A Music Industry Primer:

Developing Audiences, Identifying Brand Partnerships, and

Predicting Music’s Next Star

OCTOBER 2016 ISSUE 04

Foreword

Part One: Developing Audiences for Emerging Artists

Part Two: Using Affinity Data to Identify Ideal Music-Brand Partnerships

Part Three: Predicting Music’s Next Big Stars Via Next Gen Audience Affinity Data

Conclusion

About Affinio

TABLE OF CONTENTS

3FOREWORD

“Big data is radically transforming the music industry.”— Dylan Love

The music industry can be complicated, difficult to navigate and therefore hard to explain, but

one thing has always been and will always be true: the single most important thing for any artist and their business team to do is to build a loyal fanbase of advocates that take action.

But today reaching fans and building a meaningful fan base has become harder for the artists, and the business teams representing them. With no shortage of artist preferences and choices, and more music than ever before, both the artist and their marketing teams need to find ways to connect with audiences and elevate their position authentically or risk obsolescence.

The smart music teams accomplish this by relying on affinity data to inform strategic business and marketing decisions. By leveraging affinity data, teams can immediately build high-value audiences for new artists, identify relevant brand partnership opportunities, and identify up-and-coming artists; all in an efficient, repeatable manner, and in a way that significantly raises the probability of success.

This eBook, powered by Affinio, explores how data is radically changing the music industry.

Topics include:Part One: Developing Audiences for Emerging ArtistsPart Two: Using Affinity Data to Identify Ideal Music-Brand Partnerships

Part Three: Predicting Music’s Next Big Stars Via Next Gen Audience Affinity Data

4PART ONE: Developing Audiences for Emerging Artists

The music industry can be complicated and therefore hard to explain, but one thing has

always been and will always be true: the single most important thing for any artist and their business team to do is to build a loyal fanbase of advocates that take action. Fans want more access to artists, and they want to hold a meaningful connection with who they choose to listen to. In today’s ecosystem, there are more ways than ever for artists to reach their core fans and potential fans directly to start that conversation. Be it YouTube, Instagram, streaming services, etc. Ironically, this can make reaching audiences more difficult.

So how do you instigate fans to take notice and form a bond with an emerging artist?

Affinity data.Before diving into this concept, let’s take a step back and understand how the music industry has evolved, and how audiences interact within its competitive ecosystem today.

More music is consumed right now than when we started typing this blog post—it’s true! From the early days of sheet music, vinyl, cassettes, and 8-tracks, to the introduction of digital distribution, the iPod, social media, and the streaming businesses, the way consumers access music has drastically evolved. All of these events have shaped consumer consumption behaviours. For example, album sales are no longer the most important metric. And when digital downloads took off, the industry reverted to a single’s business (like in the 60’s). The latest event that has influenced a consumption change? The debut and acceptance of streaming services. Thanks to the rise of streaming, our access to music is greater than ever before.

Consumers are exposed to a wealth of new songs, artists, and styles at their immediate disposal and discovery. In fact, as shared by The Telegraph: Spotify, Apple Music, and the other on demand services have over 30 million tracks for users to explore. What’s even more interesting is both emerging artists, as well as established musicians, are now fighting in the same distribution space. That’s a lot of music and a lot of noise.

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So many options, so little time.

The teams representing artists want to raise their batting average on signing profitable talent. Therefore, it is critical that business teams curate well, and then utilize their marketing and promotion budget and promote emerging artists to a high-value audience where they will resonate. Because the truth is, unless you find the right audience for your music and build an emotional connection with that audience, new revenue opportunities will not walk through the door, despite how talented the artist is or how much money is spent promoting them.

“The single most important thing for any artist is to create an emotional bond with your fanbase.”

— Jon Vanhala, Managing Partner/Founder of Crossfade Partners

With no shortage of preferences and choices, it becomes essential for emerging artists (and

the teams representing them) to cut through the noise and connect first with high-value audiences to build a fruitful, long-lasting career.

According to IFPI, radio promotion and other marketing costs are the largest upfront investments that business teams bear on emerging artists. Like with any investment, the teams representing artists (whether it be labels, music management companies, or streaming services) want to increase their odds of success, provide value for their roster artists, and make back their money (and more!).

Using audience intelligence and affinity data, artists and their teams can mitigate the risk

born on their investments, collect them back at a faster rate, and identify the high-value audiences already engaged with an emerging artist. The individuals initially attracted to an artist have built an early emotional connection to them. Again, the single most important thing for any artist and their business teams to do is to build a loyal fanbase of advocates that take action.

