Pandora’s Data Driven Tautology

tautology: needless repetition of an idea, especially in words other than those of the immediate context, without imparting additional force or clearness, as in “widow woman.”

Imagine you are trying to get a club promoter to book your band somewhere outside of your home base, perhaps somewhere you have never performed before.  Remember–the promoter isn’t calling you, rather you are calling the promoter, club owner, talent buyer, whoever makes the booking decision in the venue you’ve never been to before.

Since the assumption is that you’ve never been to the club before, indulge my fantasy another step–you are able to get the promoter to take your call or respond to your email.  A big fantasy, I know, but let’s go with it.  Those who toil in this particular vineyard will know that what’s far more likely is that (A) if they’ve never heard of you, then (B) they don’t care about you in that ontological sense that only club promoters truly understand.  But indulge me.  (And be sure you also indulge the various streaming services such as Pandora that are selling this “data” snake oil.)

And indulge me one step further–assume that the real value of your “data”–i.e., the consumer behavioral data relating to your fans that you drive to the streaming services by promoting your record–is not more valuable to the streaming service in the aggregate than it will ever be to you individually.  Thanks for that indulgence because that is a really big assumption.

Now imagine telling the club owner that the reason she should give a slot to you on her stage–and pay you for it–is because Pandora says that 50, or 500, or 5,000, or 50,000 users in the town streamed your tracks.  

If the club owner takes pity on your mortal soul, she won’t just hang up on you right there.  And if she doesn’t just hang up  on you, what do you think she might say next?

She will probably be looking for some kind of real world confirmation that those streams mean anything.  What might that be?  A verifiable data point like you scanned x number of records in her town.  Or that your offer of work is conditioned upon your pre selling y number of tickets–more likely that your ability to get paid anything will depend on you selling those tickets.  Or that a local band that does well in the venue is willing to have you support them in their own show in the venue.

But do you really think that any club owner–and I’m not talking about house concerts here, I mean someone with a a liquor license and overhead, you know, a nightclub–would risk their own capital or opportunity cost because some company they didn’t know said that you got a few streams or views in the town?  More likely in the zip code if they can even pin it down that far down the verifiable data chain?  

Speaking of verify, how do you know that this information is correct?  Because Pandora says so?  Because Spotify says so? Absent any of these conversion factors like sales of tracks verified by an independent third party, presales or a local guarantor, why would the club owner take a chance?

And if they require these conversion factors in order to take a chance, why would they need the Pandora “data”?

If you deal in the physical world of vinyl or CD sales at retail or what’s left of it–like if you are a record company for example–substitute the club owner for the inventory manager or buyer for a local record store.  You know how you would get shelf space, price and positioning in their store in the same circumstances?  Because Pandora said so?  

Not so much.  You’d get into the store by reducing their inventory risk which almost always means adjusting the price for the vinyl or CDs to zero or near zero, or salting the full price wholesale inventory with free goods.  For example, you could offer the store 5 or 10 CDs for free if they promised to put them on listening posts.

If you had a local street team, you might be able to wriggle past this standoff point by swarming the club owner or record store.  In the case of the club owner that is probably going to require a bunch of street teamers who are old enough to get into the club, etc., but it could be done in theory.

Again–you can do that without the streaming data if you manage your fan communications.  

We have some real questions about how clean this data is, how granular it is, and how it is derived.

Here’s where I think it ends up:  What Pandora’s “data”–based on how much your tracks are being streamed on Pandora–tells you is how much your tracks are being streamed on Pandora.

Absent something that provides that conversion factor, those additional real world acts that involve more effort than just letting Pandora create a channel for you based on some other artist, this is just more Internet snake oil.

If this data is so valuable, what is Pandora doing with all the data it currently collects?  Well, let’s see. Who handles all of Pandora’s advertising now?  Pandora uses Google’s Doubleclick affiliate for its advertising sales.  That would be the same Google that is a member of DiMA, the CCIA, the Internet Association and the Consumer Electronics Association and is actively screwing indie labels through it’s YouTube affiliate.  That Google.

Pandora acknowledges to its investors that its agreement with Doubleclick exerts considerable influence on Pandora’s business.  “We rely upon an agreement with DoubleClick, which is owned by Google, for delivering and monitoring our ads. Failure to renew the agreement on favorable terms, or termination of the agreement, could adversely affect our business.”  I’d be very interested to know who gets that data now–is it already sold or bartered to Google through Doubleclick?

I’d love to be wrong about this, but I’m still waiting to hear exactly how this data is collected and collated to understand why it is not just another tautology from another Internet company that does not understand how to sell records, put butts in seats, or as we say around here, has no one who has ever humped a trap case.

What is far more likely than this mystery “data” being valuable to you, is that it is valuable to them–particularly in the aggregate.  And since collecting this data is nowhere permitted in the terms of the compulsory license available to Pandora, it’s unclear who has the right to the data much less who has the right to sell it back to the artist who created it in the first place.  Unlike compulsory licenses, interactive licenses have an entire negotiation about who owns the consumer data and it should be owned by the label or copyright owner doing the licensing at no additional cost.

This all comes down to the same thing:  If streaming services can prove they are driving the sale of another good, that will be great.  What we do know is that streaming appears to be a substitute for and is not driving record sales.  Does streaming drive some aspect of the t-shirt economy? It’s hard to see how these services even do that much.

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