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What do the recent Twitter & Shazam partnerships with the music industry really mean?

Posted by Mike McCready | February 20th, 2014 | 7 Responses

Better late than never. But they won’t work.

I’m fond of saying that in the race to adopt new technology the music industry finishes just ahead of the Amish. And while I wholeheartedly applaud the late embrace of technology and data in the context of the recent deals with Twitter and Shazam, in my opinion, these particular deals won’t generate the hoped-for results.

The deals I’m referring to are the recent partnerships between Twitter and former Warner boss Lyor Cohen’s new 300 label and the partnership announced yesterday between Shazam and Warner Music Group. Both deals seek to leverage the data generated by the two tech companies to help identify emerging songs and talent.

Both Shazam and Twitter have had for several years the vast amounts of data that 300 and Warner want to tap. And both tech companies operate primary businesses that have nothing to do with helping the industry achieve the goal of “early discovery”. Rather, they generate an enormous amount of potentially relevant consumer behavior data and these music companies are going to apply their resources to try to make sense of it. Presumably, the goal is not only early discovery, but also the reduction of risk when Warner and 300 invest in promoting the music, since they will likely have a lot of clues about where they should spend their resources both demographically and geographically. It follows that since Shazam users are already performing an act that has them engaged with the music, Warner sees the deal as providing a channel into a receptive market.

1. Social signals are highly unreliable when it comes to emerging music.

I am certain that these deals will generate occasional successes. But I’m also certain they will not constitute an efficient and consistent method of finding the needles in the haystack. Social signals already constitute an arms race between those trying to make sense of the data and those trying to spoof it. The spoofers only have to continue to lead that race for the data to be too noisy to be consistently useful. Regardless of the number of data scientists thrown at the problem, if the signal to noise ratio is too high, there’s no useful data of which to make sense.

With 11 hours of audio content uploaded to SoundCloud every minute (leaving aside YouTube, BandCamp etc), it’s not even always about the false positives spoofers can cause. It’s also about the amazing songs and artists that don’t bother to spoof (or aren’t good at it) or even bother to try to cut through the noise. I’m talking about the 4m+ tracks on Spotify that have never been heard, not even once – or the 32% of songs on iTunes that sold one copy or less. Much of that music probably sucks – but not all of it and the great stuff will never be detected by the data Twitter and Shazam can provide.

2. Social signals are a lagging indicator and do not highlight what will gain traction, only what’s already gaining traction.

Furthermore, both Twitter & Shazam are, at best, only able to assist in early discovery, as opposed to first discovery. There’s a big difference between the two when you look at the potential return on investment for the music companies as well as the size of the opportunity itself. If Warner had been first on Macklemore & Lewis instead of just early the opportunity would have been bigger and the returns on that opportunity would have been higher.

The data provided by Shazam and Twitter will always be a lagging indicator, meaning that by the time songs and bands get meaningful traction on Twitter or Shazam, Warner and 300 will probably be second to arrive and will find early investors already there. Even if the traction were 100% organic and not generated by a financed push, the gained traction would be at least as observable to the artists and their camps as it is to Twitter & Shazam. That means worse deal terms for the music companies and a burden of finding early-stage backers most artists can’t (or don’t want to) bear.

3. Social signals leave too much behind.

Additionally, Twitter and Shazam are rarely ever going to detect the killer songs written by the non-performing songwriters, top drawer material that comes from unknown songwriters who aren’t plugged in to the industry, and bands and acts who aren’t breaking through the initial noise barriers that prevent them from getting any serious traction.

What will work.

What the industry needs is a true A&R filter. One that provides a leading indicator of success potential. One that offers true first discovery rather than early discovery. One that enables the industry to lead, taste-make, and influence rather than follow. Those who know me know I’ve been pursuing this holy grail for the industry since 2001.

The number of songs and acts that have been offered deals after having been discovered by the industry on Twitter and Shazam is unknowable, but in 2013 alone over 4750 songs and acts were selected by the industry for opportunities at Music Xray. That’s over 90 a week or about 1 every 2 hours.

I spent a good part of last year arguing in online public forums and then privately with Jack Ponti, a well-known industry veteran who opposed Music Xray’s approach to solving these A&R filtering challenges. But after months of back-and-forths and eventually a few afternoons spent with a whiteboard hashing out the current product and incorporating elements of Jack’s views on market segmentation, we were able to come together to construct a product road-map for 2014-15 that will perform even beyond my previous expectations, which of course were already high.