Through the identification of those initially drawn to an artist, teams can leverage this data to find more individuals like them. By using data to build an army of loyal, high-value listeners, business teams solidify an artist’s stake in the market and open the door for new revenue opportunities, stretching beyond the music.

Does this sound like music to your ears?

Let’s take a look at this use of data and explore how to identify high-value communities that al-ready exist in an artist’s audience.

I was recently introduced to the Toronto-based electronic pop band, Southern Shores, who just released a new album under the independent label Cascine (you can check out their sounds here). The duo has under 1,000 Twitter followers, so for example sake, we will group this band under the emerging artist umbrella. Using Affinio, I ran an interest-based segmentation analysis on anyone following the Toronto-duo on Twitter (@SouthernShrs). The Affinio algorithm then compiled all of the unique people following the duo and began to analyze each of their following patterns. The algorithm then matched people with similar interests and grouped them into interest-based clusters.

Here’s what this looks like:

6PART ONE

On the previous page is an audience visualization of the individuals following Southern Shores.

As you can see, there are two Canadian location-based clusters: the Toronto and Halifax music scene. These two followings are not surprising considering the band members are from Halifax and now live in Toronto. There are also communities of Media/Labels and Electronic Pop Fans within the audience. All of the communities found within the audience were attracted to the band for a reason, and are indicators of the types of communities Southern Shores should be reaching out to as part of their growth strategy.

For this example, we will focus on one community in particular — the healthy following of “Electronic Pop” fans. These are the early adopters (fans) of Southern Shores’ music, and by looking at the audience visualization, we can see that this is a dense, flourishing community. When a cluster is dense like this Electronic Pop community, it means these are a group of highly interconnected people who have a high degree of shared interests (and

likely know each other). Attracting a highly dense community is the perfect foundation for building a high-value audience or fandom.

We can dive deeper and hone in on specific clusters to find out what makes them tick—or—who and what matters most to them and why. By understanding the fans you are trying to connect with on an intimate level, business teams can better position their artists and get them in front of the right eyes, or ears. Let’s take a look at a few of the insights extracted from the Affinio platform.

Looking at the interests (tiled below) of this Electronic Pop community, we can see who else they are interested in (music and otherwise).

Top interests include other elec-tronic pop artists such as Neon Indian, Washed Out, and Teen Daze. Does the artist you are representing align with these sounds? Is there an opportunity to tour with any of these acts and expose your artist to their audiences?

Music publications such as Pitchfork, XLR8R, Rolling Stone, and FACT, as well as streaming platforms, such as Spotify, are also already resonating. Has your artist been covered by or featured on any of these platforms?

7PART ONE

What about the media they share and content they connect to? Music snippets are amongst the most liked and retweeted pieces of content shared by members of the audience. Is your artist producing and sharing content like this?

What about where they are located? The audience is mostly located on both coasts of Canada and the US, as well as the UK. Cities such as San Francisco, Los Angeles, New York, Toronto, and London over-index. Is there an opportunity to play or tour in these areas?

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How can we reach more people like them? Using Affinio’s look-a-like modelling, business teams

can find that more individuals with the closest affinity to the ones in Electronic Pop cluster, and run ads targeted to them. By pulling from the insights shared above, teams can ensure their ads use familiar creative, terminology, and are non-intrusive. By understanding the interests and passions of the high-value Electronic Pop fan (and Southern Shores fan), teams can create content that resonates.

audience and the insights that can be drawn from them — learn from them, get to know them, know where they are, what they care about, and then find more people like them.

Audience insights empower artists and their teams to take a data-driven approach to grow their audience in a strategic way. Again, consumers want to form a bond with the artists they choose to listen to. They want to be understood. By identifying the high-value audience segments that are likely to have high affinity to an artist, business teams can uncover their interests and passions, utilize their marketing budget, and develop meaningful strategies that break an artist through the noise.

I’ll leave you a quote from an article written by Derek Kortepeter, Ethnomusicologist: “There will be fans who are there waiting for you – but it all starts with knowing who they are and where to find them.”

Audience insights empower artists.

