Music Industry

The New York Times wrote this really good article about what the internet has done to and for the music industry. Check it out here.

Consumer Taste Sharing

Mike Mcguire and Derek Slater from the Berkman Center for Internet and Society recently published a 12 page analysis of how recommendation sites could potentially increase a wider variety of sales (I found it on Chris Anderson's blog..I seem to be finding all my resources there). Not only will recommendation sites boost the more popular items/commodities but they should also help boost the "niches" of the market. You can read the article here.

This article is great because it gives some actual statistics to their findings.

• Nearly one-fourth of frequent online music users say that the ability to share music with
others in some fashion is an important criteria when selecting an online music service.

• One-tenth of early adopters stated that they often make music purchases based on
others' recommendations.

• One-third of early adopters of digital media surveyed by Gartner stated that they were
interested in online music discovery and recommendation technology that is actually
powered by their taste in music.

• Some of the most-regular users of online music services, whether free peer-to-peer
(P2P) or paid services, are the most interested in consumer-generated recommendation
tools.


Predictions
• By 2010, 25 percent of online music store transactions will be driven directly from
consumer-to-consumer taste-sharing applications, such as playlist publishing and
ranking tools built into online music stores or external sites with links to stores.

This article is excellent because it examines the potential these recommendation sites might have. One part of the article states "[recommendation sites] seem to be a requirement to maintain market growth in licensed online music services." They also take a look at the copyright issues that prevent a lot of these sites from actually expanding to greater heights.

I love the last part of the article because they argue that recommendation sites encourage the possiblity of people in our cutlure to "think for themselves." I'm not saying that we don't already, but the article makes a great point ---

recommendation tools in particular could help make a more participatory, democratically defined culture, taking influence from powerful legacy tastemakers and encourage creativity...the more varied ideas and forms of art that people are exposed to, the more they are forced to 'decide' for themselves how to think and act.

Recommendation sites are a way for individuals to spread a piece of their individuality to a potentially limitless amount of people. This ability in turn allows a constant exchange of individual tastes, and could allow for much larger, more creative culture. I'm not really sure who is against these types of sites, but I do think that we as consumers, and participators in this culture should be allowed to spread our individual tastes, and should be allowed to learn about others. I do feel that sites like pandora and last.fm will not only increase a market for artists, but also increase the pool of creativity and individuality. We no longer have only a handful of radio stations to find our music, we have a limitless store at our fingertips.

Now Playing: Every Movie Ever Made

I found this video on youtube. It is actually a promo video for Chris Anderson's book The Long Tail but it also provides a very brief introduction into the revolution of niche markets the Internet has made possible for our generation. Personalization is never mentioned, but at the very end of the clip Anderson says, "As consumers, we've never had more music to pick from. We have a natural tendency to diverge in our tastes and that can finally be recognized and we can find what we want." That last line emphasizes the personalization market because through the use of personalization/recommendation consumers have a much easier time sorting through the masses now available through the Internet, and can find what they want.

Netflix personalization feature boosts subscriptions

On Chris Anderson's blog he has an article about Netflix describing why Netflix predicts a huge increase in subscribers in the next year. What's most important about this is because one of the factors to this huge increase is because of the recommendations they give. They predicts that this personalization feature along with a few other features will boost subscriptions to 20 million by 2010 -20012. You can read the article here.

Chris Anderson's Long Tail

So I really want to try and explain what the long tail actually is because I think it has so much to do with the phenomenon of web personalization. Anderson has explained it in detail in his book "The Long Tail," but I will try and give you a brief overview.

The long tail is a math term, but Anderson uses it to describe his theory "that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail." He gives a much better analysis of it on his blog.

Here is what a long tail looks like:


The orange part of the chart represents all the less popular, "niche" products in our economy. Before the Internet, it was incredibly hard, and unproductive for companies to target any orange area because the majority of people only wanted what is in the red (the most popular items). Because of limited shelf space, and the cost of storing all these items, companies tended not to keep or sell any of these less popular items -- simply because it was too expensive, and they ended up losing money.

This is where the Internet becomes such a huge platform for change. The Internet allows an almost infinite amount of shelf space, and also allows the cost of this shelf space to drastically reduce (there is no need for actual stores).

As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-target goods and services can be as economically attractive as mainstream fare.

Anderson claims that there are "two factors that create functioning Long Tail markets:

1) massive increase in product variety,
2) massive improvement in findability

Sites like Pandora and LastFM have both of these factors. They offer an enormous amount of variety -- especially with Pandora because they do not recommend songs by genre, they recommend by each song's individual analyses which opens up a huge possibility of recommendations. Both sites offer the findability factor as well. On both sites you can search for a specific song or artist. Again, these two features are incredibly unique to the Internet because on the radio you are limited to a small amount of variety, and you are not allowed to search for any songs, but instead are only allowed to listen to what the radio plays for you.

We see now why sites like Pandora, Last FM, and even Netflix can be essential facets in boosting and maintaining this new kind of economy. I put in a song I like in Pandora and the site recommends several other songs I have never heard (or haven't heard in a very long time), and are probably not even that popular. I end up really enjoying this song, and realize I can't hear it on the radio, nor can I purchase it at my local music store. So I click on the song, and purchase it off Amazon.com -- another site with almost limitless shelf space -- and they have the very CD I'm looking for. Now multiply this event by the thousands and you find that more and more of these "less popular" items are being sold at an incredibly rapid rate. Because the Internet makes it available, accessible, and extremely easy to get exactly what I want -- it has become the essential reason why the long tail has emerged.

