The Echo Nest

The frontier of targeted ads in streaming music

Friday, December 6, 2013 - 12:35pm

Streaming music is gaining popularity fast, but lags behind the web in understanding its users.

Internet content sites can tag, track, and categorize people as they move about the web, creating deep and accurate user profiles that follow most of us as we move among digital properties. Combined with programmatic ad buying, it means that when a user visits a certain website for the first time, that site can display an ad that is more-or-less precisely relevant to that user. Advertisers pay more for effective targeting.

Dedicated music apps like Pandora or Spotify exist as islands, separated from broader engagement with the oceanic Internet. They are years behind the web in understanding their users. Two advances have sparked what promises to be an intensely developed intelligence layer that can understand, profile, and target the users of streaming music services.

First, Pandora announced audience segmentation based on user-registration information. (RAIN coverage here.) The first segments released by Pandora to advertisers are Hispanic users and Spanish-speaking users. More segments are doubtless forthcoming as Pandora develops and refines its testing and predicting methods.

Second, and more recent, The Echo Nest released its Music Audience Understanding platform, which leverages that company’s immense data intelligence about music choices to better profile online music users. (TargetSpot, a leading digital audio advertising network, was the launch partner and first client.) The premise of The Echo Nest’s development is that a proper analysis of music preferences can predict non-music attributes of a person and cohorts of people.

Does it work?

“The Echo Nest’s technology delivers predictions that are at least as accurate as registration data, or more so,” said Mitch Kline, CEO of TargetSpot. “Some advertisers think registration data is gospel, but we believe The Echo Nest’s technology is more accurate.”

It is certainly more ambitious than Pandora’s first venture into segmenting. The Echo Nest has released 20 audience segments that cover demographic categories (age, gender) and lifestyle inclinations (automotive, parenting, etc.). That starts to get very interesting to advertisers.

“It is increasingly important,” Kline affirmed. “Our clients are trying to get more and more targeted. Dumb inventory doesn’t do anything for them anymore. People are now looking for advanced targeting. Automobile manufacturers want to target auto intenders. Or, an insurance company wants to target people who are in the car market because they will need auto insurance. In digital audio, this is fairly new." 

Can music taste really predict whether someone likes cars, or is a parent? We put that question to Jim Lucchese, CEO of The Echo Nest, and he described elaborate methods of testing against the “ground truth” of music-service users, gleaned from multiple sources. Correlating music choices against populations that live in a certain “ground truth” segment (like auto enthusiasts or parents), results in a prediction reliability score.

“That’s part of what took us so long getting to this point. The segments that we’ve released are ones where we’re confident that the results are predictable enough, and reliable enough, to take to market. There were a number of things that weren’t successful. Music can’t predict everything about a person.” 

Big Data and privacy

Though it might seem that the inference level is high when connecting music choices to lifestyle interests, that’s what “Moneyball” and Big Data are all about, and why there is such promise that analytics can illuminate previously unknown connections between all sorts of things.

Lucchese told us that the Music Audience Understanding platform was in pre-release development for two years, and that the launch timing, close on the heels of Pandora’s audience-targeting system, was coincidental, and probably favorable to both companies.

“[The timing] was awesome! The internal conversation we had was, ‘OK, cool, there’s going to be market discussion about this.’ Prior to that, you didn’t read much about it. [Our] timing was set well in advance -- we needed to have an initial customer lined up; we needed to have a product ready. We saw the Pandora announcement as we were preparing our own announcement. I saw that as a huge plus, educating the market around music as a powerful predictor of people and applying a level of data vocabulary around streaming music.”

Interestingly, Lucchese also noted, “I don’t view Pandora as a competitor; I view it as a prospective customer. Pandora is one of the most forward-thinking companies in the space.” (Pandora does not use The Echo Nest’s music intelligence platform, which is utilized by over 400 other music services.)

All of this makes privacy advocates uncomfortable. Lucchese hit that issue head-on: “We really wanted to make sure anything we were doing was not only compliant from a privacy standpoint, but better the current state of the market. [Our system] is not only non-personally identifiable, we’re not even tracking users. Because we can look at anonymous clusters of listeners, and make predictions based on those clusters, we’re not tracking people around the Internet or dropping cookies.”