With no shortage of preferences and choices, it becomes essential for emerging artists (and the teams representing them) to cut through the noise and connect with high-value audiences that are likely to become loyal fans. In other words, artists and their teams must leverage their initial

Up Next—Part Two: Using Affinity Data to Identify Music-Brand Partnerships

9PART ONE

Today, more and more musicians are linking up with consumer brands: Rihanna and Puma,

Selena Gomez and Pantene, Kendrick Lamar and Reebok. The list goes on. But the trend is this: brand partnerships have become an increasingly important way for music artists and the team’s representing them to generate income. In the current music industry ecosystem, with no shortage of preferences and choices, it becomes essential for music artists to cut through the noise and connect with high-value audiences. Brand partnerships offer a unique proposition for artists to not only reach a much broader potential audience and motivate consumers, but also to generate a new stream of revenue. And for brands, a strategic music-brand partnership can help align their brand with desired lifestyles, and help connect with consumers — like music does — on an emotional level.

According to Billboard, “some $2 billion in revenue reaches the music industry from the branding business.” With the right partnership selection,

both parties can make incredible music together. However, while the teams representing artists (notably record companies) are expanding their personnel responsible for brand partnerships, these teams need a way to ensure selections are contextually relevant to their audience. By leveraging audience intelligence and affinity data, artists and brands can identify relevant musicbrand partnerships, ensuring their decisions are data-backed. We all know what happens when partnerships go off the rails; so music artists, their teams, and the brands themselves need to ensure they maintain and amplify their image — not damage it.

Successful music-brand partnerships occur when artists and brands have an intimate understanding of the audiences they each attract— their interests, passions, and culture. As shared in a Billboard interview with executives from some of the biggest companies at the forefront of the business of marketing with music, “Dealmakers don’t just pair artists with trademarks -- they shape the culture.”

“Brand association can mean financial support for musicians and large and enthusiastic audiences for brands”

— Mark Knight, Group Strategy Content Director at MEC

10PART TWO: Using Affinity Data to Identify Music-Brand Partnerships

11PART TWO

Shaping Culture — Rihanna & Puma

Music icon, Rihanna, and athletic-wear brand, Puma, partnered in 2014, with Rihanna being

announced as Creative Director to the brand. In 2016 as part of her line FENTY X PUMA, she released trainers and creepers (sneakers), which immediately sold out. Puma’s CEO shared in a statement, thanks mostly in part to Rihanna’s contributions, “We continue to see better sell-out of our products in the stores, as we feel consumers are getting more interested in our brand and products again.”

In an Affinio data analysis, we found that in the last 30 days alone, the hashtag #FENTYXPUMA was mentioned by over 56,000 unique users, with individuals sharing pictures donning their Puma gear and proclaiming their love for the product and Rihanna. As shared by MAPP, “In the internet age, music is not purely an audio experience, but also highly visual, social and experiential” and the Rihanna and Puma pairing captures this perfectly. Both brands have benefitted from the partnership, Puma in sales and brand awareness, and Rihanna has solidified her name in the fashion world.

Image Credit: Vibe.com

How can other brands and music artists identify viable partnerships with data?

For a brand looking to engage a musician as part of its marketing strategy, knowing where

your ideal audience is, and what artists they are interested in, and connect to is critical. Perhaps this is an audience you are already attracting, and you’re trying to get more of them. Or maybe you are looking to conquest a new audience and increase your visibility and buzz using the musician’s star power. In contrast, perhaps you are a business team that represents a music artist, and you are looking to identify the right brands to partner with for increased revenue and new audience exposure. Music artists and their teams must understand what brands are already resonating most with their audience and choose a contextually relevant partner to avoid being viewed as a “sell-out.” Whatever the reason for seeking a music-brand partnership, understanding your ideal audience on an intimate level is critical in creating a harmonious, authentic relationship.

Using Affinio we analyzed the audience of the music icon, @Rihanna. While Rihanna is already a partner with PUMA (amongst others), we wanted to understand what other brand partnerships would make sense. Our algorithm segmented her audience into sixteen interest-based clusters based on their shared interests and affinities. These are the interest-based clusters that a brand partner would be exposed to when pairing with Rihanna. It is important that brands understand what audiences they are reaching with the star and whether these segments fit their ideal customer persona.

Take a look at the interest-based clusters in the above audience visualization.

As can be seen, Rihanna is attracting interest-based communities such as Sports Fans, Black Entertainment, Reality TV Fans, and High Fashion Fans (likely gained from her partnerships with fashion brands like PUMA and Dior).

Let’s say as part of Rihanna’s growth strategy her team is interested in growing her fan base in the community of Teenie Boppers. This community is comprised of young females, predominantly located on either coast of the USA, and who self-describe with “Instagram,” “Snapchat” (likely an indicator of their younger age), as well as keywords such as “Girl,” “life,” and “friends.”