Music Xray seeks to be the industry standard for A&R filtering and music supervision tools. It’s a collaborative effort of 1200 early-adopting industry professionals who all make their living with their ears. They enact an open door policy to unsolicited submissions via Music Xray but Music Xray’s toll-booth business model puts the artists themselves in charge of the first level of filtering. Sure, some junk gets through but it’s filtered out quickly leaving only the top material to be heard by most professional users. Many of the submissions that come through Music Xray are songs that have never been released in any way, shape, or form. Shazam and Twitter are never going to shine a light on them.

Music Xray is currently used by 17 major labels but it’s still largely the forward thinkers who are benefitting the most. In fact, not all professional users of Music Xray even take advantage of the site’s most advanced and useful features. But over time, as we continue to insist on product excellence, Music Xray’s results will scream high above the din of the 11 hours of content uploaded to SoundCloud each minute. And if only 0.01% of that music has any commercial value at all, that’s over 90 minutes per day of commercially worthwhile music that ought to be discovered by the industry.

Mike McCready
Co-founder & CEO
Music Xray

About StudioThemes

Mike McCready is an entrepreneur at the crossroads of music and technology. He pioneered the introduction of Hit Song Science into the music industry and followed up with Music Xray, the company he co-founded and serves as CEO. His companies have been the subject of case studies at Harvard Business School, IESE and he frequently guest speaks at many of the top business schools around the world. He helps the music industry identify high potential songs and talent and helps musicians get deals, get fans, & get better:

  • jon goodman

    Thank you Mike. What you have done with muiscxray is the very first true example I have ever seen of uniting new talent with new labels… you are the best thing to come along since sound exchange and maybe better. I have been in the business since 1996 and my father before me since 1956. These days everything is gobbled up into monopolies, but musicxray is genuinely for the individual and that makes it very special.

  • http://none Jack Ponti

    There’s a vast misconception concerning the way new music and talent is discovered in the new paradigm of the Internet.

    While it’s true that anyone can now simply create a web page, populate every social media site there is, and virtually self-promote and distribute music, the reality is that 99.99% of that music will only be heard by family and friends.
    If the rallying cry of “we can do it ourselves” were true, then why are there not thousands of success stories? Because the ability to market and promote inside a clogged bandwidth is virtually impossible. You can’t build critical mass. This also creates a big problem for the industry. There is no filter.

    Now, one may say the lack of a filter, gate keeper, standard, etc. has allowed music that would have never been heard a chance to be heard. But by who? Surely not the masses. It’s most likely to be heard by only a few. Sure, now anyone with a song can go full-bore Internet crazy and do all the wonderful things that people claim will help build their career, but it’s just not true. Again, where are all the success stories?

    Pre-Internet, the music industry had a filter. Perhaps it didn’t work all of the time and I am certain some great music was lost along the way due to that filter. The filter involved the artist knowing someone with genuine access who could get their music to someone who could actually do something about it. The filter also involved a policy of “no unsolicited material”. Meaning it would not be listened to unless someone vouched for it.

    There was a dual role in the no unsolicited material policy.

    One, was it avoided deep pocketed and pointless lawsuits. If unsolicited submissions were allowed, someone could randomly send in a demo and then months later find some ambulance chasing attorney to file suit claiming infringement, hoping the label/artist would settle. But the primary reason for the policy was that if you allowed unsolicited material you opened the door to everyone on Earth who believes they have talent. And most don’t. The mountain of material that would have been sent in would have taken thousands of people to sift through. So yes, we more than likely lost some genius talent due to the restriction of that filter but we also found plenty as well.

    The industry believed that if a known manager, lawyer, publisher, producer, etc. was presenting music, it must be somewhat good. Now granted, it sometimes wasn’t. But for the most part, it met a standard and certain level of professionalism. It also spoke of the artist, writer, producers, own ability to hustle and get to someone with genuine access. It worked well, as evidenced by decades of music.

    But I have always said, the next Beatles were in a basement somewhere and will never be discovered due to lack of industry access. I’m sure we missed out on plenty.

    In my 35 plus years in this business, wearing every possible hat that you can, 99.99% of my success was directly due to a filter. I was hammered by one of my clients to listen to India Arie. My manager introduced me to Jon Bon Jovi. A&R men brought me countless projects in development. Lawyers made introductions. The list is endless.

    So here we are in the Internet age. No filter, no gate keeper, it’s a free for all!

    But what do you do to genuinely find exceptional talent? Google search “good music”? Good luck with that. YouTube? If you have a decade of time on your hands. Reverbnation, Facebook, Soundcloud, Twitter, sure there are a multitude of possible places, but none of this has been filtered.