Mitch Kline expresses the natural enthusiasm of a launch partner, while looking beyond the first-mover advantage: “We believe in The Echo Nest and this technology. We’re the first ones to dive into this space, and we think others will dive into it also. Then we’ll have to think of other ways of targeting!”

The Echo Nest launches new ad-targeting product

Friday, November 22, 2013 - 8:25am

In a dramatic extension of its core data intelligence business, The Echo Nest has announced a music advertising product that gives ad networks, and music services, audience segmenting possibilities. The solution is called Music Audience Understanding. Keying off The Echo Nest's music context technology, the new platform uses sophisticated music preference knowledge to predict "high-value demographic and psychographic advertising segments," according to the press release.

The product launch is paired with a partnership announcement: TargetSpot, the largest digital audio ad network, will use the technology to more precisely match ads to user type, and gain insights about how an advertiser's target audience consumes music.

This interesting technology angle counters Pandora's recently-deployed audience segmentation, which is based on user registration details refined by music choices. The Echo Nest is a data-crunching enterprise at heart, providing a multi-faceted music recommendation brain to hundreds of listening platforms, with an API (Application Programming Interface) that enables unique product development.

The company's leadership in the field has given it outsize influence on how music services sound to millions of users. The new Music Audience Understanding product seeks to influence how advertisers address those users, and the user experience of hearing ads that potentially are more relevant and interesting to them.

From a high-altitude view of the listening landscape that includes AM/FM, these emerging audience segmentation and targeting solutions, paired with reporting of actionable results, seek to give Internet radio ventures a key competitive advantage over broadcast.

RAIN Weekend Perspective: Week of Oct. 28 - Nov. 1

Friday, November 1, 2013 - 4:30pm

RAIN’s Weekend Perspective summarizes the week’s important events for a weekend catch-up, and revives your blasted synapses for coming week.

PARTNERSHIPS 

The Echo Nest partners with Getty Images: Music services that use The Echo Nest’s intelligence technology will be able to enhance their album art with artist and band photos. [READ]

Spotify partners with Tango Messenger: The alliance lets Tango instant message users to include 30-second Spotify music clips. You might not be familiar with Tango, but it’s a bigger service than Spotify. [READ

MUSIC SERVICES & APPS 

TuneIn reaches 100,000 radio stations: The TuneIn aggregation platform has aggregated up a storm: “The most radio stations ever in one place,” according to the press release. [READ]

Rhapsody introduces new features: RAIN reviews important additions to the Rhapsody music experience. [READ

SoundCloud reaches 250-million listeners: Take that, Pandora, as SoundCloud’s new emphasis on uninterrupted listening is bringing in new users. SoundCloud is now chasing YouTube’s 1-billion users. [READ

Pandora releases Android tablet app: RAIN reviews the essential features that exist in the new version across all devices. [READ

iHeartRadio updates features: The Clear Channel-owned platform gets into concierge-style programming, similar to Songza and Slacker, but with tongue in cheek. [READ

ILLUMINATION 

Edison Research videos show a “barrage of new” in connected cars: Seeking insight to how new-car owners are coping with modern infotainment systems built into digital dashboards, Edison Research produced video interviews with recent car buyers. RAIN interviewed president Larry Rosin. [READ]

Survey/Interview - iTunes Radio little threat to Pandora: Investment firm Canaccord Genuity surveyed Pandora users who have tried iTunes Radio, to get a picture of its existential threat to Pandora. RAIN interviewed the study’s author. [READ]

BIZ / LEGAL 

Swedish musicians threaten to sue labels over Spotify distribution: The musicians' argument is less with Spotify than with labels, and how Spotify revenue is shared with artists by those labels. RAIN untangles it. [READ]

The Echo Nest partners with Getty Images

Wednesday, October 30, 2013 - 12:10pm

We can hope to see more pictures of artists and bands in music services that use music intelligence data from The Echo Nest. (See part 1 and part 2 of RAIN’s interview with CEO Jim Lucchese.) The music data company has partnered with Getty Images to make it easy for music platforms to enrich their listening experiences with pictures.

Today, for the most part, track playback is accompanied by a single image, usually album art. The Echo Nest, which powers the radio-style playlists across hundreds of music services, is bundling Getty Images photos into its intelligence layer. Using The Echo Nest’s API (application programming interface -- the on-ramp to The Echo Nest’s music intelligence database), clients can build new features that automatically bring appropriate photos into the listener’s view. 

