After Cambridge Analytica, music biz gets smart about data

The global music business is being forced to review the way it collects and utilises fan data, amid continued fall-out from the Cambridge Analytica scandal and the approaching 25 May deadline for compliance with Europe’s new General Data Protection Regulation (GDPR).

Unlike Cambridge Analytica (CA) – which mined the personal data of 50m+ Facebook users, the vast majority of whom had not given the company permission to do so – the fan data used by the music industry to book shows, route tours and sell tickets has (or should have) been parted with willingly, through music streaming services, social media, event and venue apps, RFID wristbands, marketing campaigns and more.

However, both GDPR – which requires that customers actively opt in to continue to receive marketing communications – and potential new regulation on the other side of the Atlantic in the wake of the CA scandal could still have major implications for an increasingly data-driven music business.

“The good use of data will always have a strong place in marketing, especially around emotionally driven events [such as concerts],” says leading music industry analyst Chris Carey, the founder of Media Insight Consulting and the FastForward conferences.

Carey draws a distinction between insight-led marketing, as practised by the music industry, and the kind of mass harvesting of data undertaken by CA, which used a third-party app to collect information on both the user and their friends, broadening its reach from the 270,000 people who originally opted in to more than 50m Facebook users.

“When someone comes to your website and puts, say, four Kylie tickets in their basket, then drops out, it’s reasonable to contact them – your response is in line with their intent,” he explains.

“Where it gets complicated – and where I think music has very little intention to go – is in targeting individuals: Not just info they’ve shared, but information other people have shared about them.”

“With streaming, artists’ interests are diverging”

Sammy Andrews, the founder and CEO of Deviate Digital, a 360° digital agency for the music business, says all industries “must now fight extra hard to get data for legitimate uses”, as the general public becomes more aware of how their data is being used. “But that’s not a bad thing in my eyes,” she adds. “We’ve been working with several large companies in the live sector, [as well as] artists and record labels, on re-consenting data over the past six months.”

That re-consenting – or opting into marketing once again – is a key provision of GDPR, and Andrews says the new regulations, combined with the continuing CA fall-out, will lead to more sensitivity around how fan data is handled within the industry.

“There are sadly some absolute rogues out there still,” she explains, “but with the implication of GDPR they will now be held accountable, and in the wake of Cambridge Analytica we must work harder than ever to win over our customers.

“If we take this to totally base level – how many of you have been added to some music industry mailing list you never signed up for? Didn’t consent? That’s now publishable by law under GDPR. Using retargeting pixels on your event page without clear opt-in? Legally punishable under GDPR.”

Ryan Penty, a booking agent at Coda, says all the data used by the agency – “things like Spotify listener data” – is sourced through labels, promoters and managers, with Jake Beaumont-Nesbitt of artist managers’ body IMMF (International Music Managers Forum) making clear that “all the data music managers use is with consumers’ consent”.

“The richest data we see is from YouTube,” explains Beaumont-Nesbitt, “and all the data YouTube shares with us is anonymised. We can tell lots of thing about the crowd – they’re this age, that demographic, that geography – but we don’t know who any of them are. And I don’t think we’re concerned about that.”

“After GDPR, we know 100% that every bit of that data is going to be from people that actually care”

If managers do need to know the identities of their artists’ audiences, Beaumont-Nesbitt continues, they can do so through ticketing and social media, “where we might ask them for information about themselves”.

Andrews adds that the misuse of fan data in the music business is now largely a rarity – although it hasn’t always been that way.

“I’ve been working in digital since before digital was a thing for the music industry – or indeed most industries,” she says. “I placed some of the very first music ads on MySpace – remember that? – and I’ve seen been various misuses of data over the years: labels used to pile mailing lists together from several artists without the artists’ or fans’ knowledge to form a wider pot to market to; everyone, pretty much without exception, asks for ticket-buyer data for mailshots on new albums, often sent in an unsecured CSV file; pixels in place without proper cookie information and T&Cs… but all of that is out of the window now and subject to GDPR compliance.”

That compliance, she emphasises, is a good thing, “but it will make it harder to obtain, and impossible to implement, data for additional uses unless the user has explicitly given consent for that usage.”

This extra spotlight on data issues comes at a time of change for the traditional artist–record label model, adds Beaumont-Nesbitt, and could lead to more attention on what IMMF calls the ‘data gap’ – or the deficit of data shared with artists when compared to other industry stakeholders.

“With streaming, artists’ interests are diverging,” explains Beaumont-Nesbitt, who says the changing business model – from “£10 up front” for a CD to a “deferred income” from Spotify streams – means the artist sees more value in data than ever before. “They can use it sell T-shirts and tickets – and keep it when they move to a new label to promote their new track,” he suggests.

“The good use of data will always have a strong place in marketing”

An amendment to the EU’s draft Copyright in the Digital Single Market directive – sponsored by Polish MEPs Róża Thun and Michał Boni – that seeks to ensure “all authors and performers receive on a regular basis […] contextual and rich consumption and behavioural data”, is currently making its way through the European parliament. Beaumont-Nesbitt describes the proposal as “revolutionary”, “in that it puts as much of a premium on artists having their data as having the money”.

As for Facebook – whose founder, Mark Zuckerberg, recently faced a grilling from US senators over Cambridge Analytica – could the beleaguered social network be facing the prospect of a mass exodus from the newly GDPR-compliant music industry? Not likely, says Carey, who notes the CA scandal was “picked up and fixed by Facebook before it ever hit the public psyche”. As long as consumers don’t abandon the platform, he says, neither will the music business.

A person with knowledge of Facebook’s negotiations with the major labels agrees, telling IQ the record industry is “waiting for them to write large cheques” to license the music videos and other copyrighted content already hosted on its platform.

Andrews says that while the scandal “hasn’t damaged [Facebook’s] music industry relationships at all – indeed, in recorded music, many have just signed licensing deals – it has damaged consumer relationships. And over the coming weeks and months we’ll be finding ways, as marketers, to win back people’s trust for data usage…”

Ahead of (G)D(PR)-Day, Andrews believes the music biz should see 25 May as an opportunity as well as a challenge. “It’s all about the opt-in,” she says, “which will be the industry’s main battle.

“But using legitimate ways to convert people will still allow the music industry to collect and utilise data – and, on the flip side, we know 100% that every bit of that data is going to be from people that actually care.”

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