Recommendation Sites Pay Off

So creating better programs that make recommendations more accurate, and hopefully more successful can actually pay off in the end. NetFlix - the Internet movie site that lets customers rent movies online - actually offered to the public a 1 million dollar reward for anyone who could create "a system that is more accurate than the company's current recommendation system by at least 10 percent." I'm pretty sure the contest is over, but there was an interesting article written about it in the New York Times. Netflix uses the collaborative filtering system (same as Last FM). You can check it out here at News.com

Pandora vs. Last FM

Steve Kraus gives a really good breakdown of the differences between these two personalization sites. Like I said, they are both personalized sites, but the algorithms of the two are very different. Kraus explains it here..

Pandora and Last.fm: Nature vs. Nurture in Music Recommenders

Here is some of what he says,

Algorithmically, Pandora versus Last.fm is something like the nature versus nurture debate. Taking the nature side, Pandora’s recommendations are based on the inherent qualities of the music. Give Pandora an artist or song, and it will find similar music in terms of melody, harmony, lyrics, orchestration, vocal character and so on. Pandora likes to call these musical attributes “genes” and its database of songs, classified against hundreds of such attributes, the “Music Genome Project.”

On the nurture side (as in, it’s all about the people around you), Last.fm is a social recommender. It knows little about songs’ inherent qualities. It just assumes that if you and a group of other people enjoy many of the same artists, you will probably enjoy other artists popular with that group.

What is Last FM?

Wikipedia gives a pretty detailed definition for what Last FM actually is.

Last.fm is an Internet radio station and music recommendation system that merged with sister site Audioscrobbler in August 2005. The system builds a detailed profile of each user's musical taste, showing their favourite artists and songs on a customizable profile web page, comprising the songs played on its stations selected via a collaborative filter, or optionally, recorded by a Last.fm plugin installed into its users' music playing application.

Recommendations are calculated using a collaborative filtering algorithm so users can browse a list of artists not listed on their own profile but that which appear on those of others with similar musical tastes. Last.fm also permits users to manually recommend specific artists, songs or albums to other users (as long as the recommendation in question is included in the last.fm database).

Here we have two very different ways of personalization. In contrast to Pandora, Last FM actually recommends music based on other people's tastes (a type of collaborate filtering). Sites like Last FM which make recommendations according to what other users are engaging in tend to be the more common kind of web personalization. Both are part of the phenomenon, and interesting to analyze and understand.

Last FM Charts

I am not at my computer right now, so I can't download the actual software for last.fm. However, this site offers a lot of different features. One of which is the ability to copy and paste your music charts (all the music you've been listening to along with a link to listen to each song) into your myspace, livejournal, blog, etc. Here's mine. When you click on it - you can also start listening to each song if you'd like. What's unique about this chart is that I only selected one song to listen to, and the site recommended the rest. All of these songs that you see here are songs recommended specefically for my ears, and my enjoyment.

Last FM

I found another site called last.fm. It appears to be the same thing as Pandora, but the way it links you to other music isn't by the website's employees individual song analysis, but rather other users likes and dislikes. I know its set up specefically for each individual user but i'm not exactly sure how it works yet. It's free so try it out.

http://www.last.fm/explore/

Chris Anderson

I was reading through one of this years past issues of Wired magazine and found an article by editor Chris Anderson describing one of the fundamental reasons why so many sites geared to personalizing their inventory have become so popular in recent years.

Basically Anderson describes an era in which the so called "hit" is on its way out. Because of features like the Internet, which inevitably opens up the doors to an entire world of alternatives, people are turning more and more to their own individual interests. Why? Simply because they can. Unlike ten or twenty years ago, they have the option to turn off their local radio station and go online and find another station they like even more, or they can download specific songs they want to hear. Because of this new trend, companies are trying to target these new age consumers. We can now sign on to sites like Pandora and the site will try and fit their personal tastes.

"There has never been a better time to be an artist or a fan, and there has never been more music made or listened to. But the traditional model of marketing and selling music no longer works. The big players in the distribution system - major record labels, retail giants - depend on huge, platinum hits. These days, though, there are not nearly enough of those to support the industry in the style to which is has become accustomed. We are witnessing the end of an era."

"The world of shelf space is a zero-sum game: One product displaces another. Forced to choose, each link in the entertainment industry naturally selects the most popular products, giving them privileged placement. By putting our commercial weight behind the big winners, we amplify the gap between them and everything else. Economically, this is the same as saying, 'If there can be only a few rich, let them at least be super-rich.'

But now the audience is turning to a distribution medium that doesn't favor the hits alone. We are abandoning the tyranny of the top and becoming a niche nation again, defined not by our geography but by our interests."

Again, what is most important now is the fact that "traditional styles of marketing and selling music" really do have to adapt to the changes in our culture. You can see them already -- even on Pandora, all their songs have links, so when you click on the name of the song, the site automatically transfers you to another page filled with ways to purchase the material. There are links to amazon.com to purchase the album and to iTunes to purchase the song individually. Not to mention, right beneath the track listing of the selected album, there are also several other "similar albums" to choose from. All of these features prove that Pandora, and sites like it are the wave of the future -- an entire network set up specifically to cater to your own personal needs.