The partnership is an interesting extension of The Echo Nest’s core product, which is music analysis and contextual understanding. It fits into the company’s Dynamic Music Data program, which supplements the musical brain with artist information and social tools.

Weekend Perspective: Week Oct. 21-25

Friday, October 25, 2013 - 5:10pm

RAIN’s Weekend Perspective summarizes the week’s important events for a weekend catch-up, and revives your blasted synapses for coming week.

 

PARTNERSHIPS

Clear Channel and Black River: The radio group added to its growing portfolio of partnerships with record labels. Details not disclosed, but this one likely follows the template of Clear Channels agreement with Warner Music Group: higher broadcast royalties, lower streaming royalties, artist promotions on radio. [READ]

MUSIC SERVICES & APPS 

iTunes Radio reaches 20M listeners: And media outlets indulge in fuzzy math by comparing iTunes Radio and Pandora audience metrics, which use different standards. [READ

YouTube music service: YouTube is the gorilla in the room when it comes to music services. Not formally set up for music, the platform is nonetheless rampantly used for music search and playback, especially by young listeners. RAIN analyzes whether YouTube would compete with itself by formalizing a music service. [READ]

Sirius XM disappoints subscribers: Unexpectedly and without explanation, Sirius XM dropped several popular Clear Channel stations. The satellite company’s Facebook page swarmed with malcontent. [READ]

...and raises their rates: In its quarterly call to Wall Street investors, Sirius XM (SIRI) showed off steep gains in revenue and subscriptions from a year ago, but also lowered guidance for 2014 and raised rates on subscribers. [READ]

Twitter #Music nearing the end: Not official, but reports have us believe that Twitter’s music no-quite-service, underdeveloped but sometimes fun, and only six months old, will be shelved. [READ]

Microsoft plays the Web: Xbox Music was updated, and one new feature struck us as unique and potentially disruptive: a way of building a playlist from any web site that mentions artists and bands. [READ]

Rhapsody courts CD buyers: The music service gives one-month free subs to CD buyers at Best Buy. It’s an interesting play for consumers who might not be converted from ownership to access. [READ]

Songza updates: The Songza app is prettified for iOS 7. [READ]

“This American Life” goes endless: The public radio program, hosted by Ira Glass, has an 18-year archive of shows. A new TuneIn stream plays them continuously, with zero interactivity, for total saturation. [READ]

British music service sailing for U.S.: That would be Pure Connect, which works seamlessly with Pure WiFi devices. [READ]

ILLUMINATION 

Jim Lucchese: The CEO of The Echo Nest, a music intelligence company, describes how it powers many of the features used by millions of people across hundreds of music services. [READ Part 1] [READ Part 2]

DASH conference: A two-day conference in Detroit scrutinized every aspect of the connected-car movement, from the viewpoint of radio, solution providers, automakers, aftermarket companies, car dealers, and disc jockeys. RAIN was there. [DASH Day 1] [DASH Day 2]

OUTBURSTS 

Dave Allen vs. David Byrne: It’s a blog-debate. Settle in -- each of these gentlemen is voluble on the subject of Spotify. [READ]

 

RAIN Hotspots: Week of Oct. 21-25

Friday, October 25, 2013 - 11:45am

Here are the top five, most-read articles this week, published at any time. 

Sirius XM apparently drops stations, infuriates users: RAIN noticed that Sirius XM’s Facebook page was exploding with comments from outrages users, over missing stations in the satellite broadcaster’s channel lineup. We never got a response to several requests for comment from Sirius XM. [READ]

Sirius XM will reportedly drop Clear Channel stations soon: Related to the above, from which many readers clicked over for background information. Sirius XM remains in the news, having announced slightly higher subscription prices for 2014. [READ]

Apple announces 20-million iTunes Radio users; fuzzy math abounds: The Apple-vs.-Pandora media tornado got moving when Cupertino announced latest audience metrics for iTunes Radio. Problems arise when you compare apples to oranges. (See what we did there?) [READ]

INTERVIEW: Jim Lucchese, CEO, The Echo Nest: Readers settled into Part 1 of our conversation with the head of a powerful unseen force in music services. [READ] (Part 2 is here.) 

Microsoft’s new Web Playlist dismantles traditional “station” listening: Readers are interested in a unique new feature in Xbox Music that unleashes the hidden musical quality of web pages. [READ]

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