    Unfortunately without a filter, you have to sift through hours of horrendous music to find even a remote possibility. Why? Because just like in pre-Internet days, anyone who can play any instrument or remotely sing is now convinced they “have what it takes” and they just clog the bandwidth with music.

    Even from a psychological point of view, pre-Internet, people somewhat filtered themselves, thinking (or knowing) they were just OK, and why bother. But with the proliferation of TV shows like American Idol, we are now in the “yes I can” stage. Though that is wonderful, it can also be painfully unrealistic. Then with the advent of sites like CD Baby, people assume stardom is around the corner. For some it is. For many it’s not. But the illusion is real and by having a web site and distribution, suddenly you are there, or so you think.

    I am not condemning that nor making fun of it. It’s wonderful to share your music with people and even if that means sharing it with only one other person that is a success and should be applauded.

    However the heartbeat of the music business is new talent and there is a tremendous amount of undiscovered new and brilliant talent lurking out there caught in the miasma of a clogged Internet. Like I said, we missed some great talent along the way and truth be told, we are missing way more now.

    A true and accurate filter will bring that talent to the forefront in rapid time. I salute and respect those who chose to go it alone, DIY, indie, whatever you chose to call it. But this business needs new talent and for those who want to be within that framework, they need to be discovered. Be it an artist, writer, producer; they need to have access and we, as an industry, need to access them or we’re all in trouble.

    There has been a method of A&R research in place for over a decade now. It works very well, however it relies on spotting blips on the radar screen of something already in motion, something that has traction. Be it local or regional sales or radio airplay, it is already moving.

    The same can be said for the recently announced deals with Twitter and Shazam moving into the label space. That is not discovery of talent, rather that is identifying moving targets after they start moving. The very essence of how Shazam works is you have to be searching for something you have already been exposed to. The same can be said for the concept of using Twitter as an identifier. Both are post, not pre.

    There has been no genuine, and accurate, A&R filter in the entire industry to sift through the clogged space that we are currently subjected to. In order to do that properly you need to create the proper mechanism that is human based and software synergistic.

    As you know, Mike [McCready of Music Xray] and I began in a highly acrimonious relationship, one of war. We have been speaking and meeting for months now, coming from opposite ends of the spectrum to find a genuine solution for the lack of a true A&R filter. We had opposing views but have come to an agreement. Chances are you are on to something monumental. I am convinced we are building that now.

    The benefits to both the artists and the industry are enormous and I truly believe we can make a difference.

  • Pingback: “There has been no genuine A&R filter in the industry… We are building that now.”- Guest Post by Jack Ponti

  • Scott Pollack

    A filter, ummm…yes…a filter.

    I applaud the efforts of Music Xray, there’s a need. The Yellow Kid – reputed to be at the time the most successful con man for his generation, (meet Bernie Madoff, Kid) famously said when asked if he were to ever go legit; what would he do?, he replied, I’d find a vacuum and fill it.

    Without getting too deep into the esoterics of music, what’s a great piece of art, the biz attending to it and the talent required to exercise “a potential,” the problem is the culture of the folks who attend to the biz on two major fronts, corporate channels attending to quote unquote, deals for prospective talent and the channels that produce the results for developing the audience’s level of consumer behavior.

    What can you expect when 50 years of corporate biz folks, most of whom stayed within the confines of nepotistic behavior insulated themselves from potential? What can you expect of the market’s behavior when 50 years of mostly rank and file commercial garbage taught the audience’s palette to accept garbage as the next big thing, to the degree that has been manifested for far too long? What can you expect when radio can’t find innovation and the guts to exploit it? What can you expect when publicists are the arbiters of taste by virtue of being paid to pander junk material by those who can pay the ticket price for important press and the back channels to that press is closed to anyone except for about 100 big time PR names who have the pull to book the airwaves?

    Every once in a while, just as it has always been, by whatever means happens to be the way things get done, in whatever era, a great tune finds its way to success; witness: Lorde and the tune “Royals”. Think she can top that one with another?

    Think cats like Harry Nielsen or McCartney, or Sting grow on trees?

    The proportion of great artists to the rest has always been the same, though the scale has changed due to the price of entry which has been diminished to such a great degree that anyone can buy something to make noise with, to try and game the market by whatever means available at the time…and these days there’s a plethora of ways to do this, as is mentioned above.

    The Ray is a great place for corporate channels to put a throttle on the way into the market for corporate participation.

    These days, it’s not art that these channels are looking for, it’s the same as it has been since around 74, which is: Who’s got something we can reasonably be sure can make us some money on in the next few months, maybe a year? That’s in the context of the “hit tune” category.