(Top Bio Keywords)

12PART TWO

Using Affinio, we immediately have a list of contextually-relevant accounts that resonate

with the “Teenie Bopper” community. Given the array of young stars barely out of high school (e.g. Cameron Dallas, Nash Grier, and 5SOS), we can infer that this cluster is comprised primarily of teenagers.

Brands such as Victoria’s Secret, Forever 21, MAC Cosmetics, Calvin Klein, Tarte Cosmetics, Urban Decay, and Benefit Cosmetics are top picks for the community. Interestingly, Rihanna has partnered with Victoria’s Secret in the past (she headlined the show in 2014) as well as MAC Cosmetics in 2013.

Let’s say Rihanna’s team is leaning towards the makeup brand, Urban Decay, as a potential brand partnership. We analyzed @UrbanDecay to see what interest-based clusters she would be reaching.

Communities such as Teen Girl Humour and Directioners emerge which share a lot of the same interests as the Teenie Bopper community we initially looked to grow.

If these are communities of benefit for Rihanna and Urban Decay finds value in Rihanna’s audience, then this could be a viable match.

13PART TWO

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By leveraging affinity data, artists and their business teams, as well as brands, are armed

with actionable insights to use in structuring brand partnership deals. As shared in an article by Lukas Nieuwenhuijsen, “The best partnerships are informed by a deep understanding of the music, the artist, and the culture of that artist or genre.”

Brand-music partnerships aren’t going away, and with more and more competition for consumer attention, ensuring the right partner selection is vital. When done right, brands and music artists can work together in perfect harmony — brands can grow their awareness, and artists can further enhance their careers. That’s music to our ears.

PART TWO 14

Up Next—Part Three: Predicting Music’s Next Big Stars Via Next Gen Audience Affinity Data

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Discovering and fostering new talent keeps the music industry alive, and everyone from

A&R teams, management companies, live event promoters, streaming services, to brands and activation agencies are constantly looking for the next big thing. I mean, who doesn’t want to sign the next Carrie Underwood or discover the next Beyonce? That said, the goal for talent-seekers and those who risk their money on new talent is, of course, to find the next big thing before anyone else and ensure that the next big thing makes money and lots of it.

Fans access to music has drastically evolved in the digital age and so have the roles of the individuals

responsible for finding and investing in new talent. By now we’re sure these teams are listening to social metrics, fan counts, and demographics and other sources to identify new, emerging talent. But today new technologies, big data, and audience insights are changing the game, and the teams with the best tools, curation, and expertise, win.

Without the right tools in your arsenal, music teams run the risk of partnering with artists that are either not profitable or resonating with the intended audience or even miss the chance to partner with an artist because they have already been scooped up.

15PART THREE: Predicting Music’s Next Big Stars Via Next Gen Audience Affinity Data

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The truth is, today you may not need to leave the comfort of your home to find the next big star.

Unlike years past, it is not necessarily the live shows or underground buzz that get artists discovered, but instead their online presence. As shared by Kernel, “Our online interactions with music are interesting to the music industry because each interaction yields valuable data about who we are and what we like.” While there have been success stories of teams scouring the internet looking for the next golden nugget or Justin Bieber, this process is time consuming, incomplete, and rarely repeatable without the right tools in hand.

The tools? Affinity data.

The smart music teams leverage af-finity data, and immediately identify up-and-coming artists in an efficient, repeatable manner, and in a way that significantly raises the probability of success.

Affinity data provides an in-depth look at audiences including who they are and what they like. (Learn about affinity data and how Affinio identifies advanced audience insights, here.) Using audience intelligence and affinity data, music teams can identify a list of early stage developing artists that are already resonating with a set audience. These are the artists that are building a passionate following but have yet to break through as a “mainstream” act — these are the individuals that need to be on a talent seeker’s radar.

In essence, by leveraging affinity data, your ideal audience — fans — finds talent for you.

17PART THREE

Let’s take a look at this use of affinity data.

Let’s say we are a music team looking to find new talent in the Country and Americana genre.

To begin, I decided to analyze the audience of the Bluebird Cafe — a famous club in Nashville, Tennessee where many singer-songwriters have been discovered over the years (including Taylor Swift!). The Bluebird is a go-to spot in Nashville for singer-songwriters of this genre to perform. Using

Affinio, I ran an interest-based segmentation analysis on anyone following the BlueBird on Twitter (@bluebirdcafeTN). The Affinio algorithm then compiled all of the unique people following the Cafe and began to analyze each of their following patterns. The algorithm then matched people with similar interests and grouped them into interest-based clusters.

