[from The Comet]
The first Billboard chart was published in 1936, and the Top 100 list first made its appearance in 1958. Now, in 2010, a new crop of startups are tracking the data that’s important in today’s music business – not CD sales – but Facebook friends, Twitter mentions, and P2P file transfers.These companies are leading a revolution in music industry data.
Upstarts like NextBigSound are aggregating valuable social data from across the web into convenient dashboards for bands, managers, and labels to track the success of their marketing activities. More established heavyweights in the space include Big Champagne, which targets its service at big brands who need to track consumer engagement within new media. When I first saw Big Champagne CEO Eric Garland present at South by Southwest almost three years ago, I thought the idea that artists should use P2P data to plan and track marketing was incredibly innovative. Today, I wouldn’t consider formulating a marketing plan without it.
For artists, all this new data is all unequivocally positive. More information means more transparency in a historically opaque business. More information also creates the possibility for better decision-making and bigger profits.
For companies in the new music data business, value could be harder to come by. Much of the information being tracked today is a far cry from traditional data sources like Nielsen Soundscan or Pollstar, which are generally proprietary, limited in scope, and expensive to access. Social media data is increasingly accessible via APIs and public-facing websites, and there is a lot of it. The price of publicly available data will eventually be driven to zero, which means that value can only be captured from the analysis of that data, and not from the sale of the data itself.
Which leads me to a point unchanged by innovation: Data is only as good as the conclusions one draws from it. The real revolution will not come from data itself – it will come from those who know what to do with it.
The real value in that data comes from the insights and conclusions we extract from it. Thanks to a slew of innovative new companies and technologies we now have access to more social media data than ever before, but good analysis and valuable insights are just as important as they were in 1936.
We will likely see the emergence of new services and companies following right behind those providing data, new services and companies specializing in analysis, advice, and insight. This means that real opportunity in the music data revolution is for the smart bands, managers, and labels who can innovate the ways they analyze data, and for the companies that can help them do it.
It isn’t the number of Twitter followers you have that matters, but what you do with them.