    As always, the coasts are sticking their fingers in the wind, even more-so nowadays, and who’s got a sweet spot for where the kids are getting their taste buds wet. Of course, that is dictated by what’s been trending too and where the trends have been.

    Corporate is always looking to do the least amount of work possible for the greatest return, and quickly at that. So they’re trying to find the easy money as they’ve always done. Nothing has changed and radio is even more corrupt now than I can remember. Only thing is, it’s legal. Oh, Clive, where’s those good ole days, eh?

    To find something truly great takes hard work and lots of detailed research and elbow grease. That’s not going to change.

    Yes, there’s something to be said about finding a place like here, where artists of merit can find their way through some of the noise, which is the point. It’s another thing to find a nugget with staying power that doesn’t need gobs of PR muscle to stay afloat because it has a momentum of it’s own.

    The scale back then conservatively was about 10,000 to one. Now the scale is more like 100,000 to one because of the access to equipment and that specific price of entry. Witness Presonus v. Pro Tools.

    The amount of great artists hasn’t changed. There’s only ever a few, here and there.

    We run a radio podcast. We find great tunes all the time and the show has a bite to it. Will we use a “filter” to find them? Will we offer pay for play? No. Reason for that? Can’t be compromised for a quick buck. We refunded folks because we couldn’t get behind someone who had cash but nothing to sell. Did that recently too. We withdrew the bid.

    Our filter is our palette. Without knowing who the hell Lorde was, we found her on another interface, about two weeks out of the box and played her tune Royals on the show. Come to find out we stumbled on something hot and unbeknownst to us she was already making big waves. Kudos to the studio that put her together and boy what a great producer she had, whoever it was. A superb tune/production.

    Recently, we publicized a great talent, ever hear of Strangeways? Ian James Stewart? Album? Junk DNA. Will high school and college kids in America find him? Probably not. If they did, would they dig him? Probably not because he’s too good for their palette. Which was an earlier point.

    Will someone just go get him and PR the hell out of his efforts? Probably not. Who knows?

    Bottom line: Having a great “filter” to throttle influx is all well and good but, finding a great artist will always be the same…some of its luck…some of its hard work.

    Music Xray is a terrific idea for industry folks who need to find something in a bigger hurry than it takes to find something truly great.

    For films, commercials and such, it is an excellent interface but even inside here, in order to find something incredible, ya know, like art, ya still have to dig pretty deep.

    Nothing will replace good research and hard work.

    A&R? It’s a term that nepotistic morons used to describe their so-called magic making back in the day. Nashville used a different term called song-plugging. It’s still the same old runaround and finding something great is still as hard as its always been and will continue to be.

    Don’t follow the trend, BE the trend. BE an artist not a songwriter.

    Scott Pollack Chief Editor, The Critical Post – Chicago

  • PKFerg

    There is new talent through the medium of the internet. Sites like musicxray help to give exposure. I just think most A&Rs do not know where to look. Talent is right in front of you.

    Royals Cover.

    Hi, I’m an artist.

  • Jez

    This all seems to be about matching talent with industry marketing clout in order to create the next ‘big thing’.

    The music landscape has fragmented. As a music consumer I don’t care if the band or artist I like is ’successful’ within the industry, I just want to hear their new music which will come regardless of a ‘major’ deal. Lots of them have an image that would never be ‘marketable’, but then I don’t listen to photographs. Genuine music fans couldn’t care less if the industry has found its next Katy Perry or Lady Gaga, because that world of ‘product’ and celebrity is increasingly relevant only to a diminishing mainstream. I’ll continue to find brilliant artists and bands via social media and real-life recommendations.

    The problem is the industry is losing its grip on a genie that is well and truly out of the bottle. Only the industry cares.

  • Stewart Brennan

    In reply to Jack Conti

    There are people out there that do exactly what you state is required for the future of the music industry; ie becoming “A Filter” for the tsunami of artists that have hit the internet. A computer program will never be able to determine what is good or not, however a person with a good ear for music can.

    I am one of those filters who sorts through 1000’s of songs and artists for the golden hits…I don’t work for anyone but my ability to find the best is proven by what I have gathered on my website in music playlists (2000 – 2014) and artists posts. If there is a job available then I’m one of the filters the industry needs if someone was to ever look for a person with my special talent. I can say this with pride, that I do have a better ear for music than 99.99% of anyone connected to the industry. If you are curious, go to my website and scroll down past this weeks post to the 2000-2014 music playlists. Some of the music you will recognize and some you wont. The whole point is to put all the best music together, that is, a Variety of good quality music that should make a lot of money for a number of people if they only knew.

    World United Music

    Best Regards,
    Stewart Brennan