Here’s what this looks like:

Above is an audience visualization of the individuals following the Bluebird Cafe. As you can see, interest-based groups such as Nashville Locals, UK Country Music Fans, and TV Show “Nashville Fans.” (FYI — The Bluebird Cafe has been featured numerous times on the CMT show, Nashville.)

Within this audience, there are also strong interest-based clusters of Country Music Fans and Americana/Country Singers-Songwriters. Let’s explore the Americana/Country Singers-Songwriters.

As an A&R team, or any team looking for talent, we can validate that these individuals are singer-songwriters by their shared interests and how they self-describe.

These individuals are our ideal audience. We can dive deeper and hone in on this particular community to find out who and what matters most to them and why. By understanding the culture of a community, music teams can quickly identify emerging artists already resonating with the audience who have built a small, but passionate following.

How the Audience Self-Describes

Interests of the Audience

18PART THREE

With Affinio you can sort audience interests by relevance or affinity. The Affinity Score is a calculation for how many times more likely this audience is to follow a given account as compared

to the rest of the network; this helps music teams identify the strongest, niche influencers amongst an audience — or — the emerging artists.

Take a look at the influencers (sorted by affinity) that are resonating with this audience.

The individuals featured in this list are contextually relevant to this Singer-Songwriter community. For the purpose of this example, I am focusing on small-scale singer-songwriters who have built a following of between 5k–20k followers. While

5k–20k followers may sound like a lot, compared to big-name Americana/Country artists such as Kacey Musgraves and Elle King, these artists are still little fish.

Some of the music artists sourced with high Affinity Scores included:

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For music teams, leveraging tech-nologies like Affinio is an easy, da-ta-backed way to detect who is al-ready resonating with an audience.

20PART THREE

As shared in Part One, “Developing Audiences for Emerging Artists,” the teams representing artists want to raise their batting average on signing profitable talent. Affinity scores help detect who is already making an impact with a particular audience.

What smaller audiences also tell us is that their followers aren’t necessarily following them because the rest of the industry is, but because they are creating content (in this case music) that is valuable to them but has not yet reached the masses. These followings are highly engaged and have built an early emotional connection to that artist. Like our friend Jon Vanhala, Managing Partner/Founder of Crossfade Partners said:

“The single most important thing for any artist is to create an emotional bond with your fanbase.”And these artists have built this foundational fanbase.

Moneyball for talent — affinity data gives teams a competitive edge.By leveraging affinity data, pulling insights and interest indicators from their ideal audience, and with a little bit of creative judgment, music teams are taking an audience-first approach that may just find them their next big star faster than ever before.

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The music industry is fast-paced. Every day there are new songs, artists, and ways to access

music. It’s nearly possible to keep up. But data is changing how music teams operate. It’s increasing the likelihood of breaking artists through the noise, amplifying their image, and finding new stars to add to the roster.

By leveraging affinity data, business teams within the music industry are empowered with audience insights that can be used to fuel strategy — whether it be growing their audience or finding a suitable brand partner — or to discover their next big star in an efficient, repeatable manner! Big data is radically transforming the music industry, and if you don’t buy in, you’ll get left behind.

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ABOUT AFFINIOToday consumers are more empowered, complex, and wiser than ever before. Understanding your target audience has become increasingly challenging due to a fragmented media environment and the amount of information consumers are exposed to every day. Consumers now disregard the majority of the messages and media they are exposed to, but they don’t ignore it all. They focus on the timely communications that align with their interests, passions, and beliefs.

We have more public data about people than we’ve ever had before, and yet marketers still rely on demographics, transactional data, and conversation-based listening to form strategies. But that approach doesn’t tell the full story of who we are as consumers, as humans.

Organizations are ignoring the key connections that exist within their audiences. The one-size fits all approach and relying heavily on demographics to reach your ideal audience is outdated. Instead, organizations must take an audience-first approach to relate to and connect with today’s modern consumer.

Affinio is transforming the way marketers understand and relate to the people they are trying to reach. We believe that if we can understand an audience at a deeper and richer level than before, we can fundamentally change the way people relate to each other.

The key to understanding a potentially large and diverse audience is segmentation and insight extraction. Affinio is able to extract insights from the connections that exist within a social audience to identify the cultural fingerprint of each user. Understand an audience based on their interests, the topics, and content they care about most. Leverage these insights to drive business decisions and strategies that will resonate with your audience and maximize the impact of your content.

We believe that when you align your message with what people are already passionate about, you are able to make an emotional connection. In that moment, magic happens. That moment is about people serving people.