).  In late April, Beats launched in-app purchase and the results were stunning. Their iOS app became the number one overall free app.

Just as important as in-app purchase is getting featured in the iTunes store. Placement in the iTunes store can make a hit out of an app and can mean hundreds of thousands of downloads. Combined with in-app purchase, the store is a kingmaker that can make or break a company. So once Apple integrates the Beats app, it wouldn’t be surprising that the app will get a permanent featured position in the store. Cha-ching.

Oh, and that $3.2 billion price tag? With Beats Electronics’ hardware business already creating significant profits, Apple’s purchase price could be covered within a couple years. So in essence the company is getting into streaming music for a song.

More Acquiring Minds

FT: Apple In Talks to Acquire Beats

Re/Code: Why Apple Is Betting Big On Beats

Om.co: On Streaming: Apple, Beats & Spotify

Apple Insider: Jimmy Iovine Set To Join Apple?

Dylan Highlights The Music Bowl

Bob Dylan's Chrysler Ad
Bob and friends getting to work on your car.

Yesterday was the coming out for Beats Music service. A glitzy ad for the service featuring, Ellen DeGeneres fit in nicely amongst the cheesy car and beer commercials during the Super Bowl, though it wasn’t one of the more popular ads according to the reigning expert on these things, Hulu’s Ad Zone. Seeing that it was a game for only about a quarter and a half, it would make sense that anything airing in the second half would be forgotten. But beyond Beats were many other ads for digital music products. Sonos’ strange Color spot. Shazam had its vehicle fleet wrap branding all over a car commercial. U2 giving away a song on iTunes thanks to Bank of America. It’s reaching the point when digital music is embedded in nearly every initiative. There’s a saying that there’s no such thing as e-commerce anymore. It’s just commerce. Much could be said for digital and the music industry. It’s a necessary part of everything we do.

Of course there was much gnashing of teeth and wailing over Bob Dylan’s ‘sell-out’ Chrysler ad on social channels. There was something slightly unseemly about the spot that included archival footage of Bob’s early era mashed up with pool hall shots and Bob affirming “We will build your car.” It was a bit strange, but whatever. I would suggest the time to complain about the latest icon selling out by placement in (mostly car) commercials is well over. I didn’t hear much complaining about Dylan’s 1966 song “I Want You” in a yogurt ad that features a mighty mean bear almost right before the Chrysler ad.

More Time Wasters

Hulu’s Ad Zone

Why Bob Dylan Lost The Super Bowl and Why Coke Won

Watch Bob Dylan’s Super Bowl Commercial for Chrysler