Can Spotify And Metallica Localize Live Shows With Big Data?

1. August 2018.








Set lists do much more than determine the songs heard in concert.

They also signal to fans the mindsets of their favorite bands and musicians – Are they trying to move past an overplayed classic? Are they feeling nostalgic for their garage days? Does the lead singer have trouble hitting the high notes now? — while usually offering samples of new product. To a certain type of fan, in fact, compiling and comparing set lists amounts to using primary-source documentation to analyze a sliver of music history.

Beyond that, set lists have tremendous power over the concert experience. Play that sixth track from the first album, and that lifelong fan in the front row – the person who put down $150 for a ticket (to say nothing of the overpriced T-shirt, beers and hot dogs) and who might put down another $150 for the next show – will go home happy, content with the hole in his bank account. Ignore every single song from the Grammy-winning bestseller in an attempt at reinvention, and even a relatively casual fan in the nosebleeds might develop a grudge.

Variations of those scenarios are numerous, of course, but perhaps that gives some idea of the potential importance of a new data-backed set list endeavor involving Spotify and Metallica. Spotify digital data will help Metallica tailor its set lists for specific shows, an attempt to appeal more precisely to local audiences that — even in this age of apparent homogeneity — might have slightly different tastes than concert-goers a few hundred miles away.

Spotify Data Thinking

Spotify is coming off its second quarter as a public company, a period that might be described as dramatic. In financial results released last week, the music streaming service said that it had increased its paid subscriptions by 40 percent, but also lost $458 million in revenue. Spotify reportedly has 83 million paid subscribers, along with 180 million total users, a figure that translates into a 5.9 percent quarter-over-quarter growth rate.

Spotify missed big on earnings per share, where it saw a loss of -€2.20 compared to estimates of -€0.68. In addition, Spotify saw a net loss of €394 million and operating loss of €91 million this quarter, showing it’s still a long way from turning a profit.

Those were some of the numbers in the minds of investors and analysts when Spotify on July 28 conducted its Q2 2018 post-earnings conference call. A UBS analyst asked CEO Daniel Ek a question about data analytics: “Should investors think of (data analytics) as a standalone business or one that makes the music industry smarter and could play a constructive role in the commercial dialogue with the music industry?”

“Data and insights is definitely part of the platform, and a key fundamental for how we view the marketplace,” Ek said, before moving to specifics. “As an example, here I have an artist like Metallica, who changes their set list on a city by city basis just by looking at Spotify data to see which of the most popular songs happen to be in that city. And there are many, many other examples.”

It is unclear exactly how the nearly 40-year-old metal band — one of the most lucrative rock music operations in the world, as much of a corporation as an act — uses that data, and how often all that information from music consumers leads to song substitutions and other tweaks. Set lists for such a complicated operation as a stadium world tour that might last the better part of two years aren’t often changed on the fly, after all.

Nor it is clear what business and financial relationship Spotify and Metallica have regarding the use of this data.

But because Metallica makes so much money so long into its career, and has long been known for good customer service, its fan base is extraordinarily loyal, thanks in part to the band’s habit of touring regularly and playing longer shows than most younger group. So it stands to reason that any set list success with Spotify will spark imitations.

Similar Efforts

The Spotify-Metallica set list effort, while new from one angle, also represents the application of “big data” to a longstanding tradition of crafting set lists to appeal to specific markets via the use of such info as radio playlists and requests. Nor is this deal the only program out there that seeks to digitally connect musicians and fans over the question of what to play in concert.

Take the Dave Matthews Band, another longstanding survivor of the fiercely competitive and fickle music business. After three hardcore fans took in one of the group’s shows in 2015, they left disappointed that the songs they wanted to hear most had not been performed. So, according to one account, they created an operation called Set the Set that essentially functions as a digital request line for concerts.

Participating artists are under no obligation to play songs requested by fans — though playing a particular popular request during an encore would make for an emotional experience, the company said. And a certain number of fans must make requests before the company sends the information to bands. In the case of a major-league act such as U2, for instance, Set the Set has received requests from nearly 31,000 fans, and will send over the requests when that number hits 60,000.

The fans who use the mobile app to request songs in concert — the company said 83 percent of Muse fans did so — provide their email addresses, names, ages, genders and location, which artists can use for marketing. Fans can also “boost their votes” by donating to charity while they vote, giving bands some good PR: The company said that New Kids on the Block helped raised some $50,000 for autism research in this way. Fans can also turn their concert requests into Spotify playlists, which in turns promotes artists via that digital music platform.

Digital technology has already radically changed music — just ask one of those grumpy fans from the 1960s and 1970s who complain (not without justification) about the sterility of compact discs and MP3 delivery formats, and who might then tell stories about how album covers made possible certain illegal activities associated with rock-and-roll. Can digital data bring musicians and fans even closer together, and enable what amounts to a more precise form of localized customer service? The biggest groups are at least trying it out, so these efforts could have a shot at success.

It’s not as though big data is getting any smaller.

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